TLT Breaks Its 6-Year Downtrend on the Monthly Chart

The iShares 20+ Year Treasury Bond ETF (TLT) just did something it hasn’t done since 2020. It closed a monthly candle above its long-term downtrend trendline. For bond bulls who’ve been underwater for six years, it’s the first real sign the trend might be changing.

What the trendline break means

A trendline connecting monthly closing prices from TLT’s 2020 peak has held as resistance for six years. Every rally attempt since then got rejected at or below this line. Sellers were in control the entire time – pushing the price from $180 down to the low $80s.

But February’s monthly candle closed above it for the first time – and monthly closing prices filter out the noise. Intramonth wicks can poke above a trendline temporarily. But a full monthly close tells you sellers couldn’t push the price back below it before the candle closed. And that buyers ended the month in charge.

There’s a macro angle here too. AI is making things cheaper to produce – but it could also put people out of work. Fewer jobs and lower inflation tend to push investors into bonds. That’s good news for TLT if it plays out. I wrote about this in our AI recession piece.

What to watch next

The key is whether TLT holds above the trendline. If next month’s candle stays above it – or retests it as support and bounces – that confirms the break. It would also suggest the multi-year downtrend is done.

If TLT drops back below on a monthly close, the break was a fake-out – and bond bulls are back to square one. Again.

As usual, none of this is investment advice. To learn more about how trendlines work in your strategy, check out our Trendlines Explained guide.