As risk on gravy train continues post FED interest rate cut 🚞, it is certainly worth noting that risk off bonds are becoming significantly bearish.
Notice that TLT 20 year bond ETF has seen a significant failure printing a 3 wave pattern with a slightly higher high to then collapse back down.
Also notice that it is a failure through the 20 month MA.
And this is printing a very bearish Evening Star Pattern.
I say "very" because the current candle is printing a significant bearish engulf of previous bullish candles.
Overall this is a very bearish look and I think this has a reasonable chance of re-testing the lows to print a Wyckoff ST Secondary Test.
Its not impossible that there could be another wave down if US government debt falls further out of market favour.
That is less likely I would suggest but never say never 🧐.
Not advice
Comment
Looking a bit deeper, notice that US20Y (inverse to TLT) bottomed in the 1:0.618 Golden Window.
This is a weak ratio.
And so this could be a 3 wave correction now completing with a shakeout pattern through the 20 month moving average.
These charts are very exotic but this could be a first little clue that the bond market may be blowing up 👀.
Comment
Notice how money has been flowing out of the bond market since the FED interest rate cut.
Isn't it interesting that TLT was completing a weak 3 wave failure exactly as rates were cut.
That's not a coincidence I would suggest.
The market makers have a habit of timing these structures with perfection; to be tapping into higher liquidity at the slightly higher high above resistance, and above the 20 month moving average.
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