Pardon the pun, I couldn't resist.
TBT, the Ultra Short Long-Term Treasury ETF (which correlates very well with the U.S. long-term interest rates), has had quite an extraordinary week, chart wise (weekly and daily charts above - click to enlarge).
It has been forming a falling wedge pattern over the past three years and seems to have hit the lower falling trendline and then strongly rebounded off it on record volume on Friday (see charts above).
Even though the falling wedge pattern is valid as a bullish pattern only when the upper resistance line is broken, I think buying some TBT here with a stop below 26.75 (Friday's low) in anticipation of a bullish move makes for a low-risk entry. Last Thursday's huge risk-off trade and huge flight to quality (i.e. T-Bonds) combined with yesterday's already infamous S&P downgrade of the U.S. credit rating could very well mark a solid and durable bottom for U.S. long-term interest rates.
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