TLT - iShares Long-Bond ETF / US30 - Scalp Short, Switch Long
Updated
The TLT 20+ year bond ETF has, at this point, been bearish since August.
Personally, I thought after the late December-early January push upwards that TLT would have made a new high before dropping for a while because yields were trading a lot lower than the Fed rate, but that move never transpired and the shares have instead been mucking around.
I don't specifically like this price action for puts/shorts, because there's two big factors that make me believe TLT is going up:
1. On the monthly bars, there's nowhere lower for TLT to go, unless you believe a new all time low is coming:
Monthly
The 2014-2015 lows were taken during last year's bear pulses, in fact.
The same can be said for the weekly candles:
Weekly
When taken in light of the fact that TLT has not traded like it wants to go down for the last three months, this really is a spot that I think a trader has to either stay flat or look for a long at lower prices.
However, there's a big tell that there's a premium short scalp opportunity manifest in US30, the 30-year US Treasury Bond:
US30 30-year US Treasury Bond - Daily
The key factors are:
1. July of '21 was a complete gap fill
2. December of '22 made a lower low
3. The enormous November CPI surprise pump candle gap has been left untouched
4. The '22 year end retrace left the psychological 99.xx level untouched
5. The retrace on TLT to $99.60 was only a sweep of range equilibrium, evidenced by the fact that a new high has not been set. The FOMC candle failed to set a new high, too.
And all of that combines to lead me to believe that the US30 has in the range of 6-10 percent to retrace, and imminently, which would drive TLT down by $7-11.
Moreover, a $10 raid on TLT would make a lot of sense if there's about to be a significant moon mission in the markets. It would take out the December pivot lows, rebalance the CPI-candle gap, and give permanent bears a chance to lose their accounts going short at the bottom.
But I believe if you're going to go short here, you have to treat it as a scalp. Because there's no downside left besides setting a new all time low on the ETF, which mirrors the bond market in its own manifestation, chances are we go up. Moreover, with the Fed clearly slowing the pace of their rate hikes, there's no reason to believe bond yields will exceed 5% for more than a few days until late 2023 at the earliest.
$98-95 TLT would be a long with targets at $120 and $130.
When the markets start to go up again, you have to avoid being short, but you also need to be super, super careful being long. The reason is that the situation in China with Xi Jinping and his Chinese Communist Party being sacked by the Wuhan Pneumonia pandemic is many, many, many times worse than we're being led to believe by establishment media and social influencers.
The number of deaths in China has been terrifying, and whenever you're dealing with so many excess deaths, a country is going to lose a certain percentage of its engineers, technicians, and supply chain. This, in my opinion, is the real reason companies like Apple are moving their production out of China.
So one day in this lifetime of ours when the CCP falls like the USSR did, it will happen overnight, and China daytime is US night time, meaning the US equities and bond markets will go gap down, but this time they'll just stay gap down.
Moreover, the world will change when the Party is gone. The normalcy we've become accustomed to and this way of living as human beings will all change. But the transition won't be so pleasant.
It's very important to value virtue and do your best to cultivate your heart. Atheism and the theory of evolution are unscientific poisons. Never forget this.
Personally, I thought after the late December-early January push upwards that TLT would have made a new high before dropping for a while because yields were trading a lot lower than the Fed rate, but that move never transpired and the shares have instead been mucking around.
I don't specifically like this price action for puts/shorts, because there's two big factors that make me believe TLT is going up:
1. On the monthly bars, there's nowhere lower for TLT to go, unless you believe a new all time low is coming:
Monthly
The 2014-2015 lows were taken during last year's bear pulses, in fact.
The same can be said for the weekly candles:
Weekly
When taken in light of the fact that TLT has not traded like it wants to go down for the last three months, this really is a spot that I think a trader has to either stay flat or look for a long at lower prices.
However, there's a big tell that there's a premium short scalp opportunity manifest in US30, the 30-year US Treasury Bond:
US30 30-year US Treasury Bond - Daily
The key factors are:
1. July of '21 was a complete gap fill
2. December of '22 made a lower low
3. The enormous November CPI surprise pump candle gap has been left untouched
4. The '22 year end retrace left the psychological 99.xx level untouched
5. The retrace on TLT to $99.60 was only a sweep of range equilibrium, evidenced by the fact that a new high has not been set. The FOMC candle failed to set a new high, too.
And all of that combines to lead me to believe that the US30 has in the range of 6-10 percent to retrace, and imminently, which would drive TLT down by $7-11.
Moreover, a $10 raid on TLT would make a lot of sense if there's about to be a significant moon mission in the markets. It would take out the December pivot lows, rebalance the CPI-candle gap, and give permanent bears a chance to lose their accounts going short at the bottom.
But I believe if you're going to go short here, you have to treat it as a scalp. Because there's no downside left besides setting a new all time low on the ETF, which mirrors the bond market in its own manifestation, chances are we go up. Moreover, with the Fed clearly slowing the pace of their rate hikes, there's no reason to believe bond yields will exceed 5% for more than a few days until late 2023 at the earliest.
$98-95 TLT would be a long with targets at $120 and $130.
When the markets start to go up again, you have to avoid being short, but you also need to be super, super careful being long. The reason is that the situation in China with Xi Jinping and his Chinese Communist Party being sacked by the Wuhan Pneumonia pandemic is many, many, many times worse than we're being led to believe by establishment media and social influencers.
The number of deaths in China has been terrifying, and whenever you're dealing with so many excess deaths, a country is going to lose a certain percentage of its engineers, technicians, and supply chain. This, in my opinion, is the real reason companies like Apple are moving their production out of China.
So one day in this lifetime of ours when the CCP falls like the USSR did, it will happen overnight, and China daytime is US night time, meaning the US equities and bond markets will go gap down, but this time they'll just stay gap down.
Moreover, the world will change when the Party is gone. The normalcy we've become accustomed to and this way of living as human beings will all change. But the transition won't be so pleasant.
It's very important to value virtue and do your best to cultivate your heart. Atheism and the theory of evolution are unscientific poisons. Never forget this.
Note
US30 30-Year TBond gapped down 7% on daily open.We'll see how it affects
TLT price tomorrow.Note
A nice fat $103 double bottom on TLT when it has yet to take out the $99~ lows and is trading in an area where it makes little sense to bounce.Note
ZB TNote futures are more or less a direct mirror of TLT (or vice versa) and look like they'll head to 120-122.Note
TLT sweeping $100 and bouncing shouldn't have been the bottom, especially with that phat gap sitting in the lower 90s.Friday's price action was really a 76% retrace short set up. J Powell takes the stage tomorrow.
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