The Enigma Of Treasuries

US Treasuries, as measured by the ETF (TLT), have been stealing fortunes for the last several months. Just when you think that the US stock market is going higher they rally higher. And then when Europe is ready to collapse they reverse and fall. Enigma. What are the charts saying about Treasuries now? Let’s take a look.

iShares Barclays 20+ Year Treasury Bond Fund, ETF, Daily

The daily chart above shows a clear trend lower over the last 3 weeks. The shorter Simple Moving Averages (SMA) are rolling lower with a Relative Strength Index (RSI) that is technically over sold but trending lower and a Moving Average Convergence Divergence indicator (MACD) that is negative and growing more so. With the Bollinger bands opening lower this is just ugly on the daily time frame. Even the volume is picking up on the move lower. The gap at 119 and 117.50 support lower seem likely and maybe even 115.10 and 113.65.

iShares Barclays 20+ Year Treasury Bond Fund, ETF, Weekly


The weekly picture shows the gap coming up and the second gap lower at 112.45. Below that 110 and 107.5 are the next big levels. Under 107.50 looks really ugly with major support next at 99. With the RSI moving lower and crossing the mid line and the MACD crossed negative, these figures seem very plausible. No good news so far. But the monthly view give a ray of hope. Nearing support at 120, it is likely a hold there will create a positive RSI reversal, with a lower low in RSI but a higher low in price, leading to a bullish price target of 143.50.

iShares Barclays 20+ Year Treasury Bond Fund, ETF, Monthly

In fact as long as it bottoms before 108.46 this will remain bullish. Under that, well you know. Finally, three box reversal Point and Figure chart carries a price objective of 172. Ah, wait a sec. That is very bullish. But in fact that will also stand until the price breaks down below 108. So a bullish view long term with a bearish view short-term. The enigma continues.

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