TLT Watch

The exchange-traded fund that tracks long-term bonds issued by the U.S. Treasury, iShares Trust Barclay's 20-plus Year Treasuries (TLT), is showing bull phase on the Person's Proprietary Signal with a volume spike that is so far running about 10% above Wednesday's.

Even so, there are better places to park money.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
TLT $98.11

The stock is trading above the Person's Pivots midline, and the rise today amounts to a bounce of off the pps moving averages -- a confirmation.

Person's Pivots Lines

• $104.65, +6.7% (upper)
• $98.11 <== You are here.
• $95.93, -2.2% (mid)
• $91.85, -6.4% (lower)

TLT tends to whipsaws, as is to be expected with a fund whose aim is dividend income rather than capital gains. The preceding bear phase lasted five days, produced a 1.2% gain at the low, and at today's open was almost dead even with the bear-phase open.

That's not to say that TLT is always a sidewinder. The pps bull phase that began in mid April saw the price rise from $88.61 to a high of 100 and a phase end of $93.16.

Since the fund started trading in 2002, the price has swung from a low of $80.51 in 2004 to a high of $123.15 in 2008. Clearly, the 2008 high, in the midst of the collapse of capitalist finance, was not an entirely normal period for rates of yield.


Price Reversal Levels

• $100.00, +1.9%
• $98.59, +0.5%
• $98.11 <== You are here.
• $96.05, -2.1%

Even so, the main reason to own TLT is to capture the 3.98% dividend yield paid monthly, with the ex-dividend dates coming at the start of each month.

It has the safety imprimatur of the U.S. government (that makes it safe, yes?) and a low yield to prove it. It's sort of the ultimate buy-and-hold parking place for money.

Personally, if I'm going to park money, I prefer something like JNK (dividend 10.01%) or AOD (19.38%), which provide more bang per month, or a dividend paying utility stock, like D (4.39%), or even a low-dividend tech play like MSFT (1.99%).

The risk is greater, but knowing that risk, I'm far less likely to be seduced by a buy-hold-and-weep strategy.

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The Great Reflation: How Investors Can Profit From the New World of Money
OK. The credit bubble burst. Housing, burst. Shockwaves reverberated. Markets collapsed. What lies ahead as we remerge from the wreckage.

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Disclaimer

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

Abbreviations:

• psar - Parabolic Stop and Reverse
• adx - Average Directional Index
• pps - Person's Proprietary Signal
• ma20 - 20-day moving average
• macd - Moving Average Convergence-Divergence
• sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.