{"id":24087,"date":"2025-05-23T07:30:00","date_gmt":"2025-05-23T11:30:00","guid":{"rendered":""},"modified":"2025-08-22T08:33:05","modified_gmt":"2025-08-22T12:33:05","slug":"the-most-dangerous-chart-in-the-markets","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the-most-dangerous-chart-in-the-markets\/","title":{"rendered":"The Most Dangerous Chart in the Markets"},"content":{"rendered":"\n

This is the most dangerous chart in the financial markets\u2026<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

This is a chart of the iShares 20+ Year Treasury Bond Fund (TLT).<\/strong> It\u2019s an exchange-traded fund that tracks the action in long-term Treasury Bonds.<\/p>\n\n\n\n

And, it\u2019s breaking down.<\/p>\n\n\n\n

Why is that dangerous?<\/p>\n\n\n\n

Because, as bond prices fall, longer-term interest rates rise. And, rising rates are bad news for stock prices.<\/p>\n\n\n\n\n\n

Please understand, the Federal Reserve Board sets the target for short-term Federal Funds interest rates. That\u2019s the rate over which stock market investors have been obsessing. That\u2019s the rate most folks expect the Fed will cut two or three times this year.<\/p>\n\n\n\n

Bond investors determine what happens with longer-term interest rates.<\/p>\n\n\n\n

Based on the look of the above chart, TLT looks set to fall. That means longer-term rates are set to rise.<\/p>\n\n\n\n

TLT peaked in September near $99 per share. It then declined all the way to $84 in January, where it found support and bounced. That bounce ran out of steam last month. TLT has been falling for six straight weeks.<\/p>\n\n\n\n

Now it looks like TLT is set to lose the support of the $84 level. If that happens, we could see a quick drop to the October 2023 low near $78.<\/p>\n\n\n\n

That would put long-term interest rates near 5.6%, or even a bit higher. We haven\u2019t seen long term rates that high in 20 years. And, it\u2019s happening at a time when the US Treasury has to refinance trillions of dollars in maturing debt, and when the US Government is trying to pass a budget that will add trillions more to the deficit.<\/p>\n\n\n\n

Stock market investors have ignored this situation, so far. TLT is down 8% over the past six weeks. Yet, the S&P 500 is sharply higher.<\/p>\n\n\n\n

Somebody is lying.<\/p>\n\n\n\n

Stocks and Treasury bonds typically move in the same direction. So, this sort of divergence is notable.<\/p>\n\n\n\n\n\n

One of these assets is due for an epic reversal. Either Treasury bonds need to rally to catch up with the action in stocks, or stocks are going to be pulled down to match the action in bonds.<\/p>\n\n\n\n

The widely accepted opinion on Wall Street is that bond investors are smarter than stock investors.<\/p>\n\n\n\n

We\u2019ll soon find out if that\u2019s true.<\/p>\n\n\n

Best regards and good trading,<\/p>\n

\"Signature\"<\/p>\n

Jeff Clark
\nEditor, Market Minute<\/em><\/p>\n

\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

It looks like the iShares 20+ Year Treasury Bond ETF (TLT) is set to fall…<\/p>\n","protected":false},"author":100,"featured_media":0,"comment_status":"closed","ping_status":"0","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-24087","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/24087","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/100"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=24087"}],"version-history":[{"count":3,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/24087\/revisions"}],"predecessor-version":[{"id":25058,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/24087\/revisions\/25058"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=24087"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=24087"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=24087"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=24087"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=24087"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=24087"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=24087"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}