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Thursday, December 26, 2013

TTL 12/26

I wrote about TLT in an important decision area a few weeks ago.  It is still in the decision area, but things are getting tense.  Here is the daily TLT chart.

TLT has been forming a descending triangle for months.  Early this week it broke out over the upper trend line.  However, it found nothing but sellers up there.  Today it closed right at the lower support line.  Is it going to break down or will support hold?  It may hold here into year end, but a failed break out of the upper line usually leads to a break of the lower line.  REITs and home builder stocks reacted very negatively to the rise in rates earlier this year.  If TLT breaks down all those stocks may be affected again.  If we see another rapid rise in rates it could cause more widespread problems.  An upside break out for TLT should be a positive for those same stocks.  Obviously the triangle is running out of room.  It will have to decide before too long.


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