The market continued its slide this week as we saw the S&P 500 fall -2.22% for the week and the month of June. Two months into the second quarter it is down -8.61% and year to date down -3.69%. We had surprisingly weak job numbers and news that Hungary could be the next Greece in the Euro-drama story. Nothing new, just a continuation of the theme we have been seeing. We are continuing to watch positions and as stop loss points are hit we use that as an opportunity to raise cash.
This week we will look at a couple of fixed income ETFs. In times of turmoil, capital migrates to bonds, but not all bonds are created equally.
Consider: Vanguard Long Term Bond (BLV) - while off its recent high, BLV ranks high in the fixed income universe and is trading above its trend lines providing a nice alternative to consider over equities. We would consider BLV with a stop loss around $76.50.
Avoid: SPDR Barclays Capital Short Term International Treasury Bond (BWZ) - BWZ ranks near the bottom of fixed income ETFs and is trading well below its 50 and 200 day moving average. We may see a little consolidation here but there isn't much reason to be holding the ETF. We would be avoiding BWZ.
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