The TLT(20+ Year Treasury Bond Fund)has been under intense pressure this week. The index began to weaken on Monday before getting slammed yesterday. This high volume breakdown drove the TLT back down to a major support zone that has held up extremely well over the last few years. The $116.50 to $117.00 area marked major lows in 2016 and 2017 as well as the February, April and May lows this year. The steady pressure so far this year has certainly softened up this key zone but until this area is convincingly taken out it should be given a great deal of respect. A close below $116.00 would do a great deal of damage.
The inverse of the TLT action is the TYX(30 Year Treasury Yield Index). This index has not been able to convincingly clear 3.2% since the summer of 2015. The 2015, 2016, 2017 and multi-month 2018 highs have been capped by the 3.2%-3.25% area. This zone is weakening as well this year as pullbacks from heavy resistance become less deep. Until cleared 3.25% should continue to be respected as major resistance. A TLT move below $116.50 would likely drive the TYX to new multi-year highs.
At time of publication we do not have a position in TLT.