Looking at the Treasuries market, the iShares 20+ Year Treasury Bond ETF (NYSEArca: TLT) experienced a slight outflow of $49.2 million last week. While the ETF has broke above its 200-day moving average, investors are growing more complacent, with China concerns abating and focus back on riskier equities.
Bonds have made a pretty substantial move higher in this recent pocket of volatility in the stock market,” Todd Gordon, founder of TradingAnalysis said on CNBC. “I think the stock market is beginning to stabilize and that’s going to set the bond market up for a little bit of a retracement.”
Gordon also warned that TLT is showing a “momentum divergence,” with a pattern of three lower lows in its relative strength index as prices made three higher highs. Consequently, the technical analyst believes the market is due for a pullback in the near-term.
For more information on the fixed-income market, visit our bond ETFs category.
Max Chen contributed to this article.