The Dow Theory again confirmed a Primary Tide Bull Market as of 11/3/10, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed above their closing price highs of the previous 25 months.
The U.S. dollar nearest futures contract price fell below 11-month lows, thereby demonstrating bearish long-term price momentum. Sentiment has been extremely bearish for months, but it appears that bearish fundamentals might be overcoming the bottom fishing temptation.
CRB index of commodity prices rose above 2-year highs and remains bullish.
Crude Oil rose above 6-month highs, thereby showing bullish intermediate-term price momentum.
Silver/Gold Ratio rose further above 2-year highs, again confirming a bullish trend. Silver has outperformed Gold substantially since 8/20/10.
Consumer Discretionary stock sector Relative Strength Ratio (XLY/SPY) rose above 12-year highs and remains bullish. XLY has been at the top of my sector rankings for more than a year and has outperformed substantially.
Technology stock sector Relative Strength Ratio (XLK/SPY) rose above 8-year highs and remains bullish.
Consumer Staples stock sector Relative Strength Ratio (XLP/SPY) fell below 3-month lows and remains bearish.
Health Care stock sector Relative Strength Ratio (XLV/SPY) fell below 3-month lows and remains bearish, as it has been most of the time since peaking on 2/23/09.
Utilities stock sector Relative Strength Ratio (XLU/SPY) fell below 4-month lows.
Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) rose above 2-week highs and is bullish again.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) rose above 2-week highs and is bullish again.
S&P 500 Composite (SPX, 1,197.96) rose 4.39 points or 0.37% on Wednesday 11/3/10. SPX closed above 6-month highs, thereby confirming its uptrend. Price momentum oscillators remain below October highs, but the market appears to be shrugging off this momentum divergence–so far.
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Spotlight on event stocks: Here is a stock screen I designed to pick out potential event stocks, both Bullish and Bearish. Sometimes, stocks with large changes in price and volume are revealed to be deal stocks, sooner or later, or are the subject of some other extraordinary events, positive or negative.
Bullish Stocks: Rising Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
9.18% , HIG , HARTFORD FINL
3.47% , DVN , DEVON ENERGY
5.20% , F , FORD MOTOR
0.18% , FDV , Value 40 Large Low P/E FT DB, FDV
3.44% , AIG , AMER INTL GROUP
3.93% , TBT , 200% Short US T Bond, TBT
0.38% , IYY , LargeCap Blend Total Market DJ, IYY
0.51% , DGT , Global Titans, DGT
0.22% , IXC , Energy Global, IXC
2.71% , SYK , STRYKER
0.71% , KCE , Capital Markets KWB ST, KCE
2.81% , MET , METLIFE
3.94% , TAP , ADOLPH COORS STK B, TAP
0.69% , THD , Thailand MSCI iS, THD
3.90% , MTB , M&T BANK
0.34% , KWT , Solar Energy MV, KWT
2.12% , FXI , China 25 iS, FXI
3.85% , DLX , DELUXE
4.90% , FITB , FIFTH THIRD BANC
0.13% , GVI , Bond Interm U.S. Gov, GVI
1.82% , EWH , Hong Kong Index, EWH
3.30% , PBI , PITNEY BOWES
0.37% , IWV , LargeCap Blend Russell 3000, IWV
0.83% , PSI , Semiconductors, PSI
1.12% , IYG , Financial Services DJ, IYG
0.19% , PWO , OTC Dynamic PS, PWO
2.69% , MOLX , MOLEX
2.10% , HPQ , HEWLETT PACKARD
0.66% , EWQ , France Index, EWQ
0.56% , EWI , Italy Index, EWI
0.84% , XSD , Semiconductor SPDR, XSD
4.92% , AN , AUTONATION
0.69% , EWU , United Kingdom Index, EWU
2.19% , PNC , PNC FINL SVC
