The iShares 20+ Year Treasury Bond ETF (TLT) enjoyed a good bit of buying on Thursday, but the closer the ETF gets to its late-May $123.57 swing high, the more interested I become in stalking an entry on the short side. It's also worth noting the downtrend line dating back to the late-January swing high intersects that $123.57 level.
Has anyone not noticed the massacre in energy related master limited partnerships? If you haven't already read Jim Cramer's piece on the MLPs, posted Thursday morning, I'd urge you to do so. Go ahead and do it now, I'll wait.
Getting back to the MLPs, it's important for investors, particularly those prone to relying primarily on charts, to look beyond the normal candlestick or bar charts and study the total return charts. I believe it would be fair for a dividend investors to argue total-return charts should always be the default choice. But given the high yields many MLPs pay, this is one instance where I believe a study of the total return is particularly important.
As an example, let's study the price percent change for Energy Transfer Partners (ETP) over a 1-, 5-, 10- and nearly 20-year time horizon. I realize most investors these days struggle to see beyond the end of the current month. But let's pretend, if only for a moment, that theoretically long-term investors actually hold stocks for some period greater than a single year.
To be clear, total return assumes you reinvests all dividends. And as you can imagine, neither tax consequences, nor trading costs (of reinvesting those dividends) are ever considered.
The obvious takeaway from the percent-change charts above is how mind-blowingly important it is for longer-term investors to check that little re-invest-dividends box. Beyond that, I hope higher-timeframe investors will take the time to further investigate the value in studying charts that take into account the total return of a stock and not simply the day-to-day price change.
Any trading or volume profile related questions can be posted in the comments section below, e-mailed to me at firstname.lastname@example.org or posted to my Twitter feed @ByrneRWS