With the equity markets having slipped into bear market territory, and momentum numbers showing mostly negative figures, let’s look at bond and dividend ETFs from my High Volume Master list.
From the total of 51 ETFs that I track for this category, there are only 21 that qualify to be listed on this report, as their daily average volume exceeds $10 million.
Take a look:
[If you are not familiar with some of the terminology used, please see the Glossary of Terms.]
No surprise that TLT is leading as it has been the goal of the Fed to reduce rates on the long end of the yield curve. It’s interesting to note that TLT has suddenly come off its high by -1.86% (DD% column) as rates rose last Friday.
As I said before, we have entered unchartered territory and there is no way of telling whether the Fed policy, Operation Twist, will work for any length of time. Interest rates could be affected by global events and end up actually rising instead of falling.
We have no holdings in TLT, but if you are looking for some income via these types of ETFs, drop down the list to the middle and stay with Intermediate term bonds, as they have less volatility should rates inch higher.
No matter which way you decide to go, be sure to use my recommended sell stop discipline, as we are living in times of great uncertainty and volatility, so an exit strategy is an absolute must.