4.87% , NYT , NY TIMES STK A
3.21% , MS , MORGAN STANLEY
1.30% , PXN , Nanotech Lux, PXN
0.69% , VWO , Emerging VIPERs, VWO
0.70% , PXQ , Networking, PXQ
2.92% , CMA , COMERICA
Bearish Stocks: Falling Price and Rising Volume
Ranked by Price Change * Volume Change
% Price Change, Symbol, Name
-9.31% , EOG , EOG RESOURCES
-0.86% , BDH , Broadband H, BDH
-3.70% , EP , EL PASO
-5.30% , GRMN , GARMIN LTD
-2.50% , PIC , Insurance, PIC
-4.25% , DISCA , Discovery Communications
-7.68% , PHM , PULTE HOMES
-4.43% , LVLT , LEVEL 3 COMMUNICATIONS
-2.04% , TLT , Bond, 20+ Years Treasury, TLT
-1.11% , ECH , Chile MSCI iS, ECH
-4.65% , CECO , CAREER EDUCATION CORP
-3.29% , UNM , UNUMPROVIDENT
-3.70% , OMX , OFFICEMAX INC., OMX
-2.39% , SNV , SYNOVUS
-2.68% , LNC , LINCOLN NATL
-4.32% , ERTS , ELECTRONIC ARTS
-2.43% , XL , XL CAPITAL STK A
-3.95% , WPO , Washington Post
-2.00% , AGN , ALLERGAN
-0.77% , PST , 200% Short Bond 7-10 Yr T, PST
-0.69% , GLD , Gold Shares S.T., GLD
-0.55% , TLH , Bond 10-20 Year US Treas, TLH
-1.60% , JBL , JABIL CIRCUIT
-1.31% , MSFT , MICROSOFT
-0.49% , IGV , Software, IGV
-0.80% , IDX , Indonesia MV, IDX
-0.75% , IAU , Gold COMEX iS, IAU
-1.58% , BBBY , BED BATH BEYOND
-0.90% , ODP , OFFICE DEPOT
-0.93% , LH , LAB CRP OF AMER
-0.78% , SDS , Short 200% S&P 500 PS, SDS
-0.07% , PID , Dividend International, PID
-0.30% , XME , Metals & Mining SPDR, XME
-0.77% , CHRW.O , CH Robinson Worldwide Inc, CHRWD
-0.93% , CSC , COMPUTER SCIENCE
-1.97% , CTSH , Cognizant Technology Solutions
-0.59% , AYE , ALLEGHENY ENERGY
-1.28% , DV , DeVry, Inc.
-1.12% , ALL , ALLSTATE
-0.91% , PEP , PEPSICO
9 major U.S. stock sectors ranked in order of long-term relative strength:
Consumer Discretionary (XLY) Bullish, Over Weight. The Relative Strength Ratio (XLY/SPY) rose above 12-year highs on 11/3/10 and remains bullish. XLY has been at the top of my sector rankings for more than a year and has outperformed substantially. Absolute price rose further above 6-month highs on 11/3/10 and remains bullish. Support 33.94, 33.11, 32.66, 31.70, 29.80, 28.64, 28.21, and 26.62. Resistance 36.13, 38.25 and 39.09.
Technology (XLK) Bullish, Over Weight. The Relative Strength Ratio (XLK/SPY) rose above 8-year highs on 11/3/10 and remains bullish. Absolute price of XLK rose above 2-year highs on 11/3/10 and remains bullish. Support 23.64, 23.56, 22.68, 22.53, 21.60, 20.01, and 19.51. Resistance 25.69.
Industrial (XLI) Neutral, Market Weight. The Relative Strength Ratio (XLI/SPY) fell below 7-week lows on 11/3/10 and remains neutral. Absolute price rose above 5-month highs on 10/25/10 and remains bullish. Support 31.58, 30.79, 30.51, 30.32, 29.77, and 27.67. Resistance 32.95, 33.04, 35.00, and 36.16.
Materials (XLB) Neutral, Market Weight. The Relative Strength Ratio (XLB/SPY) trend has turned neutral/sideways since peaking on 9/13/10. Absolute price rose above 6-month highs on 11/2/10 and remains bullish. Support 33.70, 32.36, 29.88, 29.43, and 27.67. Resistance 35.47 and 37.56.
Energy (XLE) Neutral, Market Weight. The Relative Strength Ratio (XLE/SPY) rose above 5-month highs on 10/14/10 but remains technically neutral, with the 50-day SMA below the 200-day SMA. Absolute price rose above 5-month highs on 10/25/10 and is bullish, with the rising 50-day SMA above the 200-day SMA. Price peaked at 62.30 on 4/26/10. Support 57.70, 55.68, 53.22, 50.33, 48.56, 46.16, and 43.66. Resistance 60.29, 62.30, 62.73, 69.95, and 78.10.
