TLT - Risk Off Is Dead (For Now At Least)
Updated
As risk on gravy train continues post FED interest rate cut 🚞, it is certainly worth noting that risk off bonds are becoming significantly bearish.
Notice that TLT 20 year bond ETF has seen a significant failure printing a 3 wave pattern with a slightly higher high to then collapse back down.
Also notice that it is a failure through the 20 month MA.
And this is printing a very bearish Evening Star Pattern.
I say "very" because the current candle is printing a significant bearish engulf of previous bullish candles.
Overall this is a very bearish look and I think this has a reasonable chance of re-testing the lows to print a Wyckoff ST Secondary Test.
Its not impossible that there could be another wave down if US government debt falls further out of market favour.
That is less likely I would suggest but never say never 🧐.
Not advice
Notice that TLT 20 year bond ETF has seen a significant failure printing a 3 wave pattern with a slightly higher high to then collapse back down.
Also notice that it is a failure through the 20 month MA.
And this is printing a very bearish Evening Star Pattern.
I say "very" because the current candle is printing a significant bearish engulf of previous bullish candles.
Overall this is a very bearish look and I think this has a reasonable chance of re-testing the lows to print a Wyckoff ST Secondary Test.
Its not impossible that there could be another wave down if US government debt falls further out of market favour.
That is less likely I would suggest but never say never 🧐.
Not advice
Note
Looking a bit deeper, notice that US20Y (inverse to TLT) bottomed in the 1:0.618 Golden Window.
This is a weak ratio.
And so this could be a 3 wave correction now completing with a shakeout pattern through the 20 month moving average.
These charts are very exotic but this could be a first little clue that the bond market may be blowing up 👀.
Note
Notice how money has been flowing out of the bond market since the FED interest rate cut.
Isn't it interesting that TLT was completing a weak 3 wave failure exactly as rates were cut.
That's not a coincidence I would suggest.
The market makers have a habit of timing these structures with perfection; to be tapping into higher liquidity at the slightly higher high above resistance, and above the 20 month moving average.
All by design 🤨.
Trade active
TLT
Looking on lower time frame, the RSI is quite high as price makes a lower low.
And it is currently within a 2.272 Golden Window.
So there could be a bounce coming to print a bear trap shakeout through the demand line.
I've taken some profit here but will also hold some with higher time frame bias.
This is not a big trade for me since this trend has already had significant bearish action but I think it looks very much odds on to re-test the lows and maybe make another wave down.
If it bounces I will look to re-enter my shorts on a bull trap shakeout pattern 👀.
Note
Gap up pre-market.
It will most likely get back to the demand trendline here and perhaps even back to the 0.382 @ $95.
Either way this is getting back to the lows I think 👀.
It was good to take some profit 👍.
We're into the post FED interest rate cut blow off phase for risk on markets🥳.
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I have many great deep value opportunities ❕
Many Trade Ideas Every Day 📈
Regular videos ✨.
Telegram Group: $50 per month 👍🏻.
Contact: t.me/dRends35
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