TLT – Quarterly Review
This report examines the recent movements in TLT, with a special focus on the latest monthly and quarterly closures and what they signal for the path ahead. Using a multi-layered approach—candlestick patterns, momentum indicators, and Elliott Wave analysis—we assess the structure across multiple time frames to gauge both short-term potential and long-term risk.
CANDLES
TLT ended June much as expected. The quarter closed with a bearish continuation candle, reinforcing the broader downtrend. Meanwhile, the monthly chart printed a bullish Piercing Line but did not shift the trend—it still needs a very strong confirmation to change the picture meaningfully. On the shorter frames, both the daily and weekly remain bearish, pointing to better odds for lower prices in the week ahead and possibly beyond.
Overall, the broader outlook continues to favor the bearish scenario, with all long-term trends still aligned to the downside.
Classical Pattern – Flag
TLT possibly completed an ending diagonal for the final wave of the flag. The pattern remains intact.
Technical Event (Historical)
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
Very Long Term
No changes to the long term outlook.
Mid Term
The mid-term outlook also remains unchanged.
SUMMARY
TLT’s important closure on June 30 confirmed that all larger frames remain aligned for a long-term decline. The quarterly candle formed a clear bearish continuation pattern, underscoring this broader downside bias. However, the monthly frame closed with a bullish Piercing Line, hinting that there may be a near-term battle between bulls and bears. This could lead to rangebound or choppy price action over the next few months as the market digests these signals before the dominant long-term trend reasserts itself.
The technicals on the largest frames continue to support the case for a sustained decline, and both the long- and short-term Elliott Wave structures also point to better probabilities for a gradual move lower. Unless we see a strong and sustained reversal signal on the weekly or larger time frames, the bigger picture remains bearish.
Happy Trading!
