Treasury Selloff Part Deux

The 20+ year bond ETF ($TLT) hit a new ~8 month low today, touching prices it had not seen since last May 10, 2012. Does this mark the end of the great bond bull market? Well, who knows, especially given all the uncertainties coming up (AGAIN), and all the possible downsides to the economy (tax increases, spending cuts, global growth problems, etc).

But the point o this post  isn’t to make a fundamental $MACRO argument. I’m here to show you a technical pattern that is repeating (thus the “Part Deux”) that you should keep an eye out for.

The Chart

$TLT - iShares Barclays 20+ Year Treas Bond 

As you see, after a massive rally in mid-2011, treasuries spent a long time consolidating in this descending triangle pattern. Just as it looked like it was about to sell off even more, we rallied to new highs.

And since hitting a new high a couple of months back, $TLT has been in a consolidation range, similar to late-2011 through mid 2012. And in the similar descending triangle pattern right to support (the green line). While this week’s weekly candle has yet to finish, if it closes above support (will depend A lot on Friday’s NFP number and how the market reacts to it), we could see a similar rally like we saw in mid-2012. So keep an eye on it.

20+ year Bond ETF weekly chart

20+ year Bond ETF weekly chart

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tags: $TLT $TBT $IEF $ZN_F $ZB_F $BONDS

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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