Consumer Staples (XLP) Bearish, Under Weight. The Relative Strength Ratio (XLP/SPY) fell below 3-month lows on 11/3/10 and remains bearish. Absolute price rose above 2-year highs on 10/25/10 and remains bullish. Support 28.28, 28.04, 27.76, 27.63, 27.46, 26.34, 25.30, and 24.95. Resistance 29.00, 29.29 and 30.29.
Health Care (XLV) Bearish, Under Weight. The Relative Strength Ratio (XLV/SPY) fell below 3-month lows on 11/3/10 and remains bearish, as it has been most of the time since peaking on 2/23/09. Absolute price of XLV remains neutral. Price peaked at 33.16 on 1/20/10. Support 30.70, 30.11, 29.87, 28.00, 27.49. Resistance 31.64, 32.05, 32.18, 32.42, 32.69, 33.16, 33.37 and 33.74.
Utilities (XLU) Bearish, Under Weight. The Relative Strength Ratio (XLU/SPY) fell below 4-month lows on 11/3/10. Absolute price of XLU turned neutral on 11/1/10 when price crossed below the 50-day SMA, which remains above the rising 200-day SMA. Support 31.25, 30.76, 30.15, 29.66, 27.91, 27.44, and 25.76. Resistance 32.40.
Financial (XLF) Bearish, Under Weight. The Relative Strength Ratio (XLF/SPY) fell further below 17-month lows on 10/15/10 and remains bearish. Absolute price of XLF bounced up into the neutral zone on 10/18/10 when it crossed above its 50-day SMA. XLF price remains below its 200-day SMA, and the 50-day SMA remains below the 200-day SMA. XLF has been bearish most days after peaking at 17.12 on 4/15/10. Support 14.25, 13.29, and 13.08. Resistance 15.00, 15.09, 15.67, 16.13, 16.90, 17.12, 17.16, and 17.87.
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Emerging Markets Stocks ETF (EEM) Relative Strength Ratio (EEM/SPY) rose above 2-week highs on 11/3/10 and is bullish again.
Foreign Stocks ETF (EFA) Relative Strength Ratio (EFA/SPY) rose above 2-week highs on 11/3/10 and is bullish again.
NASDAQ Composite/S&P 500 Relative Strength Ratio rose above 9-year highs on 11/2/10 and remains bullish. Absolute price rose above 2-year highs on 11/3/10 and remains bullish.
The Largest Cap S&P 100/S&P 500 Relative Strength Ratio (OEX/SPX) fell below 28-year lows on 11/2/10. The ratio has been trending lower since 8/3/10. Longer term, big caps have been relatively out of favor for more than 10 years, since 3/29/2000.
The Small Cap Russell 2000 Index/Large Cap Relative Strength Ratio (IWM/SPY) rose above 2-week highs on 11/2/10, thereby turning bullish for the short term. IWM/SPY has been correcting and consolidating major uptrend gains since peaking on 5/17/10.
The S&P MidCap 400/Large Cap Relative Strength Ratio (MDY/SPY) rose above 15-year highs on 9/30/10 and remains bullish. Absolute price rose above 6-month highs on 11/3/10 and remains bullish, with the rising 50-day SMA above the rising 200-day SMA.
Crude Oil nearest futures contract price rose above 6-month highs on 11/3/10, thereby showing bullish intermediate-term price momentum. If Oil can go on to surpass its 2-year high at 87.15 set on 5/3/10, the major trend could be confirmed as bullish. Support 79.84, 78.86, 72.63, 70.76, 70.35, 69.51, 68.59, 67.15, 65.05, and 64.24. Resistance 87.15, 90.51, 98.65, and 102.84.
Gold nearest futures contract price has turned choppy/sideways since setting a high at 1388.1on 10/14/10. Support 1315.6, 1297.0, 1274.8, 1270.5, 1232.4, 1210.9, 1191.5, and 1155.6. Resistance: 1388.1, the high on 10/14/10.
