Is This Why Bill Gross Is Now Buying Government Bonds?

April 12th, 2013

by Chris Kimble

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CNBC broke the story two days ago that PIMCO's Bill Gross was buying Government bonds (see story here).

Why does he like bonds now? Could part of the reason be the patterns and bond sentiment in the 2-pack below?

The charts above reflect that bullish flag patterns in TLT & IEF could have formed and bullish sentiment is now at levels where prior rallies in bonds took place. The Power of the Pattern shared this formation a week ago with Members a week ago and on Stocktwits a few days ago. Bonds have done well since, making almost 25% of SPY's gains on the year, in a few days!

Another reason Bill Gross could be buying bonds in the weakness/breakdowns in the Commodity complex reflected in the 4-pack below.

If Gross is right about a bond rally, could a breakdown in Copper and Crude Oil put downside pressure on SPY at all-time highs? Stay tuned!

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