The long bond TLT gave us a weak short-term buying signal two weeks ago. The price did bounce and the full measurement target for the bounce will be 96.45 area.
Whether the price can get there or not depends on if the 94-93.50 range holds up. But for the long term, the bond price remains in a bear market. The current rally can only be treated as a correction rally, not a Bull market rally.
The price needs to go above 110 to bring the bond back into a bull market, which is still a long way from the current price.
One thing that catches our attention is the statements from the Fed about ending QE2 program and bond purchase will through primary dealers after June.
If that actually occurs, then the current bond price move speaks for itself. We believe some dealers are accumulating long positions ahead of the possible end of the QE2 program in June.
This is an excerpt from the free Weekly Market Preview published by Naturus. To see the complete document, visit http://naturus.com
TLT Daily chart
