Bonds Are Facing Their Most Important Test In Decades (TLT)

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February 27, 2018 6:37am NASDAQ:TLT

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From Chris Kimble: The top part of the chart below looks at the 10-year yield on a monthly basis going back 14-years.

The bottom section looks at the 19-month performance since 2004. Yields are up 94% in the past 19-months, which is the largest 19-month rally in decades. The last time rates were up this strongly was at the end of 2013.

Despite this historic rally, the yield is “below 2013 highs and has not broken above 5-year falling channel (2).”

As yields are testing dual resistance below lines (1) and (2), they could be creating a reversal pattern as the month is nearing a close at (3).

The 4-pack of yields above highlight that long-term falling channel resistance is in play at each (1).

With the 10-year yield at the top of 5-year falling channel resistance and just below 2013 highs (top chart), in my humble opinion, this is one of the most important prices points for yields and bonds I have seen in my 38-year career.

The iShares Barclays 20+ Yr Treas.Bond ETF (TLT) was unchanged in premarket trading Tuesday. Year-to-date, TLT has declined -6.85%, versus a 4.14% rise in the benchmark S&P 500 index during the same period.

TLT currently has an ETF Daily News SMART Grade of C (Neutral), and is ranked #22 of 28 ETFs in the Government Bonds ETFs category.

This article is brought to you courtesy of Kimble Charting Solutions.

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