Has the Long End of the Treasury Curve Gotten Ahead of Itself?

During the summer of 2010 the 30-year US Treasury bond ($TLT, $ZB_F) mounted a powerful rally in anticipation of another round of Federal Reserve quantitative easing (QE2). Two days before Bernanke’s famous Jackson Hole speech on Friday August 27th, TLT made an important top which stood until last week:


Has the long end of the curve gotten ahead of itself in anticipation of this year’s Jackson Hole speech by the Fed Chairman? Notice the divergence between the RSI-14 and price on the daily chart of TLT:


The gap at 108 is a juicy obvious short term target for any pullback, beyond that TLT could easily pull back to the 20-day EMA and the area of price congestion 104-105. Whatever happens, I’ve got my popcorn ready for Friday morning’s Bernank-palooza.

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