Gold Mining Stocks ETF (GDX) Relative Strength Ratio (relative to the Gold bullion ETF, GDX/GLD) rose above 2-week highs on 11/2/10, thereby cancelling a bearish signal for the Secondary, intermediate-term trend. Still, GDX has been underperforming GLD since 9/22/10.
Silver/Gold Ratio rose further above 2-year highs on 11/3/10, again confirming a bullish trend. Silver has outperformed Gold substantially since 8/20/10.
Copper nearest futures contract price has turned choppy/sideways short term since setting a high at 3.90 on 10/27/10. Strength in Copper suggests confidence about prospects for the world economy, while weakness in Copper suggests doubts. Support 3.7035, 3.6445, 3.3930, 3.1775, 2.9285, 2.8555, 2.8445, and 2.72. Resistance 3.90, 4.0825, and 4.27.
U.S. Treasury Bond nearest futures contract price fell below the lows of the previous 3-trading days on 11/3/10, which is a bearish sign for the short term. The Bond broke down below 10-week lows on 10/27/10, confirming a bearish trend in that larger time frame. It appears possible that Bonds have topped for the intermediate-term trend. Support 129.18, 129.05, 126.01, 125.07, 124.19, 123.03, 121.28, 119.26, 118.24, 118.12, 115.15, 114.06. 113.04, and 112.15. Resistance 133.00, 135.12, 135.19, 136.31, 137.31, and 142.31.
Junk/Investment-Grade Corporate Bonds Relative Strength Ratio (JNK/LQD) rose above 5-month highs on 10/27/10. Absolute price rose above 2-year highs on 10/29/10 and remains bullish.
U.S. Treasury Inflation Protected / U.S. Treasury 7-10 Year Relative Strength Ratio (TIP/IEF) rose above 8-month highs on 10/14/10 and has been rising since 8/24/10. This implies that fixed-income investors have been choosing more inflation protection since 8/24/10.
The U.S. dollar nearest futures contract price fell below 11-month lows on 11/3/10, thereby demonstrating bearish long-term price momentum. Sentiment has been extremely bearish for months, but it appears that bearish fundamentals might be overcoming the bottom fishing temptation. Support 75.235, 74.27, and 70.80. Resistance 78.61, 80.505, 82.335, 83.315, 83.64, 83.96, 85.36, 86.71, 88.80, 89.22, 89.71, and 92.53.
Advisory Service Sentiment: There were 46.7% Bulls versus 24.4% Bears as of 11/3/10, according to the weekly Investors Intelligence survey of stock market newsletter advisors. The Bull/Bear ratio stands at a moderately above average 1.91, up from an extreme low of 0.78 on 9/1/10. That 0.78 was the lowest level of bullish sentiment in 17 months, since 3/25/09. Previously, the ratio had fallen substantially from and extreme peak at 3.36 set on 1/13/10, which was the highest bullish sentiment in 6 years. The 20-year range is 0.41 to 3.74, the median is 1.53, and the mean is 1.60.
VIX Fear Index fell sharply below 6-day lows on 11/3/10. This indicates increasing bullish complacency and decreasing concern and hesitancy by options players to chase obvious price strength. VIX is a market estimate of expected constant 30-day volatility, calculated by weighting S&P 500 Index CBOE option bid/ask quotes spanning a wide range of strike prices for the two nearest expiration dates.
The Dow Theory again confirmed a Primary Tide Bull Market as of 11/3/10, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed above their closing price highs of the previous 25 months. The Dow Theory signaled the current Primary Tide Bull Market on 7/23/09, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed above their closing price highs of the previous 6 months. That 7/23/09 bullish signal reversed the previous bearish signal: the two Averages signaled a Primary Tide Bear Market on 11/21/07, when both Averages closed below their closing price lows of August 2007.
S&P 500 Composite (SPX, 1,197.96) rose 4.39 points or 0.37% on Wednesday 11/3/10. SPX closed above 6-month highs, thereby confirming its uptrend. Price momentum oscillators remain below October highs, but the market appears to be shrugging off this momentum divergence–so far.
