There's a Storm Brewing in the Bond Market 🌤️ The Morning Print

Good morning! 

Long bonds may be nearing a major breakdown, with TLT testing a multi-year trendline that's held as support twice in the past.

Will the third time be the charm?

Let's take a look.

Long-duration bonds have remained locked in a persistent downtrend after breaking below their pivot lows in March 2022.

Since then, every rally attempt has been rejected and followed by renewed selling pressure.

TLT is now seeing extreme volatility compression as it hovers above its all-time lows near $81, which dates all the way back to 2004.

This is a major price floor, and the first sign TLT is resuming its downtrend would be a break of its trendline that's held for the past few years.

At the same time, the 30-Year Treasury Yield is approaching 5%, while Energy stocks are reawakening after a prolonged period of stagnation.

The setup suggests the bond market is nearing a pivotal move.

And it’s one investors won’t be able to ignore.