What’s next for bonds, TLT, and interest rates?

The iShares 20+ Year Treasury Bond ETF (TLT) has been down since the start of August and the market has ignored it – until this week.

This week, the yield on 10-year Treasuries has hit an incredible 1.60%, jumping about 50 basis points this month. The stock market shuddered and traders started selling tech names left and right.

Let’s see some graphics.

In this weekly TLT dot and figure chart, below, we have used close price data only and the chart shows a double bottom allocation pattern with a potential price target downward of $ 115.

In this dot and long-term chart of the 10-year US Treasury yield, we can see a target upside of 2.38%, but a trade at 2.00% will hit below a line. long-term downtrend.

The yield trend is downward on this graph from 2000 onwards, but actually downward since 1981. Thank you, Mr. Volcker.

A word about prices

Let’s talk about the tariff backdrop.

House prices have jumped in many parts of the United States and many market watchers have linked the surge in asset prices and the price of crude oil to the flood of stimulus funds around the world.

Why should an interest rate hike be such a shock “overnight” to the markets?

Bottom-Line Strategy

A rise in the US dollar in the coming weeks could blunt the current commodities boom. The Fed could get nervous and do something to raise bond prices. Who knows?

Meanwhile, the TLT is in a downtrend and I don’t see any price drop yet. A rebound can happen at any time, but it may not be enough to reverse the current trend.

The 10-year Treasury will likely move sideways around 1.50% for a while, but could reach 2% later this year or maybe next year.

There are a lot of moving parts, so try not to get too caught up in the daily shaking.