U.S. Treasurys And Gold: Odd Couple In Relative Correlation
David Tablish | Jan 25, 2017 12:54AM ET
Lets start by looking at a weekly chart for iShares 20+ Year Treasury Bond Fund (NASDAQ:TLT), the 20 year bond ETF, which shows it built out a H&S top last summer. That H&S top is a reversal pattern that showed up at the end of its bull market which has been going on for many years.
There is a big brown shaded support and resistance zone that has been offering support.
This next chart is a 15-year monthly look at the TLT which shows it has built out a four year, 5-point bearish rising wedge which broke to the downside in November of last year. If there is a backtest it would come in around the 129.75 area.
Direxion Daily 20+ Year Treasury Bear 3X Shares Fund (NYSE:TMV) is a 3 X short of the TLT.
This last chart is a combo chart which has the TLT on top and SPDR Gold Shares (NYSE:GLD) on the bottom. It’s not a perfect correlation by any means, but these two have been moving together pretty consistently over the last year or so.
GLD is currently backtesting its neckline and a support and resistance line going back a year and a half or so. If GLD can trade back above the neckline and the S&R line, the bulls will be talking to us. To say this is a critical area for GLD is an understatement. Definitely an area to keep a close eye on.
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