by SIACharts.com
U.S. indices show a notable contrast between recent short-term strength and weaker year-to-date (YTD) performance. The NASDAQ Composite [NASD.I] gained +18.91% over the past month but remains down -2.27% YTD, which may suggest a strong rebound in growth or tech-related names that haven't fully recovered earlier declines. Similarly, the S&P 100 [OEX.I] rose +14.44% in the last month but is still negative YTD at -1.66%. These moves could indicate a recent surge in large-cap buying interest that has not yet reversed broader downward trends.
The Russell 2000 [RLS.I], which is down -8.68% YTD, continues to underperform, particularly when compared to the AMEX Composite [AMEX.I], which is up +10.07% YTD. This divergence might suggest varying investor sentiment or sector exposure between small-cap stocks and more commodity- or energy-linked equities. Canadian indices appear to be consistently positive across all timeframes, which may stand out in contrast with mixed U.S. performance.
The S&P/TSX Composite [TSX.I] and the S&P/TSX 60 [TX60.I] both show steady gains, while the TSX Venture Composite [JX.I] posted a strong +13.52% YTD return, along with a +3.04% weekly gain. This could suggest growing investor interest in early-stage or speculative Canadian equities. The S&P/TSX Canadian MidCap [TX40.I] and SmallCap [TX20.I] indices also posted solid YTD numbers, indicating that mid- and small-cap segments in Canada may be attracting more stable support than similar segments in the U.S.
These differences might reflect underlying sector composition, macroeconomic factors, or regional investor behavior. Volatility measures increased significantly over the past week, even as equity markets posted strong recent gains. The SPX Volatility Index [VIX.I] rose +12.08%, the DJIA Volatility Index [VXD.I] increased +13.01%, and the NASDAQ Volatility Index [VXN.I] gained +6.80%. These short-term spikes may suggest heightened uncertainty or increased hedging activity. At the same time, volatility levels over the past month are sharply down — for example, VIX is -38.29% over 1M — which could reflect a sharp change in market sentiment.
In fixed income, the yield data shows a divergence in short- and long-term rates that could suggest a steepening yield curve. The 5-Year Yield Index [FVX.I] fell -0.12% over the past week and is down -5.09% YTD, while the 30-Year [TYX.I] rose +2.48% for the week and +6.35% YTD. The 10-Year Yield [TNX.I] also increased by +1.50% in the past week. This pattern may point to shifting investor expectations about inflation, growth, or interest rate policy. The discrepancy between short-term and long-term movements might indicate caution in the near term alongside concern over longer-term economic risks or funding costs.
Spotlight on Long-Term Bonds: TLT and Yield Curve Pressure
This shift in interest rates is particularly evident in long-duration Treasury instruments. The iShares 20+ Year Treasury Bond ETF (TLT), which tracks long-term U.S. government bonds, has been under pressure amid rising long-end yields. As of May 22, 2025, TLT is trading at $83.61, reflecting a 1-month return of -2.05% and a 3-month return of -2.49%. These results highlight the ETF’s sensitivity to yield curve shifts, especially at the long end, where 30-year Treasury yields have recently climbed above 5% — levels not seen in over a decade.This move in yields could reflect concerns around sticky inflation, persistent fiscal deficits, and evolving supply-demand dynamics in the bond market. Elevated long-term rates may signal that markets expect inflation to remain above the Federal Reserve’s target longer than previously anticipated, which could keep pressure on long-duration assets. TLT’s recent performance may be a reflection of how quickly markets are adjusting to these expectations.Turning to the attached point and figure (p&f) chart, TLT appears to be in a negatively trending setup, showing weak relative strength when compared across multiple asset classes. In the clipping provided, TLT is listed as a constituent in several SIA reports, where it consistently ranks in the bottom, or "unfavored," zone—levels typically avoided by SIA practitioners. This positioning is further supported by a low SMAX score of 1 out of 10, which may reflect weak short-term momentum relative to a broad range of alternative asset classes. The p&f chart identifies key resistance levels at the 3-box reversal point of $90.97, the psychological level of $100.44, and the declining trend line near $106.59. Support appears near current levels at $82.40 and lower at $76.12.
Alternative Rate Hedging: PFIX and Inflation-Sensitive Strategies
As long-term yields remain elevated, some strategies are designed to respond differently than traditional long-duration bond funds. The Simplify Interest Rate Hedge ETF (PFIX) is one such example. PFIX is an actively managed fund that may offer a hedge against rising long-term interest rates and periods of elevated fixed income volatility. It employs long-dated interest rate options — including swaptions and Treasury futures — which could provide convex exposure to rate movements, with an effective duration of approximately 35 years.Recent performance data shows PFIX gained 9.95% over the past month, 27.09% over three months, and 38.40% over the past year. It is up 21.78% year-to-date, with a current yield of 2.85%. These returns may reflect its responsiveness to market conditions characterized by rate volatility and inflation pressure. While not a traditional inflation-protected bond, PFIX could act as an indirect inflation hedge, especially as rising interest rates often accompany higher inflation expectations. Its structure may position it to respond differently than conventional fixed income assets in challenging rate environments.In contrast to the TLT chart, the attached point and figure chart for PFIX presents a positively trending setup, suggesting the fund’s design—particularly its use of swaptions—may be functioning effectively. The chart displays a bullish point and figure catapult pattern, defined by a triple top breakout followed by a subsequent double top. This pattern graphically illustrates the strength of the breakout and may indicate supportive money flows favoring buyers. Based on prior consolidation levels, SIA analysis can extrapolate potential resistance targets at $72.94, and possibly as high as $82.14, using both vertical and horizontal p&f counting methodologies. Notably, PFIX holds a SMAX score of 9 out of 10, the inverse of TLT’s 1 out of 10, suggesting strong short-term relative strength when compared against multiple alternative asset classes.
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