TLT Is the Most Important Chart To Watch This Week.
This month is an incredibly crucial week for TLT and can be a telling signal about the overall market.
Fundamental Analysis:
TLT is approaching the highs it made in August 2019. If TLT is considered a proxy for "risk-off" behavior. Do you think our economic landscape is as, "risk-off" as it was in August 2019?
Short Duration Treasury Bills are approaching negative yields. At Treasury Notes/Bill Auctions, more and more primary dealers are bidding 0%. Long Term Rates will always follow short term rate. Low Short Term Treasury Yields signify that dealers are willing it buy these assets at expensive prices, the buyers don't care about the yield. When Short Term Yields go negative which is very possible, this will cause a domino effect that will cause a major decline in the longer duration bond yields. Primary dealers will bid lower yields on longer-term bonds because it will be a cheaper alternative than buying short-term bills with at zero or negative yields. I guess the main question to ask yourself is: Why are Short Term Yields plastered to zero? If the stock market enters into a "Super Bubble" phase I would expect TLT to fall been lower to 130. But I am mostly convinced that this is a bottom in TLT.
Technical Analysis
1. Bullish Consildation
2. Declining Volume
3. Near 0.5 retracement area
4. Selling Volume Exhausted
5. Bullish RSI Divergence
6. Possible ABCD harmonic
7. Support at 145
8. Has touched bottom of Bollinger Band. (Not Shown) *Use any Mean Reversion TA tool it will show you this is oversold on Daily timeframe.
9. Cyclic RSI shows price is at a very low level relative to past prices.
Fundamental Analysis:
TLT is approaching the highs it made in August 2019. If TLT is considered a proxy for "risk-off" behavior. Do you think our economic landscape is as, "risk-off" as it was in August 2019?
Short Duration Treasury Bills are approaching negative yields. At Treasury Notes/Bill Auctions, more and more primary dealers are bidding 0%. Long Term Rates will always follow short term rate. Low Short Term Treasury Yields signify that dealers are willing it buy these assets at expensive prices, the buyers don't care about the yield. When Short Term Yields go negative which is very possible, this will cause a domino effect that will cause a major decline in the longer duration bond yields. Primary dealers will bid lower yields on longer-term bonds because it will be a cheaper alternative than buying short-term bills with at zero or negative yields. I guess the main question to ask yourself is: Why are Short Term Yields plastered to zero? If the stock market enters into a "Super Bubble" phase I would expect TLT to fall been lower to 130. But I am mostly convinced that this is a bottom in TLT.
Technical Analysis
1. Bullish Consildation
2. Declining Volume
3. Near 0.5 retracement area
4. Selling Volume Exhausted
5. Bullish RSI Divergence
6. Possible ABCD harmonic
7. Support at 145
8. Has touched bottom of Bollinger Band. (Not Shown) *Use any Mean Reversion TA tool it will show you this is oversold on Daily timeframe.
9. Cyclic RSI shows price is at a very low level relative to past prices.
Comment:
bear target of 130 is on track
