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20+Yr Treasury Bond ETF Collapsing: A Technical Look

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March 6, 2015 12:30 pm
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Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.

The iShares 20+Yr Treasury Bond ETF (NYSE: TLT) shares were trading sharply lower by $2.88 (2.4 percent) at $123.41 in Friday's session. The instrument seeks to track the investment results of an index composed of U.S. Treasury bonds with remaining maturities greater than 20 years. The sharp decline could be an indication that interest rates may be rising over the long term.

The issue, which has soared from its June 2007 low ($82.20) to its all-time high in January ($138.50), has benefited by the waves of quantitative easing. Although the Federal Reserve Bank is attempting to delay a rise in interest rates until the economy shows more strength, this chart may be warning that a bump in rates may come sooner than later.

In Friday's session, it opened sharply lower (Thursday's close of $126.29 vs. Friday's open $124.67), managed a brief pop to $124.84 before heading south. If the decline continues beyond its current low ($123.23), there may be additional support at the pair of lows from December 9 ($122.96) and December 10 ($123.08).

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