Earnings Plays Are Thinning Out
U.S. Treasury bears should actually like the current action. The iShares Barclays 20+ Year Treasury Bond Fund (TLT) is in the midst of a bearish head-and-shoulders pattern, but no pattern stands alone. In this case, I had a longstanding support level in the $121.50 area. Since the TLT is mirroring a futures product that trades almost around the clock, the support levels will be areas more than exact numbers. But TLT did halt its drop right in the area of support.
iShares Barclays 20+ Year Treasury Bond Fund (TLT) Source: StockCharts.com View Chart » View in New Window »Now we are witnessing an oversold bounce, which I feel is necessary if TLT is going to see further downside. The exact size of the bounce is hard to tell, since we have some equity influence here with the risk-on/risk-off trading we've seen for quite some time now. I believe the bounce though should be capped at $124. In fact, I like this area as a failing point for TLT. Consecutive closes above $124 or a single day push to $125 will prove my thesis wrong as TLT would be heading back into the right shoulder consolidation area after falling out of it....384 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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