Below looks at the government bond ETF TLT over the past 10 years.
For the first seven months of this year, TLT rallied strongly. That rally took it to the top of its 10-year rising channel at (1), where it tested triple resistance as momentum was reaching levels not often seen over the past decade.
The week after hitting this resistance zone at (1), it fell hard, creating an engulfing weekly pattern.
Last week could prove to have been important for TLT, when it rallied and hit new falling resistance at (2), it created a large reversal pattern (bearish wick) last week.
While many continue to debate whether the Fed will raise rates, we feel that what TLT does at (2) is extremely important, due to last week's large bearish wick at (2).