Remember the macro environment we're working in. The IEFs have formed a long-term head and shoulders pattern. A break through the trendline makes sense given the overall interest rate environment right now.
Looking at the last few weeks worth of data we see the following:
a.) Prices took a big gap down
b.) The down bar is very strong, indicating there is a lot of momentum in the downward move.
c.) Prices consolidate in a triangle pattern right at the long-term head the shoulders neckline. Consolidation at or near long-term trends is pretty standard
d.) After gapping lower, prices formed an upward sloping triangle consolidation pattern
e.) The EMA picture is negative. The long-term trend line (200 day EMA) is moving lower, as is the 50 and 20 day EMA. While the 10 day EMA has started to turn up we need to see a lot more action from the 10 day EMA to say the overall trend has changed. Far example, we would need to see at least a move through the 20 day EMA and probably more given the fundamental macro environment. So far, what we probably have is a reaction trend.
