Long Bonds Indicate Risk Off, But With a Twist

From Investing.com: 2025-02-26 00:11:00

Key indexes saw sharp declines last week, with the S&P now down for the year. Sectors like retail and transports were hit hardest, pointing to a potential economic slowdown. The modern family of stocks showed risk-off signals, with semiconductors holding up while others weakened. Value outperformed growth. Rates eased across the yield curve.

Long bonds like TLT outperformed, signaling a flight to safety amid market volatility. TLT faces resistance at the 200 Daily moving average. The support level to watch is $90. The ratio between long bonds and junk bonds suggests risk-off sentiment, despite junk bonds showing a gap higher today. The correction may offer trading opportunities for experienced investors.

ETFs like SPY, IWM, DIA, QQQ, KRE, SMH, IYT, IBB, XRT, and TLT all have key support and resistance levels to watch. The landscape favors seasoned traders who can navigate the market with caution and select low-risk instruments.



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