Bonds Are Poised to Surge Again

• Posted by Greg Harmon
• on September 26th, 2014

4 Things in the chart of the 20 Year Treasury ETF ($TLT) suggest that it is poised to take another step higher. After a pullback through most of September the ETF found a bottom near the 113 area and has reversed higher. What happens next?

The chart above shows that the price action Thursday printed a bullish Marubozu candle. This is special in that it opened at the low and closed at the high. Bullish action all day long. This price action happened as it crossed both the 20 and 50 day SMA’s. Price is now on the bullish side of all the moving averages. The RSI in the top of the chart shows that momentum is growing and into the bullish zone. Finally the MACD at the bottom shows a bullish cross higher a couple of days ago and continued movement higher. These combine to support higher prices. The next possible trouble area looks to be the gap that starts the 117.38 and then the prior highs at 119.37.

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