Avoid U.S. Treasury Bonds!
Thursday, March 1, 9:25 a.m. We have not been liking U.S. treasury bonds for several months. While they haven’t declined to any degree neither have they gone anywhere, essentially moving sideways since November. That shows up better in the short-term charts, with the pattern being one of lower highs and a usually negative declining wedge [...]

Thursday, March 1, 9:25 a.m.

We have not been liking U.S. treasury bonds for several months. While they haven’t declined to any degree neither have they gone anywhere, essentially moving sideways since November.

30112c

That shows up better in the short-term charts, with the pattern being one of lower highs and a usually negative declining wedge formation.

30112d

And now we’re getting some company in our negative outlook for treasury bonds.

In his recent letter to stock-holders, and interviews on TV, Warren Buffett pretty much said dump bonds.

A few days ago Leon Cooperman, famed manager of Omega Advisors said, “The most widely traded instrument in the world is now U.S. government bonds. I don’t think people understand how risky a US government bond now is with a 2% yield.”

As the intermediate-term chart shows, just another decline back to its long-term trendline would be a 16% plunge in the value if bonds.

At this point a 2% yield is not paying for that kind of risk.

To read my weekend newspaper column ‘Can The U.S. Economy Sidestep Europe’s Recession?’ Click here.

Yesterday in the U.S. Market.

A fractionally down day in spite of the positive economic reports. And volume was significantly higher on the down day, with 1.1 billion shares traded on the NYSE.

The Dow closed down 53 points, or 0.4%. The S&P 500 closed down 0.5%. The NYSE Composite closed down 0.7%. The Nasdaq closed down 0.7%. The Nasdaq 100 closed down 0.4%. The Russell 2000 closed down 1.6%. The DJ Transportation Avg. closed down 0.2%. The DJ Utilities Avg closed up 0.1%.

Gold plunged a huge $92 an ounce to $1,696.

Oil closed up $.35 a barrel at $106.90 a barrel.

The U.S. dollar etf UUP closed up 0.8%.

The U.S. Treasury bond etf TLT closed down 0.6%.

Yesterday in European Markets.

European markets gave up earlier gains to also close down. The London FTSE closed down 1.0%. The German DAX closed down 0.5%. And France’s CAC closed down 0.1%.

Subscribers to Street Smart Report: There is an in-depth U.S. Market Signals and Recommendations report from yesterday, including gold, in the subscribers’ area of the Street Smart Report website, and an in-depth Global Markets update from Monday evening.

Asian Markets Were Also Down Last Night.

The Asia Dow closed down 1.0%. The South Korea market was closed for a holiday.

Among individual markets:

Australia closed down 1.0%. China closed down 0.1%. Hong Kong closed down 1.4%. India closed down 1.0%. Indonesia closed down 0.6%. Japan closed down 0.2%. Malaysia closed up 0.1%. New Zealand closed up 0.2%. Singapore closed down 0.5%. Taiwan closed down 0.1%. Thailand closed up 0.3%.

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Markets This Morning:

European markets are back up this morning. The London FTSE is up 0.8%. Germany’s DAX is up 0.9%. France’s CAC is up 1.1%

Oil is up $0.61 a barrel at $107.68.

Gold is bouncing back some, up $11 at $1,708 after yesterday’s big plunge of $92 an ounce.

This Morning in the U.S. Market:

This week is a fairly heavy week for potential market-moving economic reports, including Durable Goods Orders, the final revision to 4th quarter GDP, the Chicago PMI, and the ISM Mfg Index. To see the full list click here, and look at the left side of the page it takes you to.

Monday’s report was that Pending Home Sales were up 2.0% in January, with the Index rising to 97.0.

Tuesday’s reports were that Durable Goods Orders surprised on the downside, declining 4.0% in January after rising 3.2% in December. And the Case-Shiller Home Price Index showed home prices fell in December for the 4th straight month by its measurement methods. But the Conference Board’s Consumer Confidence Index jumped to 70.8 in February from 61.5 in January.

Yesterday’s reports were that 4th Quarter GDP was revised to growth of 3.0% rather than the previously reported 2.8%. The Chicago PMI rose to 64.0 in February from 60.2 in January. And the Fed’s ‘Beige Book’ showed that the U.S. economy began the year even stronger than the Fed previously realized, with all 12 of the Fed districts reporting growth in January and the first half of February.

This morning’s reports were that new weekly unemployment claims fell by another 2,000 last week, and the more important 4-week m.a. fell by another 5,500 to 354,000. And Personal Income rose 0.3% in January, while Personal Spending rose 0.2%.

Still to come are the ISM Mfg Index, and Construction Spending, both being released at 10 a.m.

The reports have had no effect on the pre-open indicators, which remain somewhat positive.

Our Pre-Open Indicators:

Our pre-open indicators are pointing to the Dow being up 50 points or so in the early going, aiming at 13,000 again.

To read my weekend newspaper column ‘Can The U.S. Economy Sidestep Europe’s Recession?’ Click here.

Subscribers to Street Smart Report: There is an in-depth U.S. Market Signals and Recommendations report from yesterday, including gold, in the subscribers’ area of the Street Smart Report website, and an in-depth Global Markets update from Monday evening.

I’ll be back with the next regular blog post on Saturday morning, as usual later than the week-day posts, probably around 11:00 a.m. eastern time.

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Our portfolios were up an average of 9.4% last year, our Seasonal Timing Strategy up 15.8%, in a flat year (S&P 500 unchanged for year) when many, if not most, managers and funds were down for the year. We were on Hulbert’s Ten Best Newsletters of the Year list for the 2nd time in 4 years, and #4 Long-Term Market-Timer in Timer Digest’s rankings. And we are off to a great start this year. And we’re up nicely so far this year.

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