$TLT - The Long Bond is Anyone's Guess
A Head & Shoulder's Top formation in the daily chart of TLT is clearly visible, but is it in fact a bearish pattern? We do not know yet. The declining resistance trend line drawn from the peak to the most recent high combined in reference to the lower support line touched this past week could be hinting to a larger bull flag consolidation. Mixed patterns are common in any instrument where the implication of a major move one direction or the other is likely to have an equal impact elsewhere in the markets.
The Head & Shoulders Top formation could have been triggered in the past week. Price appears to want to re-test the breakdown area around $106 (the $102 handle could be viewed as a secondary neckline) to see if previous support now resistance can be regained. The grey shaded area identifies a resistance "purgatory" price will need to get through if a target >$110 is in the cards near-term. Should price reject the 106 handle neckline and move through potential the secondary neckline at $102, the measured move target around $80 will be what most traders are expecting... eventually. However, $92 - $97 support should create a pause/bounce at a minimum on the way to obtaining the longer term objective.
For now, 106 and 102 are the handles to keep an eye on... Good luck out there!
The Head & Shoulders Top formation could have been triggered in the past week. Price appears to want to re-test the breakdown area around $106 (the $102 handle could be viewed as a secondary neckline) to see if previous support now resistance can be regained. The grey shaded area identifies a resistance "purgatory" price will need to get through if a target >$110 is in the cards near-term. Should price reject the 106 handle neckline and move through potential the secondary neckline at $102, the measured move target around $80 will be what most traders are expecting... eventually. However, $92 - $97 support should create a pause/bounce at a minimum on the way to obtaining the longer term objective.
For now, 106 and 102 are the handles to keep an eye on... Good luck out there!