Market Insights: Silver and Treasury Bonds Under Pressure
As we approach the end of the year, two popular exchange-traded funds (ETFs) are facing significant headwinds. The iShares Silver Trust (SLV) has broken below a critical neckline, signaling a potential decline, while the iShares 20+ Year Treasury Bond ETF (TLT) has suffered a sharp correction, breaching a key trendline.
Silver’s Downward Trajectory
The SLV’s head-and-shoulders top pattern suggests a measured move to the $23-$25 region, a level supported by the 50% retracement of the February to October rally. Furthermore, the 61.8% retracement level sits at $24.60, which coincides with the cluster of support in the mid-$20s. Although the Commitment of Traders (COT) data remains bearish, it has shown moderate improvement for SLV. Sentiment indicators are mixed, with some bearish signals and others neutral, despite the recent failed breakout and decline.
A Seasonal Boost Ahead?
Historically, silver tends to perform better in the early months of the year, which could provide a much-needed boost to the struggling metal. However, with the current bearish sentiment and technical indicators, it’s essential to approach with caution.
Treasury Bonds Under Pressure
The TLT has been under intense selling pressure over the past nine days, breaking below its prior low from mid-November and taking out a bullish trendline off the lows since April 2024. This move suggests a potential test of the 61.8% retracement of the rally from October 2023 until September 2024. With interest rates and inflation concerns dominating the market narrative, the TLT’s decline may continue in the short term.
What’s Next?
As we navigate the complex market landscape, it’s crucial to stay informed and adapt to changing conditions. With the SLV and TLT facing significant headwinds, investors should be prepared for potential volatility in the coming weeks. By staying vigilant and monitoring market developments, you can make informed decisions to protect and grow your portfolio.
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