TLT – Weekly Analysis
This week, TLT precisely hit the $85 target we outlined at the beginning of December. The move delivered the expected milestone, but it also raises the next important question: is the bond market ready for a new challenge?
In this analysis, we review the latest signals, assess the evolving technical structure, and outline the most likely path forward for TLT.
CANDLES
After hitting the target, TLT bounced and even printed a weekly Piercing Line. However, the bullish odds remain weak, the candles are not very convincing, and weekly confirmation is still required.
From the larger perspective, we should remember that the 2M and 4M frames printed bearish signals in April. Even if TLT extends the current rally higher, the long-term bearish odds could resurface at any moment.
Overall, TLT continues to maintain bearish trends across the board. The mid-term outlook is neutral, while the long-term outlook remains bearish.
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 at $83.30, it would open the path toward the double-target level implied by the Head and 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 reached the $85 target and produced a bounce, but the recovery has not yet delivered strong bullish confirmation. The mid-term outlook is neutral for now, while the broader structure remains bearish, especially after the bearish 2M and 4M signals recorded in April.
The larger downside setup remains active. A break below the 2025 low at $83.30 would open the path toward the next major downside target implied by the flag and Head and Shoulders structures. Overall, TLT may attempt a short-term rebound, but the larger bearish risks remain intact.
