Trading Indicator With 100% Win Rate Signals Sell Long Bonds Now

A technical trading strategy with a perfect trading record this year is signaling that it’s time to sell long-maturity Treasuries after a rally last week.

BlackRock Inc.’s $51 billion bond exchange-traded fund tracking Treasuries due in more than 20 years (TLT) surged on Friday through what technical strategists call the “trading envelope,” a breakout that suggests the fund was overbought. The move triggered a sell signal in a strategy based on the indicator, which calls for traders to unload the security when it reaches overbought conditions and to buy when it is deemed to be oversold.

The “moving-average envelopes” strategy has generated three previous signals this year — in January, February and April — and all turned a profit. It has returned roughly 18% in 2024, the best among more than 20 strategies using technical indicators tracked by Bloomberg.