The iShares Barclays 20+ Year Treasury Bond Fund (TLT) ETF “seeks to approximate the total rate of return of the long-term sector of the United States Treasury market as defined by the Barclays Capital U.S. 20+ Year Treasury Bond Index.”
TLT has been in a downtrend since the December 2008 highs. Two months ago it broke down out of a four month countertrend rally before finding support at $88.76 two weeks ago. It has since retraced back up towards resistance, which may have been found four days ago at $92.39. That resistance level is also right at the 100 period exponential moving average (ema), now a dynamic resistance level.
TLT is now giving indications of where shorts can enter. Support of the past few days is at $91.31. A move back down through that level would indicate weakening and increased odds of TLT continuing its overall decline.
If TLT does not break the $91.31 support level and close below it then the odds of it moving higher towards resistance of its downtrend line increases.
Another way to take advantage of a decline in Treasuries is by using the ProShares UltraShort 20+ Treasury (TBT) ETF. TBT “seeks a return of -200% of the return of an index (target) for a single day” thus adding leverage to your position.Near term resistance is at $48.09, which can be used as an entry signal (high of the past few days). If additional confirmation is preferred wait until the swing high of $51.21 is breached. At that point TBT will have also cleared its long term downtrend line (now resistance).
Disclosure: no current positions