If you look at charts of most "income plays," they seem to be rolling over again just like they did last May. See BLE in the link just as an example....
Clearly, the doomsday scenario of last May was avoided somehow. Remember there was talk of the carry trades unwinding and a coming "bond crash"....well that didn't happen; it was all another head fake.
But, is it a head fake this time.....?
Clearly the "bond crash" of last spring had an escape hatche available to it. Central Banks in Asia came to the rescue.
But now there are even more ominous problems with debt, deficits and the dollar. And rates are going up in the US at a "likely measured pace," but it is a relentless measured pace to be sure.
Whether there will be a true crash in income instruments will depend on the state of the bond market....if it really does tank this time....? Closed End Funds and other income plays could get hammered badly....like they were supposed to last May.
But the downward trend is established for Closed Ends now....will it continue?
And if so....when will it cause large scale dumping of bonds and other income plays?
Stay tuned......this could get interesting.
