Where Are U.S. Treasury Bonds Heading From Here?

The obsession with when Interest Rates are going higher has been one of the most fascinating things to watch as a market participant over the past few years. Economists continue to tell us that rates are going higher, but the market keeps suggesting, as it has for years now, that rates are likely to stay down or even go lower.
Today we are looking at shares of $TLT that represent a liquid exchange traded fund that tracks U.S. Treasury Bonds, particularly the longer end of the curve. First we want a more structural perspective to see where we are bigger picture and then work our way down. Here is a weekly candlestick chart showing prices exploding higher throughout 2014 after Wall Street economists told us they would head lower. This year we have retraced exactly 61.8% of that move to find support near the 115 level. This is a standard retracement and a key support level that we want to watch. From a risk management perspective, I see no reason to be long if prices are below that support since June.

Looking at this tactically, we want to be adding to positions only if prices are above this downtrend line from the April highs and taking profits near 123 which served as support last December and this March. We have a key downtrend line from the 2015 highs and a flat 200 day moving average that suggest fading any strength into those levels.

Here is a short video describing what we are seeing here with a bit more detail: