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Bond Analysis Report 3/22/19 – Buy, Buy, Buy

Fed Powell spoke on Weds as part of the two day Federal Open Market Committee meeting ended and downgraded the economic growth forecasts from a GDP of 2.3% to 2.1%.  The committee reiterated a patient stance, while keeping interest rates unchanged.  The Fed now sees no rate hikes in 2019, while leaving one rate hike in 2020. This is a stark difference just from six months ago.

Source

The Markets digested the tone as unexpectedly dovish.  While bonds rallied, the 10-year Treasury note yield fell 7.7 basis points to 2.537%, its lowest since Jan. 2018 and the 30-year bond yield fell 5.2 basis points to 2.975%, a two-month low.

NOTE:  A basis point is the smallest measure used in quoting yields on fixed income products. One basis point is equal to one one-hundredth of one percentage point (0.01%) and 100 basis points is equal to 1%.

So what can we expect from bond prices moving forward, let analyze the ETF, TLT, iShares 20+ Year Treasury Bond for some clues?

Monthly Chart (Curve Timeframe) – monthly demand is at $107 and monthly supply is at $139.

Weekly Chart (Trend Timeframe) – the trend is sideways, but the momentum is to the upside.

Daily Chart (Trend Timeframe) – the chart suggests to buy on a pull back to the daily demand at $122.50 with a 1st target at $130.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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