US bonds rolling over, Canadian bonds questionable

After a summer of relatively good performance, the US long bond looks to be breaking down. We sold our 5% position in this sector on the expectation that risk is now greater then reward potential. Seasonals end in early October for bonds, but it was the chart that gave us the nudge out of the position. Here is the TLT 20 year bond chart with my notations.

TLT 20 year bond chart for Summer 2017


As you will see, the neartermed trend is breaking, and momentum has rounded over. Comparative strength vs the S&P500 stock index was strong, but just now is turning down.

Meanwhile, the Canadian long bond has not shown the strength of its US counterpart this summer. It’s been losing ground consistently since July. Momentum and relative strength were poor over the summer. The XLB long bond ETF shows us that there may be a test of the longer termed uptrend in the works. Perhaps the BOC Governor Stephen Poloz’s “soft talk” on the loonie and the CDN economy will keep the CDN long bond on the trendline. Currencies and bonds do tend to have a correlation. We shall see.

Canadian Long Bond ETF XLB.TO performance for Summer 2017


Attention snowbirds- keep February 10th open


Some of you know that I speak at the Toronto MoneyShow every year. This winter, the MoneyShow has invited me to speak at their Orlando show on February 10th at 6:15pm. Honestly—who would say no to that offer, given our wretched winter weather in Ontario? If you happen to travel to central Florida during the winter, or if you have family/friends who do the snowbird routine—come on over to the show. It’s taking place in the Omni Orlando Resort – and since I don’t know the city, I can’t tell you where that is just yet! I’ll post further details when the time draws nearer.


  • If you would comment on your opinion of the Shopify situation. Do you think we should be running for the exits and selling or holding on? Up 60%. Wouldn’t want to loose my position,if there was more upside. Was doing very well with Nexgen,earlier this year and lost over $25,000 in profit and was lucky to get out with $1000 profit. Thank you for your time. Jack

    • Jack I normally don’t give individual stock advice on this blog–thats why I go on BNN’s Market Call show
      However–SHOP does have support at or near the $114-ish area–so you could see if that holds I suppose. A break of that would be bad. Depends on your tolerance for downside whether you wait for that. Its officially still on a longer termed uptrend. But that can change. Watch the $114-$116 area and see what happens.


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