Treasuries Still Look Horrible

US Treasuries are still in the dumps. As I noted a little over a month ago, US Treasuries were setup for a massive sell-off. Despite being down about 7% from that date, nothing on the chart tell’s me they are ready to possibly bottom or even reverse. In fact, the trend still remains, and US Treasuries are likely to head lower for the time being. Having said that, as I noted last week, this “Selloff” in terms of a bigger picture is nothing abnormal. However, that does not mean treasuries are a buy!

The Chart

Below is a daily chart of  iShares Barclays 20+ Year Treasury Bond ETF (the most followed and traded Bond ETF around). The weekly head and shoulders chart is playing out like I thought. We sold off all the way to the potential support of ~106.50 and now are bouncing slightly off of it. However, the trend still looks down and nothing is telling me this baby is ready for a reversal. The next major support is the the high high 80s, however, I would be very surprised if it got there (even though the chart says it could!). If we do rollover more, which is not a guarantee of course, I could see it stabilizing at around ~99.

What I am watching now is for a break of the lows OR a break of the down trendline for a reversal. Something not working in the favor for the TLT bulls here is the fact that the RSI is now not oversold anymore. This means if we roll-over, we could see some more hard selling for a while longer.

$TLT Daily Chart

TLT daily



The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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