More on That Elusive Top

No. Not a top in stocks. But rather, Treasuries.

Here was what I wrote back on April 26th in this post:

Dating back to last summer, I had been looking for the TLT ETF to break lower from a massive bearish rising wedge spanning several years. We know Treasuries have been in a secular bull market, and continue to resist a major rollover even as many notable market players are calling for them to top out.

On the updated weekly chart below, also consider the potential for the bearish rising wedge to morph into a head and shoulders top (light blue lines).

Nonetheless, the fact remains that topping is a process and often a tedious one at that, with no room for ego. Beyond that, the possibility for yet another leg higher is still in play given the resilience. If bond bulls can plow up through $125 here, it will put the bear case in grave danger of being negated since the “left shoulder” thesis weakens considerably.

And here is the updated weekly chart for TLT, below. Note that last week and this week’s price candles both are sizable and solid red. We are seeing some forceful rejection away from the “right shoulder” of the head and shoulders topping pattern, or another lower high after the bearish rising wedge breakdown depending on your interpretation.

Either way, Treasuries remain vulnerable and increasingly so on the longer-term timeframe.

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