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  A TIP ON TIPS  
    3/19/2010  
       
   
 

A Tip On TIPS
by Carl Swenlin
March 19, 2010

TIPS are bonds that provide inflation protection. While Erin covered this subject in yesterday's blog, I wanted to cover it with a little more depth and from a somewhat different perspective. Our default "first look" charts are usually set for one year, but I personally like to step back to a three-year chart to help put recent price action in a longer-term context.

I think the most prominent feature on the chart is the crash in October 2008. Before that you can see the strong advance, coinciding with people's belief that prices on everything would rise forever. Prices leveled in 2008 as the inflation belief began to be undermined. The crash in TIPS occurred when both real estate and stocks were crashing and fear of deflation took hold. TIPS began to advance again out of the depths of the crash.



Since the November 2009 top, TIPS have moved sideways into a triangle formation. This is also called a continuation pattern, meaning that prices are technically expected to continue higher once the consolidation phase has completed. Prices have been turned back from overhead resistance for a third time, and I think this could be the final pullback before an upside breakout occurs. Supporting this opinion is the fact that (1) the 50-EMA is above the 200-EMA (bull market for TIPS), (2) we have a PMO crossover buy signal in relatively oversold territory, and (3) the 20-EMA is close to crossing up through the 50-EMA, which will generate a Trend Model buy signal.

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NEW DECISION POINT BLOG

We have started a blog for subscribers. It will be a lot like the Chart Spotlight articles, but covering more subjects. I am posting a weekly blog on Fridays, and Erin is making daily postings Monday through Thursday.

The blog will be included in your Decision Point subscription at no extra charge. I think it will make a huge difference in the value you receive as a subscriber.

To clarify, the Chart Spotlight pages are not the actual blog. We will continue to post articles to Chart Spotlight, which in most cases, will be excerpts from the blog. See below for the subscriber's menu location of the blog link.



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Technical analysis is a windsock, not a crystal ball.

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2011 TIMER DIGEST RANKINGS FOR DECISION POINT

#48 Intermediate-Term Stocks (52-Weeks) (*TD Index 73.70 Vs. SPX 100.00)

#2 Bond Timer (TD Index: 117.7 Vs. Bonds 118.89)
#3 Bond Timer (5-Years) (TD Index: 139.13 Vs. Bonds 129.60)
#3 Bond Timer (10-Years) (TD Index: 167.20 Vs. Bonds 143.62)

#15 Gold Timer (TD Index: 106.30 Vs. Gold 110.23)
#3 Gold Timer (3 Years) (TD Index: 172.58 Vs. Gold 168.27)

#26 Long-Term Timer (2 Years) Stocks (TD Index 81.90 Vs. SPX 112.78)
#9 Long-Term Timer (5 Years) Stocks (TD Index 115.64 Vs. SPX 111.33)
#4 Long-Term Timer (10 Years) Stocks (TD Index 159.38 Vs. SPX 109.54)


2010 TIMER DIGEST RANKINGS FOR DECISION POINT

#16 Intermediate-Term Stocks (52-Weeks) (TD Index 105.07 Vs. SPX 112.78)
#6 Intermediate-Term Stocks (3 Years) (TD Index 152.31 Vs. SPX 85.65)
#7 Intermediate-Term Stocks (5 Years) (TD Index 156.44 Vs. SPX 100.75)
#10 Intermediate-Term Stocks (10 Years) (TD Index 135.84 Vs. SPX 95.26)

#6 Bond Timer (TD Index: 110.1 Vs. Bonds 105.29)
#5 Bond Timer (5-Years) (TD Index: 126.64 Vs. Bonds 106.24)
#3 Bond Timer (10-Years) (TD Index: 137.03 Vs. Bonds 116.27)

#6 Gold Timer (TD Index: 118.50 Vs. Gold 129.73)
#3 Gold Timer (3 Years) (TD Index: 172.58 Vs. Gold 168.27)

#26 Long-Term Timer (2 Years) Stocks (TD Index 91.9 Vs. SPX 139.23)
#8 Long-Term Timer (3 Years) Stocks (TD Index 124.30 Vs. SPX 85.65)
#4 Long-Term Timer (5 Years) Stocks (TD Index 146.21 Vs. SPX 100.75)
#4 Long-Term Timer (10 Years) Stocks (TD Index 177.64 Vs. SPX 95.26)


