The ratio of TLT to the S&P 500 Index (SPX) has demonstrated improved intermediate-term momentum, responding positively to a counter-trend ‘buy’ signal generated by the DeMARK Indicators. This setup mirrors previous instances in November 2023, June 2024, and February 2025, where TLT experienced a phase of enhanced relative performance against the SPX over the subsequent 2-3 months.
While we anticipate that bonds will outperform stocks in the short term, it’s important to note that this is a counter-trend view, as the ratio has been characterized by a declining 40-week moving average (MA). In absolute terms, TLT broke above its 40-week MA in September, and its weekly MACD has turned positive, both of which are encouraging signs for intermediate-term performance.
Long-term momentum has also improved, highlighted by a recent “golden cross,” where the 50-day MA crosses above the 200-day MA. However, the broader trend for TLT remains neutral, constrained by long-term trendline resistance near $96.40.
Before increasing exposure to any asset, it is prudent to identify a fresh technical catalyst in absolute price terms. Currently, TLT is signaling a daily MACD buy signal, supported by a rising daily stochastic oscillator. This combination raises the likelihood of a minor breakout above the September peak near $90.50. If this breakout occurs, it would represent a short-term bullish development, with a target of secondary resistance at the February peak around $92.50.
Initial support for TLT is defined by the confluence of the 50- and 200-day MAs, situated in the $88.00-$88.30 range.
—Katie Stockton with Will Tamplin
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