It's finally here... After four challenging years, TLT is making a strong return.
The key resistance level to watch is $100.00 or 50 EMA which can act as support or resistance.
If we can break through this barrier, there's a strong possibility of reaching all-time highs within the next 12 months. This potential is fueled by expected interest rate cuts, which could significantly benefit TLT.
First, rate cuts would likely increase bond prices, boosting TLT's net asset value. Second, lower future yield expectations could drive investors to seek the stability and income that long-term bonds offer, further increasing demand. Finally, in times of economic uncertainty , investors often turn to long-term Treasuries as a safe haven, making TLT an attractive choice in a low-rate environment.
TLT trade ideas
TLT Daily Falling Wedge Just FormedFalling Wedge
When a security's price has been falling over time, a wedge pattern can occur just as the trend makes its final downward move. The trend lines drawn above the highs and below the lows on the price chart pattern can converge as the price slide loses momentum and buyers step in to slow the rate of decline. Before the lines converge, the price may breakout above the upper trend line.
When the price breaks the upper trend line, the security is expected to reverse and trend higher. Traders identifying bullish reversal signals would want to look for trades that benefit from the security’s rise in price.
NFA. Trade at your own risk.
Golden cross 50/200 EMA
The golden cross occurs when a short-term moving average crosses over a major long-term moving average to the upside. This happens when the short-term average trends up faster than the long-term average until they cross.
This is interpreted by analysts and traders as signaling a definitive upward turn in a market.
There are three stages to a golden cross:
A downtrend that eventually ends as selling is depleted. A second stage where the shorter moving average crosses up through the longer moving average. Finally, the continuing uptrend, hopefully leading to higher prices.
TLT bullish and safe near term and long term TLT bullish and safe near term and long term
This is what I found in most bullish and bearish retracements , once you get 100% retracement of up or down move then next level is normally 1.618. If it retrace up to 50% after 100% then it's even more bullish, if it goes under 50% after 100% then it's super bearish. Have fun finding 50-100% fib retracements.
Clean Break To The UpsideFalling Wedge Pattern
Success rate : Falling wedge statistics - In 82% of cases, the exit is bullish. - In 55% of cases, a falling wedge is a reversal pattern. - In 63% of cases, the pattern's price objective is achieved when the resistance line is broken.
Why should you buy into bonds after a rate cut?
HERE ARE 5 REASONS...
When a central bank cuts interest rates, bonds can become more attractive for several reasons:
1: Bond Prices Tend to Rise: When interest rates fall, the yield on new bonds is lower, making existing bonds with higher yields more attractive. As a result, the price of existing bonds rises, which benefits those who already own them or buy in anticipation of further price increases.
2: Fixed Returns Become More Attractive: After a rate cut, returns from savings accounts and other short-term investments decline. Bonds, offering a fixed rate of return, become more appealing, especially for income-focused investors looking for stability in a low-rate environment.
3: Lower Future Borrowing Costs: A rate cut often signals that borrowing costs will stay low, benefiting businesses and governments that issue bonds. This may lead to more bond issuances, and investors can capitalize on buying bonds before yields drop further.
4: Hedge Against Economic Uncertainty: Rate cuts often occur during economic slowdowns or periods of uncertainty. Bonds, particularly government or high-quality corporate bonds, are seen as safer investments compared to stocks, making them attractive for risk-averse investors.
5: Capital Gains Potential: As bond prices increase with falling rates, there is an opportunity for capital gains. Investors can potentially sell bonds at a higher price than they were purchased for, profiting from the price appreciation.
In short, buying bonds after a rate cut can offer both income stability and the potential for price gains, especially in a low-interest-rate environment.
Long term yields are going UPThe price is above the cloud on the weekly timeframe and is currently testing the 100MA. Despite the huge speculative trading around this particular ticker, the trend seems to be heading toward a full reversal.
The driving force behind this shift is macroeconomics: the anticipated rate cuts, which are expected to lower short-term bond prices while supporting the long-term ones.
TLT $140 by April 17th 2025TLT is on a path that will not be stopped, realizing $140 by April 17th 2025.
Unemployment is rising, Consumer Prices are falling, Sahm Rule has been triggered, Yield Curve has disinverted, Crude Oil is crashing, VIX is spiking, among many other indicators which signal market turmoil ahead.
