Extended on the Monthly
TLT Monthly-Chart with Stochastic Indicator
“I also want to keep your attention to the candle-sentiment as I have circled (in red) unusually long candles after a prolonged uptrend. Many times, these unusually long candles (after a prolonged uptrend–not start of an uptrend) can represent the “final push” from the buyers, which it can quickly turn to a disaster (keep in mind, we are talking about monthly chart so when I say “quickly” I mean quickly in the monthly time-frame).” –excerpt from the previous post
So after about three-months since my previous post on this issue, we can see that the weakness last 4-months. Fortunately, since our aggressive upside trades we’ve made from late-march of 2014 to late January of 2015, we did not re-engage on the Treasury Bond because of that monthly-chart insinuation. I don’t believe we will have long side trade opportunity next 4-5 months until we start see some uptrend development in the daily-chart. These monthly overbought status can be hectic, and it could frustrate the buyers longer than many can expect. I would stay away from the Treasury Bond probably for the rest of the year.
This is the first time we’ve formed lower-high (thus creating a resistance (red line)) since the uptrend development back in January-2014. We now trading well below 100-day moving average, and currently trading right on that support level (blue dotted line which is also coinciding with 200-day moving average). If we lose this support, things could get much uglier in the intermediate-term which that could lead and spread to towards end of this year. I wouldn’t even think about going long on the Treasury Bond (TLT) until it gets well above $132-$133; even then I would have re-analyze the monthly-chart before considering it.