The recent weakness in Treasuries has with plenty of gaps and whipsaws for longs and shorts alike. For several years now, we have seen dip-buyers in Treasuries stage comeback after comeback. However, as I have been noting since last summer there are long-term technical warnings signs here. After churning in the $120’s for months on end, TLT finally weakened into last December and the first few weeks of 2013.
As you can see on the updated daily chart below, we are looking for this second consecutive bear flag (purple lines) to resolve lower as a sign that we are building towards a true inflection point. A weekly close below $118 is still the goal for bond bears.
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