TLT – Weekly Analysis

TLT is approaching one of the most important macro tests of the year. After months of pressure from structurally firm yields, the long-bond ETF remains caught between a possible relief rally and the risk of another decisive breakdown if rates continue to push higher.

In this update, we analyze TLT through technical signals to determine whether the recent setup points to a tradable rebound, a continued bear trend, or a larger warning for equities, currencies, and the broader economy.

CANDLES

TLT made three attempts to countertrend on the weekly frame. All three failed, and the odds now favor bears on the short- and mid-term frames.

The monthly close in May was neutral, but considering the broader technical backdrop, the trend remains bearish.

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 still likely to remain limited unless the larger structure improves.

Elliott Wave

Short Term – Flag

TLT made a new long-term low below the 2025 low, landing squarely in the target area we outlined in December. The larger blue ABC structure remains on the table, but its probability has now been reduced.

With a new lower low recorded, the path lower has technically opened. The recent bounce was likely corrective, signaling better odds for another lower low.

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 bearish across the short- and mid-term frames after three failed weekly countertrend attempts. Although the May monthly close was neutral, the broader technical backdrop continues to favor bears, especially after the 2M and 4M frames printed bearish signals in April.

The recent bounce was likely corrective and reduces the probability of the larger blue ABC recovery structure.

With the new lower low recorded earlier in May, the path lower has technically opened. Any move higher is still likely to remain limited unless the larger structure improves, while the odds currently favor another lower low.