2009 TIMER DIGEST RANKINGS FOR DECISION POINT

#9 Intermediate-Term Stocks (52-Weeks) (TD Index 129.36 Vs. SPX 123.45)
#8 Intermediate-Term Stocks (5 Years) (TD Index 147.81 Vs. SPX 92.01)

#18 Bond Timer (TD Index: 87.7 Vs. Bonds 83.86)
#5 Bond Timer (10-Years) (TD Index: 127.25 Vs. Bonds 127.51)

#9 Gold Timer (TD Index: 115.30 Vs. Gold 124.00)
#3 Gold Timer (3 Years) (TD Index: 181.56 Vs. Gold 169.92)
#3 Gold Timer (10 Years) (TD Index: 322.74 Vs. Gold 375.51)

#6 Long-Term Timer (2 Years) Stocks (TD Index 136.41 Vs. SPX 75.94)
#7 Long-Term Timer (3 Years) Stocks (TD Index 141.22 Vs. SPX 78.62)
#2 Long-Term Timer (5 Years) Stocks (TD Index 165.27 Vs. SPX 92.01)
#5 Long-Term Timer (10 Years) Stocks (TD Index 162.51 Vs. SPX 75.90)


2008 TIMER DIGEST RANKINGS FOR DECISION POINT

#17 Intermediate-Term Stocks (52-Weeks) (TD Index 111.9 Vs. SPX 61.51)

#4 Bond Timer (TD Index: 112.32 Vs. Bonds 118.26)

#5 Gold Timer (TD Index: 126.33 Vs. Gold 104.61)

#9 Long-Term Timer (2 Years) Stocks (TD Index: 132.35 Vs. SPX 63.69)
#2 Long-Term Timer (3 Years) Stocks (TD Index: 150.38 Vs. SPX 72.36)
#2 Long-Term Timer (5 Years) Stocks (TD Index: 168.82 Vs. SPX 81.23)
#3 Long-Term Timer (10 Years) Stocks (TD Index: 159.36 Vs. SPX 73.48)


2007 TIMER DIGEST RANKINGS FOR DECISION POINT

#40 Intermediate-Term Stocks (52-Weeks) (TD Index 91.9 Vs. SPX 103.28)

#5 Bond Timer (TD Index: 105.85 Bonds 104.39)
#5 Bond Timer (3 Years) (TD Index: 114.48 Vs. Bonds 103.58)

#2 (Tied) Long-Term Timer (2 Years) Stocks (TD Index: 117.63 Vs. SPX 117.63)
#2 (Tied) Long-Term Timer (3 Years) Stocks (TD Index: 132.06 Vs. SPX 132.06)
#4 Long-Term Timer (5 Years) Stocks (TD Index: 142.69 Vs. SPX 127.90)


2006 TIMER DIGEST RANKINGS FOR DECISION POINT

#11 Intermediate-Term Stocks (52-Weeks) (TD Index 111.3 Vs. SPX 113.6)

#3 Bond Timer (TD Index: 112.32 Vs. Bonds 97.46)


2000 TIMER DIGEST GOLD TIMER of the YEAR


*All timers and the benchmark index are assigned a starting TD Index of 100 at the beginning of the year. The amount above or below the starting index indicates the percentage gain or loss for the year.

Beginning in 2006 we began using mechanical models -- the Trend Model for Bonds, Gold, and Long-Term Stocks, and the Thrust/Trend Model for Intermediate-Term Stocks. Prior to 2006 we used discretionary signals.

Nothing herein should be construed as an offer or solicitation to buy or sell any security. Past performance does not indicate future results.

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BIO: Carl Swenlin is a self-taught technical analyst, who has been involved in market analysis since 1981. A pioneer in the creation of online technical resources, he is president and founder of DecisionPoint.com, a premier technical analysis website specializing in stock market indicators, charting, and focused research reports. Mr. Swenlin is a Member of the Market Technicians Association.

 
   
   
   
   
 

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