TLT – Weekly Analysis
TLT is approaching a key test on Tuesday. Let’s outline the pass/fail criteria and the implications. In this update, we review candlestick formations, technical indicators, and Elliott Wave structures—mapping risk levels, key setups, and what bond traders should watch as momentum and trend shape November’s path.
CANDLES
TLT closed Friday’s daily and weekly sessions with inconclusive candles that could resolve either way. The notable concern is the loss of the 50-DMA on the daily and the 8-EMA on the weekly. Tuesday, November 11 is shaping up as a pivotal day for mid-term momentum, which has been increasingly bearish. A close of the current 8D candle below $89.01 would confirm a mid-term top and open a path lower; hold that level, and another bullish rally is on the table.
Overall short/mid-term odds: moderately bearish.
Elliott Wave
Mid Term
No changes in the mid term view.
Short Term
The green count remains primary. TLT has possibly completed wave 3, and the next level to watch is $88.44 — a break below that level would invalidate the entire 1–5 impulse in green.
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 continued the pullback we anticipated two weeks ago. Now it faces a critical test on Tuesday to ensure the pullback ends and a foundation is built for the next leg higher. It will be interesting to see how TLT avoids breaking below $88.44 while also holding above $89.01 on November 11. A few finely tuned moves will be needed to avoid the traps. For now, TLT remains moderately bearish in the short/mid term, but this could change on Tuesday.
Short/mid term: moderately bearish
Long term: moderately bullish
Happy Trading!
