Defensive Gold and Treasuries Bullishly Break Resistance

File this under “very interesting” – defensive markets Gold and Treasuries just reversed higher.

If this continues, we could see a bearish development for the US Stock Market (money flow).

Let’s take a look and see if the breakout holds:

For some perspective, see our featured post “How Other Markets Behaved while Stocks Surged.

In it, you’ll see a broader look at the Money Flow across markets given the stock market’s recent surge.

Gold – and Treasuries – reversed higher on positive divergences in December and now hit a new phase in the reversal.

Gold broke above the $1,250 level this morning which is a key price pivot that confirms the bullish rally.

In fact, if Gold goes ahead to break above the 200 day SMA near $1,280, it would suggest a sustained rally through $1,300 and beyond.

That may not bode well for the non-stop uptrend in stocks.

We’re seeing a similar bullish breakout and reversal perspective on defensive US Treasuries:

The pattern is very similar with the collapse lower in November and eventual divergent reversal in December.

The Ten-Year US Treasury Note just broke above its resistance level at the 125 index level.

Once again, a sustained (valid) breakout here suggests price will continue through toward 127.

Unless these are just bull traps and false breakouts, it could suggest a turn in Money Flow from bullish/offensive to bearish/defensive.

Even if you’re just trading stocks, watch these markets to see what happens next.

Afraid to Trade Premium Content and Membership

Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.

Corey Rosenbloom, CMT

Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).”

Similar Posts