TLT – Weekly Analysis

CANDLES

Today, I sensed something unusual—hard to explain, but definitely unsettling—so I decided to monitor all major closures I usually track on weekdays. Three events stood out as highly unusual: a sharp move higher in Volatility futures, a powerful impulsive wave down in Nasdaq futures, and an afterhours drop of nearly a dollar ($0.92) in TLT, which is very atypical.

This move only appeared on certain hourly charts with afterhours data enabled.

From a technical perspective, this shift has a major impact on the candles. I’ve marked the adjusted closure levels on the charts above. With the afterhours included, the daily transforms into a strong Bearish Engulfing, the 3-day becomes a bearish continuation, and the weekly confirms a reversal. The candles were already leaning bearish, but with these adjustments, the bearish strength is now much more pronounced.

I’ll continue to monitor this closely. If I notice any updates or changes to the final candle prints—since adjustments do sometimes happen—I’ll post an update.

As TLT recorded an extremely rare and impactful technical event on the monthly frame, I will keep the following piece discussed in the November 2024 monthly report for a reference:

The monthly frame, despite closing with a green candle, is currently viewed as a bearish continuation candle. This interpretation is supported by several technical indicators, most notably the freshly recorded 50/200 monthly bearish cross—a massive and concerning development.

Since I could not find a very long-term dataset for US20Y or US20, I extrapolated the event using the inverted US10Y dataset, which closely mirrors US20Y and has data extending back to 1913. As shown in the chart below, a similar sequence of 50/100, 50/200, and 100/200 MMA bearish crosses occurred in the early 1950s. That sequence is now repeating. Most likely, the 100/200 MMA cross will be recorded in early December (it was).

Adding to the concern, the first wave off the top (on the inverted scale) was strongly impulsive. The key question now revolves around the length and duration of wave 2/B before the next major move down. Will it stretch over another year or two, or has a sharp zigzag already completed? The upcoming annual closure will likely provide significant answers.

ELLIOTT WAVES

Mid Term

Micro

TLT continued to develop an impulsive wave down. If this structure unfolds as expected, the ETF is likely to test new lower lows in the near term.

SUMMARY

After forming a short-term top and closing April with clear bearish signals, TLT has continued to build downward momentum, increasing the likelihood of a continued decline.

From an Elliott Wave perspective, the ongoing move down appears impulsive, suggesting that TLT may be in the early stages of wave iii of some degree. This structure typically aligns with strong, extended moves and raises the probability of new lower lows in the near term.

An unusual afterhours drop of nearly $0.92 on Friday—visible only on charts with extended trading data—significantly impacted the technical picture. It turned the daily candle into a Bearish Engulfing, reinforced the 3-day as a bearish continuation, and confirmed a reversal on the weekly. Already bearish candles now appear much stronger.

At this point, TLT remains bearish across all major time frames. Unless a clear and confirmed reversal signal emerges, the technical outlook supports a continued move lower.

Happy Trading!