This is one of my favorite charts in the world folks. We can call it one of many silly names that us technicians use: Double Bottom, Rounding Bottom, W-Bottom, Kardashian Bottom, etc. But the name is less important that its implications. All of these have one thing in common: “Bottom”. This doesn’t look like a top to me:
The more times that a level is tested, the higher the likelihood that it breaks. This is now the 5th or 6th attempt since last summer to get through this key resistance.
The measured move based on the size of this consolidation is about 7 points. This takes us near the 115.50-116 level which also represents former support from early last year as well as the 61.8% Fibonacci retracement from the 2013 decline:
I’ve said for the last few weeks that Treasury Bonds are a buy all day long above 105.50. That still remains the case. We only want to own these guys above that level. Below that and all bets are off.
So we have our target, we have our stop loss, and those are my necessary ingredients for a position. The bigger trend still favors the bulls, I’ve liked Treasury Bonds all year – both on their own as well as relative to stocks. This hasn’t changed at all.
While people worry about what the fed is saying or not saying, we’ll worry about what the market is actually doing. This is the only thing that matters. Literally the only thing….
Tags: $TLT $TNX $ZB_F $ZN_F