US Treasuries are off to their worst start in more than a decade as rates rise across the curve. 

The US Aggregate Bond ETF $AGG is down more than 4% year to date. Treasuries can’t manage to catch a bid. And High-Yield Bonds $HYG have fallen off a cliff.

But this could all change quickly. Especially if stocks continue to sell off. 

Money has to go somewhere as it flows out of equities. And with many bonds testing critical levels, it would make sense to see prices mean revert, at least in the near term.

Let’s take a trip around the bond market and discuss some of the key levels on our radar.

First up is the long duration Treasury Bond ETF $TLT:

After dropping 5.4% in the last three months, TLT has paused at a logical area of former support around 135. This the same level price rebounded from late 2019 and early 2021.

The last time TLT bounced off these levels was when many risk assets peaked back in May of last year. We’re watching to see if we get a similar reaction from markets this time around.

...

On today's episode I sit down with Financial Advisor Stephen Weitzel. Stephen and I have known each other for many years. We're both big fans of Technical Analysis, good food and college football. So this was a lot of fun!

Stephen walks us through his journey of first becoming a Financial Advisor, how helpful Technical Analysis has been for his practice and the journey towards $1 Billion in assets.

I've had a front row seat to Stephen's growth, both as a business owner and as a Technician. It's been really cool to see and I'm going to keep rooting for him and his team.

I always like to get different perspectives on the podcast, and I think this conversation is a great compliment to a lot of the other episodes we've done over the years.

Make sure to follow Stephen Weitzel on Twitter @stephenweitzel and check out Stephen's firm Reveille Wealth Management.

Enjoy!

From the desk of Steve Strazza @Sstrazza

How about that volatility!?

I don't know about the rest of you, but days like these make me grateful that I get to do this for a living.

The Nasdaq 100 $QQQ opened the day down over 3% and closed up over 3%. The last time that happened was November of 2008.

How's that for excitement?

Intraday reversals and wide ranges are normal during periods when volatility grips the market the way it has so far this year.

But today was different than the other tumultuous sessions we've encountered in recent months. We're finally seeing some strong evidence of a bottom.

Let's talk about it.

From the desk of Steve Strazza @Sstrazza

When investing in the stock market, we always want to approach it as a market of stocks.

Regardless of the environment, there are always stocks showing leadership and trending higher.

We may have to look harder to identify them depending on current market conditions… but there are always stocks that are going up.

The same can be said for weak stocks. Regardless of the environment, there are always stocks that are going down, too. 

We already have multiple scans focusing on stocks making all-time highs, such as Hall of Famers, Minor Leaguers, and the 2 to 100 Club.

We filter these universes for stocks that are exhibiting the best momentum and relative strength characteristics. 

Clearly, we spend a lot of time identifying and writing about leading stocks every week, via multiple reports.

Now, we're also highlighting lagging stocks on a recurring basis.

Welcome to the Short Report.

...

This month marks the one year anniversary of the top in stocks.

And more specifically, I mean the top in the internals of the U.S. Stock Market. Remember, that's the best things were, and it's been a painful deterioration ever since, particularly for most U.S. Index Fund investors, growth investors and most individual U.S. stock pickers.

The new highs list these days is loaded up with ADRs, Metals stocks, Staples and Energy. Most of the other stocks have been struggling. Not all of them are down, but many are sideways at best.

This chart really tells the story of what's been going on. We discussed it on Tuesday night's call:

From the desk of Steve Strazza @Sstrazza

We held our February Mid-Month Conference Call on Tuesday. ASC Premium Members can click here to review the recording and the slide deck.

In this post, we’ll summarize the call by highlighting five of the most important charts and/or themes we covered, along with commentary on each.

Let’s get right into it!

Markets continue to be "messy" and it's tricky looking for positions to take aggressive stances in. And with VIX hovering at or near the 30 level for the better part of the past week and a half, the option trader in me continues to look for opportunities to sell premium.

A smarter man than me once told me: "If something is working, find ways to do MORE of it!"

Well, selling premium on balance has been working pretty well since January, so...

Chatting with the team this morning, one pocket of strength we identified that has been holding up relatively well in this slop is the banking sector. And while there weren't any individual names we were willing to bet the farm on, the financials sector ETF $XLF caught our attention as a good possible candidate for a delta neutral credit spread.

This is the video recording of the February 2022 Mid-month Conference Call.

From the desk of Steven Strazza @Sstrazza and Ian Culley @IanCulley

Despite the trendless nature of the major forex pairs, there’s still plenty of information coming from the exotics right now – particularly emerging market currencies.

The Chilean peso – and its relationship to copper – now has our attention.

Let’s take a look.

Here’s a chart of the USD/CLP cross overlaid with Copper Futures $HG_F with a correlation study in the lower pane: 

Chile is the world’s largest copper producer, which explains the strong negative correlation between the USD/CLP pair and the price of copper.

You can see this relationship in the chart, as USD/CLP tends to peak and roll over at the same time copper bottoms out, and vice versa. 

The USD/CLP now appears to be topping and turning lower after finding resistance at its 2020 highs. USD/CLP also peaked at these levels after the COVID crash, which coincided with the start of copper’s rally to new all-time highs. ...

No, it’s not April 15th just yet. But I’m getting into that zone where I need to start sending relevant info to my accountant to get the ball rolling for my 2021 tax return.

I hate that I have to farm out my tax return preparation to a professional in order to get them done. I wish the US tax code wasn’t the way it was – who doesn’t?

But let me relate a little story to you that might get your mind right about whether or not to go it alone when doing your taxes…

I don’t remember the year, but it was somewhere around 2003-2004 when I first moved to Chicago. I had been using an accounting firm to prepare my tax returns since I began trading in 1998. But this year, I thought to myself:

“Sean, you’re smart. You’re college-educated. You almost minored in accounting, and you had straight A’s in all your accounting classes. You should be able to handle the filing of your own taxes!”

So I don’t remember if it was out of an act of curiosity, boredom, or just trying to pinch a penny, but I decided that year I’d prepare my own taxes.

I read all the official instruction manuals provided by the IRS. I gathered all my necessary trading documents...

Are you betting this trend continues?

Do you think Technology stocks can keep dominating like this, particularly vs Energy?

Most Americans are making that bet.

Look at your typical American portfolios. They own a bunch of Tech and almost no Energy.

I was in a meeting a couple of weeks ago where I was going over the geographic locations of all the members of our team. These places include California, Florida, Colorado, Venezuela, Canada, Australia, New Zealand, Mumbai, Delhi, South Africa and the list goes on....

The gentleman asked me how I was able to find all these people.

When I told him I just sent out a tweet whenever I needed to add someone, he almost fell out of his chair.

For me this is just common sense. Others are still coming around to the power of social.

We are a team of almost 30 people now.

And we're looking to add another one, if you or someone you know is interested.