In early 2020, Treasuries peaked following the news of the coronavirus. Since then, everything has deteriorated for the Treasury bond market.
Admittedly, the decline started slowly, with bond prices falling in 2020 and 2021. But as inflation became more pervasive, markets took notice. And the Federal Reserve too. Several interest rate hikes rattled bond markets and sent the long-term Treasury Bond (TLT) ETF plummeting.
And when I say tumbling, it’s a nice way of saying crashing. TLT went from $150 to $91 in one year!
Nothing goes down in a straight line. More recently, a relief rally has taken shape and Treasuries are bouncing back. Today we take a look at how far this rally could extend.
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“Weekly” chart $TLT 20+ Year Treasury Bond ETF
Note that you can read my treasury bond trading information and the downward price target, as well as my initial thoughts on where the emergency muster can be directed. Now for an update:
The long-term Treasury bond (TLT) ETF is approaching its first price target, the decline in the 40-week moving average around $112 to $114. A move there could see TLT reach its early August high and the top of what would be a flat base. Although a push may reach the 38.2 Fibonacci retracement level, I think this rally will need a break before we can assess if there is further upside.
Twitter: @andrewnyquist
The author may have a position in the titles mentioned at the time of publication. Any opinions expressed herein are solely those of the author and in no way represent the views or opinions of any other person or entity.
