Today AGG fell early but caught the 20-day EMA as it low. I can't help point out how similar the action so far in July resembles the trading action around the 20-day EMA in mid-April to early May. In both cases the price jumped between the moving average for a few days then the price perked up for a few days before falling to test the 20-day EMA again. That's where we are today.
In May bonds rallied for the next two months following. Nothing tells us that the future will resemble the past so I'm not seeing a certainty but an interesting pattern. But what is the advantage of buying bonds with interest rates already so low? Lower volatility in bonds means less risk and a potentially less damaging exit if things go south compared to stocks. So it uncertainty in stocks that moves investors to bonds. The Fed has added a lot of uncertainty lately with their shift in sentiment and mixed messages on rate hikes. Ironically one reason to raise rates is an attempted to 'correct' the bond market.
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