US Treasuries have been chugging along as stocks flirt with all-time highs. And now with stocks pulling back slightly Treasuries are continuing higher. Lets set aside the fairy tale that stocks and bonds cannot move higher together as that was debunked last week. Instead let’s focus on bonds themselves.
The chart below shows that Bonds, as measured with the US Tresaury ETF, iShares 20+ Year Treasury Bond (NYSE:TLT), are showing many reasons to look for more upside. First notice the break of the descending triangle last week. This gives a target of 138.75. That in itself would make for an all-time high, above the January 2015 high at 138.50. But the move Monday, over the February 11 high, sets a Cup and Handle target to 155.
The momentum indicators support more upside as well. The RSI is in the bullish zone and rising. The MACD is also rising. The chart also sports a bullish Golden Cross. Finally after running in a tight range for some time, the Bollinger Bands® are also opening to the upside to allow price to rise. The next big hurdle is the 138.50 level and then the sky is the limit.
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