This Bond Uptrend Looks Vulnerable

[Trading With Larry Benedict]( This Bond Uptrend Looks Vulnerable By Larry Benedict, editor, Trading With Larry Benedict We’ve seen a huge turnaround for the iShares 20 Plus Year Treasury Bond ETF (TLT) over the last month and a half. TLT invests in long-term U.S. Treasury bonds. When we checked on it [in late October]( (red arrow in the chart below), the ETF had dropped around 20% since May. And it was down around 54% from its March 2020 high. The Fed’s assertion that interest rates would have to stay “higher for longer” led to TLT’s strong selling. But despite the Fed’s narrative, a chart pattern showed TLT was setting itself up for a potential bounce. That up move has now played out. So let’s see what’s coming next… Recommended Link [LIVE DEMO: Watch Elon Musk’s AI go 65 miles per hour]( [image]( "I don’t talk about it much, but I make AI make me money. Most “experts” have no idea how AI really works. 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After crossing beneath the 50-day MA, the 10-day MA also tracked down. TLT saw a couple of small counter-rallies in June and July (where the 10-day MA came close to crossing back the other way). But ultimately, the 10-day MA remained below the 50-day MA throughout TLT’s fall. This downtrend corresponded with the RSI bearishly tracking in its lower band. Yet when we checked out TLT on October 25, we saw a developing converging pattern (orange lines). We know that can often lead to a reversal. Take another look: iShares 20 Plus Year Treasury Bond ETF (TLT) [chart] Source: e-Signal When the RSI starts rallying like this (lower orange line), it shows increasing buying momentum. This makes it difficult for a stock to continue to fall (upper orange line). The sustained momentum eventually pushes the stock higher. And this is how things played out here… Since bottoming out on October 23, TLT rallied just over 16%. The steep angle of the 10-day MA crossing above the 50-day MA shows the strength of that rally. This also coincided with the RSI breaking back into its upper range. But recently the RSI touched overbought territory (upper grey dashed line). So what can we expect from here? Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. No Rate Cuts Soon Despite its recent up move (and the much-touted wider rally in bonds), TLT is only trading back where it was in mid-August. So this was a decent-sized move in a short period. But we’re not ready to call this a longer-term uptrend in bonds quite yet. In the meantime, I believe we won’t see any rate cuts until the second half of next year. So with TLT touching overbought levels, it could be vulnerable to a pullback… Even if it’s just a brief one. The RSI retracing toward support could see TLT trading back around $92. Regards, Larry Benedict Editor, Trading With Larry Benedict Mailbag Do you see rate cuts on the horizon as we head into 2024? Send us your thoughts at feedback@opportunistictrader.com. IN CASE YOU MISSED IT… [Move Your Money TODAY]( Below is a chart of the unprecedented money printing by the U.S. Government. Its causes are many, including a rocky stock market… some out of control inflation… layoffs that are always devastating… and more. If this causes you concern… You are not alone. [>> Wait until you see what’s NEXT for the stock market.]( Today, millionaire Jeff Clark (who predicted the crashes of 2008/2020/2022) is going live to issue his NEXT warning. [Click Here to Watch.]( [image]( [The Opportunistic Trader]( The Opportunistic Trader 55 NE 5th Avenue, Delray Beach, FL 33483 [www.opportunistictrader.com]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. 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