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
Creator, Relative Rotation Graphs
Founder, RRG Research
Host of: Sector Spotlight
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