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Little has changed with the IEF chart since last week; we are still in the middle of a triangle consolidation. Prices have been moving generally lower since mid-March, but the percentage drop is 2.76% which is hardly an exciting move. Note that prices and the SMAs are still in a tight range indicating a lack of conviction to move prices in either direction.
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When prices are consolidating oscillators are better technical indicators. Therefore, it makes more sense to look at the stochastics right now. Notice that both the slow and fast stochastics are at the lower end of their technical range indicating a move higher from here is a bit more likely.
From a fundamental standpoint remember the following points:
1.) The Federal Reserve is buying Treasuries which will put a floor under prices.
2.) While the market has rallied since early March, Treasury prices have not had a huge drop-off. Considering the magnitude to the stock rally (over 25%) I would expect a sharper sell-off in Treasuries as traders reallocate funds. This isn't happening, adding further questions to the validity of the rally.
3.) The economic fundamentals are still extremely questionable. Despite the "green shoots are appearing" language we've heard, the fundamental picture is still murky at best.
