Price has a way of being drawn to significant support and resistance areas. What happens once it gets there often provides useful and important information about what comes next. So keep a close eye on the long-term treasury.
Overall, it seems like most investors have adopted the “interest rates are now rising so I better get used to it” mode of thinking. And there is good reason to believe it. But in the financial markets, nothing is ever guaranteed.
As you can see, the long bond (using ETF TLT as a proxy) is nearing an important “line in the sand” as I type.
Figure 1: AIQ TradingExpert
Now here is where a skilled market analyst would discuss in depth why the bonds are, a) set to break out to the upside, or b) sure to bump up against resistance and be repelled. Alas, I don’t know the answer.
Here is what I do know: We are quite likely about to learn a lot about where bonds are headed next very soon.
So keep a close eye on TLT