TLT – Weekly Analysis
TLT has survived the key test so far. 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 is likely forming a bottom. The 2D and weekly frames closed Friday with bullish Inside Up combos—the weekly by just 1 bp. Another notable development is the failure to form a top on the 10D frame. If TLT holds this initial momentum and confirms it next week, the ETF will have a chance to close November with bullish signals.
Overall short/mid-term odds: neutral–bullish, pending confirmation.
Elliott Wave
Mid Term
No changes in the mid term view.
Short Term
The green count remains primary. If TLT holds above $88.44, wave 5 would be next; 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
So far, TLT has managed to avoid the bearish traps we discussed last time. If it shows bullish momentum and holds above $88.44, we can reasonably expect a rally for wave 5, which would align with expectations for the FED moves.
Short/mid term: neutral-bullish, pending confirmation
Long term: moderately bullish
Happy Trading!
