TLT – Monthly Analysis
TLT ended 2025 with several decisive signals, and January is now in the rearview mirror. In this monthly update, we examine the follow-through through the lenses of key candlestick formations, technical indicators, and Elliott Wave structures to map risk levels, identify the dominant setups, and outline the highest-probability paths ahead.
CANDLES
TLT closed January just 3 bp below December, which is sufficient to treat the January candle as a bearish-leaning doji. The weekly and daily closures on January 30 were also bearish.
In early January, TLT recorded a 50/100 DMA bearish cross. If momentum does not shift, the stronger 50/200 DMA bearish cross is likely to come into play in February.
As outlined at the beginning of December, TLT completed a Head & Shoulders formation, and the downside targets derived from that structure remain intact and unchanged.
Elliott Wave
Short Term – Flag
There are no changes to the potential flag targets. If TLT makes a new lower low, below the 2025 low, it would open the path toward the double-target level implied by the Head & Shoulders structure.
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 moved both higher and lower in January but ultimately ended the month with bearish signals across the short-, mid-, and long-term frames, in line with our expectations.
Until a clear reversal signal emerges—either through candlestick confirmation or a meaningful shift in technical momentum—TLT remains predominantly bearish.
Happy Trading!