Soon everyone will say they knew bonds were going higher, they will talk about how obvious it was to them.
US Jobs Disappoint - Inflation on DeckThe "September Effect" is in full bloom as the markets are down 4-5% from September's first trading week.
10 year average for September is -.9%
70 year average for September is -.7%
We may see high volatility all over again with Aug 5 lows being threatened, or we may see the risk off tone has been front loaded and next week is all about inflation with US CPI/PPI to potentially fend off more selling with improvements in the inflation trends (e.g. lower inflation = better for market sentiment).
This video is a bit longer, but I appreciate you checking it out and watching. Once we're through inflation news, it's all about the FED on Sep 18, then more employment/inflation news, then election. Those are major catalysts to posture us for the remainder of the year.
Long-term investors the game is simple
Short-term investors are all over the place
Profits and Losses happen, just don't do anything silly.
Enjoy the weekend!!!
Market Update - 9/7/2024• no setups, screener results are the worst I've seen in a while, breadth is worsening
• weak employment data, yield curve uninversion was driving a lot of the move down
• might have a rebound or a calm week next week, but generally, I see more downside ahead
• I'm mostly short, not looking to enter long until markets stabilize
TLT + Rate CutsTLT bullish trend into 100 resistance with major Fed decisions coming in the next weeks/months. Has a gap to fill on the way to highest pt
Pts are 98.30, 98.70, and 100+
- Shifted narrative from inflation to labor market
- Data suggests Fed is very behind the curve
- Jackson Hole
- FOMC
Short term price action on TLTShort term price action has formed a descending wedge pattern that is attractive when it breaks. Keep your eyes on this and FOLLOW YOUR STRATEGY.
Economic Uncertainty and Market Volatility: Recent economic data and geopolitical tensions have introduced significant uncertainty into the global markets. This uncertainty often drives investors toward safer assets, such as long-term government bonds. TLT, which tracks long-term U.S. Treasury bonds, stands to benefit from increased demand as investors seek stability.
Federal Reserve Policy: The Federal Reserve's current stance on interest rates plays a crucial role. If the Fed signals a pause or reduction in rate hikes due to concerns about economic slowdown or financial stability, long-term bond yields could decrease. Lower yields on new issues make existing bonds with higher coupons more attractive, thus boosting TLT’s value.
Inflationary Pressures: Persistent inflationary pressures may lead the Fed to adopt a more cautious approach. If inflation remains above the Fed’s target, the central bank might focus on avoiding aggressive rate hikes, which would help keep long-term yields low and benefit TLT.
Diminishing Bond Supply: As the U.S. government continues to manage its debt levels, the supply of long-term bonds could be constrained. A reduced supply of new long-term Treasury bonds could increase the value of existing bonds, including those held by TLT.
Global Yield Compression: In a low global yield environment, U.S. Treasuries, particularly long-term ones, remain attractive compared to international alternatives. As other countries experience lower or negative yields, international investors may increase their holdings in U.S. long-term bonds, further supporting TLT.
Flight to Quality: In times of heightened risk aversion, such as during financial crises or economic downturns, investors often turn to high-quality assets like U.S. Treasuries. This flight to quality can lead to increased inflows into TLT, driving up its price.
To much volume at lows to continue chopFrom the lows after 2023 bottom, we have seen TLT do nothing much at all in the short term time frame.
If we zoom out, they disconnected at the 2023 lows. This told me last year that we will see the lows again after TLT has time to recharge and balance the market back out.
This disconnect has everyone scratching there heads on a recession among other key factors, but not to many people have the long term patience to see it play out.
Inverse Head & Shoulders $TLT ETF Weekly ChartInverse Head & Shoulders NASDAQ:TLT ETF Weekly Chart The NASDAQ:TLT ETF weekly chart, which tracks 20-year+ Treasuries, shows an inverse head & shoulders pattern still intact. 📊 U.S. Treasury funds have attracted billions in inflows over the past couple of weeks, fueled by rising expectations of rate cuts and growing investor confidence in long-term government bonds. 💵 However, there's resistance at the $100 level— NASDAQ:TLT needs to break this level before heading higher. 📈🚀
#USTreasury #Bonds #FixedIncome #Investing #Finance NASDAQ:TLT #RateCuts #MarketTrends #ETF