Bonds have been hit hard since the highs around the 4th of July last year. Could this big decline, be creating a bottoming pattern? Bottoms Up for bonds?

Below looks at the pattern of TLT over the past couple of years-

CLICK ON CHART TO ENLARGE

Last summer when bonds were peaking, it was easy to find bond bulls, as bullish sentiment for bonds stood at 90%. Today its not so easy to find bond bulls!

TLT could be attempting to create a reversal pattern (inverse head & shoulders) following a 20% decline from the highs. The inverse H&S pattern is far from proven at this time. If TLT would break above neckline resistance, it would increase the odds that this reversal patterns is important to the bond market.

 

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