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Despite news/speculation that the Fed may start tapering its bond purchasing program, traders may be looking for a bounce at current levels. Bond indices are at or approaching long-term trend lines:

US 30 Year US Treasury Bond:

30 year bond

 

iShares Barclays 20+ Year Treasury Bond Fund (“TLT”)

tlt CBOE Interest Rate 10-Year T-Note:

TNX

 

Traders may be looking at these current levels for a bounce. ETF inflows for September show some interesting trends.

Ishares 3-7 Year Treasury Bond (“IEI”) and the Proshares Ultra 7-10 Year Treasury (“UST”) ETFs are showing large inflows month to date. In addition, we are seeing iShares TIPS (“TIP”) ETF – which are typically used as a hedge against inflation – showing outflows during the same time:

etf inflows

 

This may be an indication that traders are looking for a bounce as the market tests some of the historical trends that we are currently approaching.

 

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