With hidden daily bullish divergence at this support level we SHOULD see some buying start to happen. If not, the channel will break and it will look like they want to test the lows. This week's closing candle is very important. Under 111 will look ugly on a daily close, under 110 even worse.
From a purely technical standpoint you're absolutely right that the breakdown would look ugly. However, TLT actually cannot fall much below 108/109 right now. That's because smart money will not let this treasuries ETF fall below the price where its yield reaches the Fed Funds terminal yield. The earliest that TLT is likely to break below 108 and sustain price down is in mid-September when the futures move to a new front month and reprice the Fed Funds terminal yield. If you look at my recent post, you'll see that the es2!-es1! futures are hinting that the Fed will need to hike to 6%...
@Faux_Pas, Love this comment, but it's not odd at all! This is what always happens right before a recession, in the late cycle.
However, there is definitely something odd right now and that is the extreme rates of change in bond yields. This has left some bond prices falling to 3, 4, even 5 standard deviations below their mean. This likely reflects that we've entered a new Supercycle. One in which limitless monetary easing is a thing of the past. Unfortunately, though, stocks and risk assets are going to struggle for years to come, with growth/tech and interest-sensitive companies doing the worst.