I’m a big fan of ETFs, but when analyzing an asset class, the analysis should be based on the purest representation of that asset class.
A number of technical analysts spotted a bullish TLT breakout on March 27. TLT is the iShares 20+ Year Treasury ETF (NYSEArca: TLT).
On March 28 I published the article “Beware of False TLT Treasury ETF Breakout and S&P 500 Breakdown.”
TLT’s breakout appeared like a ‘fake out break out’ because the 30-year Treasury Futures (ZB), a purer representation of Treasuries, didn’t confirm the breakout.
The first two charts below (featured in the March 28 article) show the discrepancy between TLT and ZB.
![](http://www.ispyetf.com/app_files/PDNewsletter_Images/TLT4314.png)
In short, TLT is above resistance (green bubble), ZB is well below important double resistance.
![](http://www.ispyetf.com/app_files/PDNewsletter_Images/ZB4314.png)
The performance of 30-year Treasuries can be a powerful tell tale sign, as Treasuries often move in the opposite direction of the S&P 500 (SNP: ^GSPC).
A Treasury breakout would likely have coincided with an S&P 500 breakdown.
The third chart zooms in on 30-year Treasury futures (ZB) and highlights the performance since March 28 in blue.
![](http://www.ispyetf.com/app_files/PDNewsletter_Images/ZBO4314.png)
We see that ZB was rejected by resistance, but more importantly, ZB is now trading right on top of short-term green trend line support (green arrow).
This means that it will probably takes a drop below support to unlock lower prices for ZB and higher prices for the S&P 500.
Just like 30-year Treasuries have found support, the S&P 500 is dealing with key resistance.
This S&P 500 resistance is revealed here and may well change the way you look at the S&P 500:
S&P 500 – Stuck Between Triple Top and Triple Bottom – What’s Next? (Article #4)
Simon Maierhofer is the publisher of the Profit Radar Report. The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013.
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