S&P 500 Cash Index Potential Resistance
1576.09, high of 10/11/2007
1552.76, high of 10/31/2007
1523.57, high of 12/11/2007
1498.85, high of 12/26/2007
1440.24, high of 5/19/2008
1406.32, high of 5/29/2008
1381.50, Fibonacci 78.6% of 2007-2009 range
1366.59, high of 6/17/2008
1335.63, high of 6/25/2008
1313.15, high of 8/11/2008
1274.42, high of 9/8/2008
1255.09, high of 9/12/2008
1238.81, Fibonacci 78.6% of 1,576.09 high
1228.74, Fibonacci 61.8% of 2007-2009 range
1220.03, high of 9/25/2008
1219.80, high of 4/26/2010
1198.30, high of 11/3/10
S&P 500 Cash Index Potential Support
1171.70, low of 10/27/10
1166.74, low of 10/20/10
1159.71, low of 10/19/10
1,151.41, low of 10/7/10
1,131.87, low of 10/4/10
1122.79, low of 9/23/2010
1114.63, low of 9/15/2010
1110.88, low of 9/10/2010
1091.15, low of 9/7/2010
1039.70, low of 8/27/10
1039.31, Fibonacci 23.6% of June-Aug. 2010 range
1010.91, low of 7/1/2010
1008.55, Fibonacci 38.2% of 2009-2010 range
991.97, low of 9/2/2009
978.51, low of 8/17/2009
956.23, high of 6/11/2009
943.29, Gann 50.0% of 2009-2010 range
878.04, Fibonacci 61.8% of 2009-2010 range
874.17, Gann 62.5% of 2009-2010 range
869.32, low of 7/8/2009
805.17, Gann 75.0% of 2009-2010 range
785.13, Fibonacci 78.6% of 2009-2010 range
666.79, intraday low of 3/6/2009
One-Day Ranking of Major ETFs, Ranked from Strongest to Weakest of the Day:
% Price Change, ETF Name, Symbol
2.12% China 25 iS, FXI
1.90% South Africa Index, EZA
1.82% Hong Kong Index, EWH
1.41% South Korea Index, EWY
1.30% Pacific ex-Japan, EPP
1.30% Oil, Crude, U.S. Oil Fund, USO
1.14% Turkey MSCI iS, TUR
1.12% Financial Services DJ, IYG
1.10% Networking, IGN
1.02% Semiconductor iS IGW, SOXX
1.02% Sweden Index, EWD
0.99% Financial SPDR, XLF
0.99% Austria Index, EWO
0.98% Transportation Av DJ, IYT
0.93% China LargeCap Growth G D H USX PS, PGJ
0.86% Singapore Index, EWS
0.84% Semiconductor SPDR, XSD
0.84% Switzerland Index, EWL
0.83% Australia Index, EWA
0.83% Financials VIPERs, VFH
0.82% Growth EAFE MSCI, EFG
0.80% Financial DJ US, IYF
0.71% Capital Markets KWB ST, KCE
0.70% Europe 350 S&P Index, IEV
0.69% United Kingdom Index, EWU
0.69% Thailand MSCI iS, THD
0.69% EAFE Index, EFA
0.69% Global ex US ACWI iS, ACWX
0.69% Emerging VIPERs, VWO
0.66% France Index, EWQ
0.64% Small Cap EAFE MSCI iS, SCZ
0.62% Emerging Markets, EEM
0.61% LargeCap Blend S&P 100, OEF
0.60% Russia MV, RSX
0.60% Bond Ex-US Treas, BWX
0.60% Microcap Russell, IWC
0.59% Info Tech VIPERs, VGT
0.58% Dividend High Yield Equity PS, PEY
0.57% Technology SPDR, XLK
0.57% Netherlands Index, EWN
0.56% Malaysia Index, EWM
0.56% Pacific VIPERs, VPL
0.56% Italy Index, EWI
0.54% Germany Index, EWG
0.53% Value S&P 500 B, IVE
0.51% Technology DJ US, IYW
0.51% Consumer Discretionary SPDR, XLY
