TLT – Weekly Analysis
Well, as predicted, TLT is moving lower again, reinforcing the bearish path we have been tracking. But the latest signals also introduce an important caveat.
In this analysis, we review the evolving technical structure, assess whether the decline is becoming stretched enough for a rebound, and outline the most likely path forward for TLT as the bond market continues to pressure long-duration assets.
CANDLES
During this week, TLT formed several mid- and long-term bearish continuation signals, further reinforcing the broader bearish odds. However, the daily frame moved out of bounds and became strongly oversold, raising the risk of a bounce early next week, with some chance of developing into a mid-term rebound.
From the larger perspective, we should remember that the 2M and 4M frames printed bearish signals in April. This suggests that any move higher is likely to remain limited.
Overall, TLT continues to maintain bearish trends across the board. The short-term outlook is neutral, leaning bullish, while the long-term outlook remains bearish.
Elliott Wave
Short Term – Flag
A major development has emerged for TLT in the Elliott Wave and classical pattern structure. The ETF has now minimally reached the target area implied by the flag we outlined in December.
The next move will be critically important. If TLT holds the 2025 low at $83.30 and forms an impulsive wave higher, it would open the door to a larger corrective ABC flat in blue. In that scenario, wave C could unfold through the remainder of 2026 and potentially extend into part of 2027. If confirmed, the rally could deliver roughly 10% for investors.
A breakdown below $83.30, however, would likely keep the ETF under pressure and open the path for further downside. The next few weeks may prove decisive, with particular focus on the monthly close.
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 structurally bearish, but it has now reached an important downside target and may be approaching a tactical inflection point. Oversold conditions and the completion of the prior flag objective raise the odds of a rebound.
The key question is whether TLT can hold the 2025 low at $83.30 and produce a clean impulsive recovery. If so, a broader corrective rally could emerge; if not, the larger bearish trend is likely to resume.
