From the Desk of Ian Culley @IanCulley
Bond investors must feel like it’s their lucky day.
Long-duration bonds are reaching new multi-month highs!
It finally looks as if a tactical bounce is underway for these safe havens-turned-risk assets…
The Treasury Bond ETF $TLT is coming off extreme oversold readings on the 14-day RSI, highlighted in the lower pane:
Over the past two years, oversold conditions at these levels have coincided with near-term bottoms for long-duration bonds.
Based on the chart, TLT looks poised for a mean-reverting rally.
Let’s zoom in…
Check out the daily chart carving out a potential six-week reversal formation:
I like trading TLT from the long side toward 99 -- but only if it holds above the October pivot high at approximately 88.25. That’s the line in the sand.
All bets are off if it slips below those former highs.
The 30-year Treasury bond...