0.50% Bond EmrgMkt JPM iS, EMB
0.50% Value LargeCap Dynamic PS, PWV
0.50% Growth SmallCap VIPERs, VBK
0.47% Commodity Tracking, DBC
0.47% Bond, High-Yield Junk, JNK
0.46% European VIPERs, VGK
0.46% Global 100, IOO
0.45% Growth LargeCap NASDAQ 100, QQQQ
0.45% Value EAFE MSCI, EFV
0.44% S&P 500 iS LargeCap Blend, IVV
0.43% Growth SmallCap R 2000, IWO
0.41% Blend Total Market VIPERs, VTI
0.40% Telecom DJ US, IYZ
0.40% Small Cap VIPERs, VB
0.40% S&P 500 SPDRs LargeCap Blend, SPY
0.40% WilderHill Clean Energy PS, PBW
0.39% SmallCap Russell 2000, IWM
0.39% Growth BARRA Small Cap 600, IJT
0.39% Growth 1000 Russell, IWF
0.38% Value VIPERs, VTV
0.38% EMU Europe Index, EZU
0.38% DIAMONDS (DJIA), DIA
0.37% SmallCap S&P 600, IJR
0.37% LargeCap Blend Russell 3000, IWV
0.36% Emerging 50 BLDRS, ADRE
0.36% India Earnings WTree, EPI
0.36% Value 1000 Russell, IWD
0.35% MidCap S&P 400 iS, IJH
0.34% LargeCap VIPERs, VV
0.34% LargeCap 1000 R, IWB
0.34% Value SmallCap S&P 600 B, IJS
0.33% Bond, High-Yield Corporate, HYG
0.32% Bond, 10 Year Treasury, IEF
0.32% MidCap S&P 400 SPDRs, MDY
0.31% Consumer Staples SPDR, XLP
0.31% India PS, PIN
0.31% Growth VIPERs, VUG
0.31% Value SmallCap Russell 2000, IWN
0.30% Growth MidCap 400 B, IJK
0.30% Japan Index, EWJ
0.29% Value SmallCap VIPERS, VBR
0.28% Value MidCap S&P 400 B, IJJ
0.28% Financial Preferred, PGF
0.27% MidCap Russell, IWR
0.27% Dividend SPDR, SDY
0.25% LargeCap Blend S&P=Weight R, RSP
0.24% Growth MidCap Russell, IWP
0.24% Growth S&P 500/BARRA, IVW
0.23% Energy DJ, IYE
0.23% Water Resources, PHO
0.22% Energy Global, IXC
0.21% Energy VIPERs, VDE
0.21% Taiwan Index, EWT
0.21% Energy SPDR, XLE
0.21% Canada Index, EWC
0.19% Brazil Index, EWZ
0.15% Industrial SPDR, XLI
0.15% Preferred Stock iS, PFF
0.14% Dividend DJ Select, DVY
0.14% Value MidCap Russell, IWS
0.14% Belgium Index, EWK
0.14% Biotech SPDR, XBI
0.09% Mexico Index, EWW
0.07% Agriculture DB PS, DBA
0.06% Health Care SPDR, XLV
0.06% Dividend Appreciation Vipers, VIG
0.05% Bond Muni ATM-Free S&P iS, MUB
0.04% Bond Treasury Short-Term iS, SHV
0.04% Bond, 1-3 Year Treasury, SHY
0.00% REIT VIPERs, VNQ
0.00% Natural Resource iS GS, IGE
-0.02% Bond, Aggregate, AGG
-0.07% Dividend International, PID
-0.11% Real Estate US DJ, IYR
-0.15% REIT Wilshire, RWR
-0.18% Utilities VIPERs, VPU
-0.18% Bond, TIPS, TIP
-0.19% Utilities SPDR, XLU
-0.21% Realty Cohen & Steers, ICF
-0.25% Silver Trust iS, SLV
-0.28% Materials SPDR, XLB
-0.29% Basic Materials DJ US, IYM
-0.30% Metals & Mining SPDR, XME
-0.30% Spain Index, EWP
-0.33% Bond, Corp, LQD
-0.38% Homebuilders SPDR, XHB
-0.40% Value SmallCap S&P 600, RZV
-0.45% Latin Am 40, ILF
-0.69% Gold Shares S.T., GLD
-0.80% Indonesia MV, IDX
-1.11% Chile MSCI iS, ECH
-2.04% Bond, 20+ Years Treasury, TLT