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July 19, 2009 / Jeb

TLT Treasury Chart Analysis

TLT

This has been a challenging market to trade as there are a lot of mixed signals.  The overall market appeared to be breaking down from a head and shoulders reversal pattern.  As it seemed to be breaking down treasuries were finding a lot of support and breaking through clearly established trendlines as shown above.

Volume came into treasuries as it broke its 50 day moving average which has been acting as resistance.  Nevertheless, as soon as the market reversed upwards treasuries sold off breaking below the 50 day on below average volume.  This created what technical analysts call a “whipsaw.”  The 50 day moving average is still sloping downwards which has called off my belief of at least a rally to 100.  Right now we are moving back in to our gold equity positions even though there is still huge “gray” areas in the market now.

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