Yesterday I published a VERY CHART FOR-TLT. I explained the WHAT (TLT-to rise).
This article will try to explain the WHY.
The CBOE-10 year Treasury Note Yield (above chart) is LOCKED IN A STRONG DOWN-TREND.
This has an INVERSE relationship for price action in-TLT.
As a former quality engineer I would explain it like this:
If you eat too much food (CAUSE) you will gain weight (EFFECT).
If interest rates are falling (CAUSE), then-TLT will rise (EFFECT). These two things have an INVERSE relationship.
For those of you who read my contributions, I have recommended real estate-TLT-Gold-and other Metals.
As interest rates keep falling just ask yourself "What asset classes directly benefit from falling rates?"
Or, in other words, if falling rates are the CAUSE, then-TLT rising is the EFFECT because-TLT is the INVERSE of lower rates.
After you look at the above chart, please take the time to review Part 2 of-TLT vs the 10 year yield.
Part 2 is the chart of-TLT. You will see my examples as to the CAUSE, EFFECT, and the INVERSE relationship of falling rates vs-TLT.
You will see that the trend-line channel for-TLT is not down, as you see on this chart. It is the exact opposite, or INVERSE.
Now ask yourself the question "Do falling US rates have the possibility to affect my trades?"
Good luck to you. Don.