About Those Bonds

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With the Fed making its last announcement of 2017 tomorrow (and Yellen making her last press conference as a Fed member), it should be an interesting Wednesday. I thought I’d point out that bonds, by way of TLT, might be in the throes of a fairly large head and shoulders pattern. What’s required here is for TLT to stay beneath that green tinted zone I’ve drawn (and, ultimately, to break the lower horizontal line).


Stepping farther back away from the chart, you can see this breakdown more clearly. The price relationship to the long-term trendline has been very shaky all year long, and it seems to me the strong pillar of uptrend support has a lot of splinters in it.


Besides shorting TLT, one way to play this is to go long TMV, the triple-bearish-bonds ETF:


Or, for those who would rather not subject themselves to high blood pressure, here’s the somewhat more mellow double-bearish TBT: