Whether you want to admit it or not, interest rates are rising.
But what most investors and traders don’t realize is that you can still profit from rising interest rates. It’s just a matter of knowing where to look.
So today I want to give you some analysis of where the bond market currently is because it’s strongly impacting the price of stocks, along with a few companies that stand to profit from rising interest rates.
And this is important because it looks like the iShares 20+ Year Treasury Bond (Nasdaq: TLT) and the stock market are locked in with each other.
Stocks That Stand To Profit From Rising Interest Rates
If you take a look at the TLT, you’ll notice it dropped from the 153 level to 136 over the past quarter.
And remember, interest rate yields and bonds have an inverse relationship. So as the bond market goes down, interest rates go up. The TLT dropped, so interest rates went from about 0.93% to about 1.5% in the same period of time.
(Disclaimer: if you’re not trading futures, you could look at the TLT ETF and it’ll mimic the 10- or 30-year future contracts tick for tick.)
But look at a shorter time frame… like six months. You’ll see that price action is moving lower, while my RSI oscillator is moving higher.
That’s called negative divergence, and it’s actually the opposite of what we’ve been seeing in the stock market. The market is moving higher, but the oscillator can’t sustain that level of momentum.
It’s now showing the similar but opposite thing on the bond market.
And that’s telling me the bond market is going to move higher in the short term, so don’t be surprised if you see interest rates deflate and the bond market go slightly higher. But again, it’s going to be short-lived.
So now the real question is how can we profit from rising interest rates?
Check out my short video below to reveal the best way to profit from rising interest rates. You’ll want to grab a pen and piece of paper because these stocks have the potential to be winners over the next quarter or two.
And as always, don’t forget to subscribe to my YouTube channel if you haven’t already so you can be notified as soon as I post my next video!
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