Friday, August 28, 2009

Where are other inverstors flying to? - Updated 08-29

As you may know fixed income investments like bonds are the traditional alternative to stocks for those who are looking for less risk. In general, more people (and more money) flows into bonds when they fear about negative economic outlook and when they lose conviction on more risky instruments like equities.
Among different types of bonds, those who deserve maximum grade (credit quality) are the safest and receive a bigger percentage of those investors who are "flying to safety".
That is why I believe German bonds are something to be aware of since are the perfect target for wealth getting away from stocks. In other words, once we see this bonds rising above significant levels (marked below) we can be quite sure the smart money is leaving equities.


German Schatz - Weekly


Shatz - Daily



Update 08-29 - Bund daily
We can see here many signs that confirme the bullish structure. On Friday, it closed above 200 MA. The only cons I can see is the negative divergence with RSI.





Bund daily