TLT – Weekly Review
This report analyzes TLT’s recent signals and outlook from multiple technical angles. We review candlestick structure, momentum shifts, and Elliott Wave setups to assess the short-term picture and highlight the key risks and opportunities that could shape the long-term view.
CANDLES
TLT ended the week with mixed signals. While it fell over the last three days following the rate decision, the daily decline lacks strong technical backing. The weekly closed with a Bearish Engulfing, yet price remains above multiple support lines and will need a powerful confirmation to prove the intent.
A key 15D close arrives Monday. So far, it’s shaping as a Bullish Engulfing with solid supporting technicals. Barring a large drop on Monday, the close should be bullish and will likely improve the odds for a constructive monthly close on September 30, which is also shaping bullish.
From the September 12 analysis: “If momentum holds through month-end, and, crucially, the Fed convinces markets of future cuts, the monthly could print a Bullish Engulfing—much like November 2023—setting up an extended rally for at least a month, possibly longer, and this time with stronger technical backing.”
In the broader view, TLT will likely remain bearish on the quarterly and higher frames at September’s close unless it rallies about 10% in the remaining days, which seems unlikely.
Elliott Wave
(no change, just a refreshed chart)
TLT failed again to form an impulse in either direction, leaving the short-term view exceptionally complex with too many viable paths. The mid-term read is also unfavorable: since the October 2023 low, TLT hasn’t produced an impulsive or diagonal advance, implying a lower low is needed to reset the structure. At this stage, I’m considering a very large wave-4 flat, with its final wave (c) unfolding as an ending diagonal, though multiple confirmations are still required.
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.
SUMMARY
TLT has a solid chance for an extended bounce off the bottom—potentially a month or longer—but the move will likely be capped, as the quarterly and larger frames remain bearish.
Given the short-term uncertainty, it’s better to wait for the monthly close, which will provide firmer guidance for the next month or beyond.
Happy Trading!
