Bonds Turning Lower

Starting from the long end of the yield curve and working backwards, bonds have started moving lower.  The first chart shows TLT, an ETF that tracks long term government bonds.  The price of TLT has moved below the 30-week moving average once again.  Another thing to note is the big increase in volume without a significant move in price.  Often times when a market churns on heavy volume and doesn’t continue advancing, especially at the end of a long rally, it can signal a top forming.

The next chart shows IEF, an ETF that tracks 7-10 year treasury bonds.  IEF made another new high recently unlike TLT, but it is also showing the same churning volume pattern at the recent high.  IEF has also broken below the 30-week moving average.

Finally we have IEI, an ETF that tracks 3-7 year government bonds.  Like IEF, IEI has started to break below its 30-week moving average this week.  IEI has done very little trading below the 30-week moving average so a break below it that holds would be a technically significant event.

Reversal in the Greek Stock Market?

The Greek stock index broke down at support at the end of November and made a new low for the year.  Since the beginning of this month, however, Greek stocks have rallied strongly and now the index is bumping up against downtrend resistance.  A break out above the resistance line would help assuage the fears over the Eurozone financial problems.

The Irish stock index has also bounced during December and needs to get above 185 to break out of the trading range.

Coal Stocks Breaking Out to New Highs

The Dow Jones U.S. Coal Index broke out to new highs for 2010 last week after being in a trading range for most of the year. This is the highest level this index has hit since 2008.

The next two ratio charts show coal stocks compared against the S&P 500 and against oil and gas stocks. Coal stocks are currently at the top of the trading range against both of them. A breakout would signal continued outperformance of coal stocks versus the rest of the market and against oil and gas stocks.