Surging Prices and Obvious Trend in US Treasuries TLT

Jan 28, 2015: 3:27 PM CST

It’s no longer a “stealth” movement but a blatant, obvious development that Bond/Treasury prices have surged in the last few months and continue persistent uptrends thanks to bullish money flow.

Take a moment to review the prior two updates:

Are You Seeing this Stealth Move in Bond Prices?!” and

Four Strong Trends Kicking Off 2015

With those in mind, let’s make the switch from “Stealth” to “Obvious” and update our bond charts and levels:

With today’s Federal Reserve statement behind us, we’re seeing a surge of additional money into Treasuries, boosting price (at least as seen in the popular ETF with symbol TLT) to fresh new 52-week highs.

Price broke through the $136 per share level which takes the price well-beyond the $130 per share high from 2012.

Amid calls for a “Bond Bubble” to burst, the reality is that bond prices (again, seen in ETFs) continue to see strong bullish money flow in a “safety play.”

Bubble or not, the reality is that price is – and continues – to surge with the continuing acceleration.

We can see the “Angular Momentum” or acceleration on the pure price chart below:

I often discuss the concept of “Angular Momentum” which is best seen on pure price charts with trendlines.

Notice the initial trendline off the start of January 2014’s low which continued through October 2014.

“Angular Momentum” or the slope of the trendline rose to connect the late 2014 low.

January 2015 required a NEW trendline to connect the surging prices.

These adaptive trendlines simply highlight rapid momentum – money flow – into the market as the trend accelerates.

There’s no fighting or fading this type of money flow, but increased angular momentum provides high risk to both sides of the market.

True, the bubble could pop, trapping emotional longs (buyers) at the highs while at the same time, this trend could accelerate further toward a “blow-off” top (trapping shorts/bears).

For a broader perspective, we turn to the weekly chart:

Price developed a broader top or reversal pattern (like a head and shoulders) through 2012 but rebounded with a Rounded Reversal at the end of 2013.

From there, price has traveled higher… and higher… and higher through 2014 and beyond.

Continue watching this strong trend carefully as money flows into the relative safety of bonds (even as US equities flirt with all-time highs).

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Corey Rosenbloom, CMT
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2 Comments

2 Responses to “Surging Prices and Obvious Trend in US Treasuries TLT”

  1. Armid Says:

    Great to be following such things as this have a strong effect on the overall market so if we keep our self-updated with this sort of news then it can help us in trading on other things like currency pairs. I am working with OctaFX broker and there I use Eur/Usd only as I have to pay very low spread of just 0.2 pips and also they have great platform where all my trading orders are executed instantly so that helps me do trading well and with such fast order that I am able to open I get better results following any news alert from here.

  2. Govind Says:

    We need to be careful with these things and make sure we follow the trend nice and early, it’s now very risky to enter at such peak which can obviously lead to some serious losses. I am grateful to my broker OctaFX, it’s extraordinary and got so many benefits especially with having swap free account to help me with long term trading and I never have to worry about overnight charges and even got daily updates system available for free.