TLT – Monthly Analysis
TLT is still tracking the path we outlined back in early December—and the structure remains intact.
With March now behind us, the focus shifts to what comes next. Is this trend set to continue, or are we approaching a key inflection point?
This analysis breaks down the signals and the most likely path forward.
CANDLES
TLT’s monthly and quarterly signals have once again reinforced the bullish stance in bond yields outlined in our bond market analysis. Both frames printed clear bearish continuation, with the monthly now approaching a rare 100/200-month MA “death” cross—last seen in the 1950s. The long-term outlook remains increasingly bearish.
Tactically, the daily and weekly closures from the first week of April suggest a potential bounce. However, given the broader technical backdrop, any upside is likely to be limited.
As outlined in early December, TLT completed a Head & Shoulders formation, which remains active and has now reached its minimum target zone. At this stage, a move toward a double distance cannot be ruled out.
Overall, TLT is bullish-neutral in the short term and remains bearish in the long term.
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.
There is also a possibility that the flag is part of a much larger triangle that is still developing. We will review this scenario in more detail in the long-term outlook in next week’s monthly report.
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 remains firmly bearish on the larger timeframes, with monthly and quarterly signals confirming continued downside and aligning with the broader rise in yields. The approach toward a rare 100/200-month MA death cross further reinforces the long-term bearish outlook.
In the short term, there is potential for a limited bounce, but the broader structure remains intact. With the Head & Shoulders pattern already reaching its minimum target, the risk of an extended move lower remains on the table.
Overall, TLT is neutral to slightly bullish in the short term, but decisively bearish in the long term.
