Don't Ignore This Chart!

Double Tops Could Become "A Thing" in the Bond Market

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The Bond Market Holds all the keys. And one of the key charts here is TLT.

After setting a big double top in 2020 and completing it at the end of the year, the start of 2021 was characterized by an acceleration lower, pushing yields higher. Support was found around the same levels as in 2019, in the 135 area. From March to June 2021, a small(er) double bottom was formed just above that area, followed by an upward break that completed that double top, sending prices back up. From July onwards, another consolidation, in the shape of another double top, formed just below the former breakout level, which never got challenged. And now we are seeing the completion of that new double top as TLT is breaking lower.

Looking at the bigger picture here we see a lower low, the double bottom after breaking from the major double top, and a lower high, the second double top, in place.

Taking into account the duration over which this has been developing and the price swings we have seen in the process...

This could become "a thing".

Support levels are found near 140, intermediate, and then 135, major.

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Julius de Kempenaer
Senior Technical Analyst, StockCharts.com
CreatorRelative Rotation Graphs
FounderRRG Research
Host ofSector Spotlight

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Julius de Kempenaer
About the author: is the creator of Relative Rotation Graphs™. This unique method to visualize relative strength within a universe of securities was first launched on Bloomberg professional services terminals in January of 2011 and was released on StockCharts.com in July of 2014. After graduating from the Dutch Royal Military Academy, Julius served in the Dutch Air Force in multiple officer ranks. He retired from the military as a captain in 1990 to enter the financial industry as a portfolio manager for Equity & Law (now part of AXA Investment Managers). Learn More
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