Government bond ETF TLT has made almost 25% more than the S&P 500 this year. The chart below reflects time is running out on some key patterns in Govt bonds and the S&P 500 Index…
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Its been a very good year on a total return basis for TLT and IEF, reflected in the lower right performance chart. The rallies in TLT and IEF have now pushed them up to key multi-year resistance levels at the S&P 500 is working on ending its flag/pennant pattern.
The rising wedge in TLT and the Flag pattern in the 500 have little time left, they will break soon. If history is any guide, for TLT/IEF to break resistance the 500 index needs to fall hard out of the flag pattern!