NEW YORK (TheStreet) -- Are Treasuries and copper sending us a message that's different from what the stock market is telling us? I think so.
As stocks continue to hit record highs on a regular basis, Treasury yields have been sinking -- an indication that bond prices were climbing. A number of investors were seeking the safe haven of Treasuries, despite the fact that stock prices were soaring. Why?
Although we have seen the demand for Treasuries surge since the beginning of the Crimea crisis, a look at the chart for the ten-year Treasury yield depicts a massive, fully-formed, head-and-shoulders pattern, which would suggest that the decline in Treasury yields has just begun. Also, since the beginning of 2014, Treasury yields have been in a steady downtrend.
Why had there been such an intense flight to the safe haven of Treasuries months before Russia invaded Crimea?
The chart for the iShares Barclays 20+ Year Treasury Bond Fund (TLT) is heading higher from a bullish "double bottom" pattern, which was established on Feb. 12 and Feb. 20. On Thursday, Feb. 27, a full day before the story first broke concerning Russia's move on the Crimea, the relative strength index for TLT was approaching the "overbought" threshold of 70.
Old "Dr. Copper" also seems to be sending us a message. For many years, investors have watched copper prices for signals on global economic health. Falling copper prices suggest softer demand, which is usually a symptom of an economic slowdown because copper is sought for so many industrial purposes: wire, printed circuit boards, construction materials, as well as heating and cooling systems.