Long Bonds: Right Triangle Reversal Pattern Suggests More Declines in the Offing
Tim Knight | Aug 31, 2023 04:41AM ET
Even though it’s hard for me to imagine some kind of “shock event” from the pre-open jobs report this Friday, I look forward to seeing how the market – – particularly the bond market – – reacts.
The reason is that in spite of the recent rally, the bond market (represented below by way of iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT)) is still sporting a very good right triangle reversal pattern, and provided we stay beneath that horizontal line, it has a very good chance of more serious diminishment in price.
Looking at this upside-down, by way of the ProShares UltraShort 20+ Year Treasury (NYSE:TBT) (which is the ultra-short ETF for bonds), we can see the very bullish pattern (which, being inverted, means a bearish pattern for bonds) shaping up.
I’ve drawn a supporting horizontal line here to illustrate what I believe is key support for TBT, which is a good proxy for what interest rates are doing.
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