TLT | 3H | BOUNCEProjected scenario on bonds. Market may rally on the short term then stop and go lower.
Cheers,
Keops
TLT
US 10yr Looking to Retest key multi-year trendlingBearish momentum divergence. The rise of long term yields on the Fed meeting was comical and offered a great opportunity to get long US bonds at least for a short term trade.
RSI comparison across SPY GLD USO TLTCapital flows can be inferred from a comparison of SPY GLD USO TLT in terms of relative RSI's
TLT: My Short Term Target (1hr)I'm expecting some short covering this week due to the Fed festivities.
Grab some treasury on a full bus of bears! Despite the bond bubble right now, I believe there's some room for another rally in bonds.
The election of trump have seen stocks driven to record highs, and bonds/treasury/gold crushed. The longest stretch of inflows into US equities since 2014 when the dollar rallied 20%.
Net short in 10 year bonds are currently at record lows: (-500,000)
i.imgur.com (courtesy of zerohedge)
A large covering of shorts could drive bonds much higher in the coming days into Q4 earnings season. I believe a buy at this level is a pretty reasonable risk reward on the backs of the majority in the market... (4% stops, 20% tgt)
Transitioning to Risk-OFF Inflationary EnvironmentWe are about to transition from a risk-ON inflationary environment to a risk-OFF inflationary environment. That means bond yields might fall even though inflation is rising. The US has been a huge beneficiary of the risk-ON move and as a result should see outflows. That means lower equities, and a weaker dollar. Given a falling dollar, rising inflation, and risk-OFF environment, it doesn't seem unreasonable to think that GOLD could do quite well. US treasury bonds should outperform HYG and EMB. Oil is the wild card. Higher or even flat oil prices will be much higher than they were last year. The YoY inflation effects if OPEC can stabilize the oil market above $50 for the next two months would really feed into inflation. Higher inflation would hurt the US consumer and business margins applying further downward pressure on risk assets. But I am getting ahead of myself. The risk-ON rally is likely over, and it's time to expect a risk-OFF rising inflation environment.
TLT: Short term rally, potential pullback in a downtrendTLT offers a low risk buy if we make a new high tomorrow, with a stop under the recent swing low.
We can aim for a retest of weekly resistance, as signaled on chart. I'd rather buy and exit there to be safe. There's a chance we might be able to flip short at that level, but I'd rather take that trade by buying $USDJPY and $USDSEK for instance, and/or shorting $EURUSD.
Good luck,
Ivan Labrie.
Sell the hell out of LT treasuries if we pullback to the meanOne of the most obvious trades out there. Pullback to mean would be KILLER value. Will be watching this closely and using Marty Armstrong's Socrates levels for confirmation.
There is certainly a chance we continue down further to that next support trend line before pulling back. In that instance we may see a H&S formation occur with the right shoulder at fib.
TLT weekly - approaching major support - 12/1/2016TLT is approaching major long term support line. RSI oversold. Expect some rebound (might be close to 40 week MA, which is $130 level).
SELL SEMICONDUCTORS - LONG TLF RATIO 0.59 -target 0.50SHORT SMH
LONG TLF
Target 0,50 - Super retracement expected
Unload Risky assets tactically (1-3 months)
14-15% Potential Gain
Set your own Stop Loss.
Is the bond riot over? After such a steep and brutal sell-off, the technical picture for TLT in the longer term still remains intact. This move that began in 2014 will not end like this, what with interest rates at historic lows all over the world. The FED can claim to hike in Dec, but I never focus on what they say, but rather on they do. Just try and remember what they claimed to do at the start of 2016 ... can anyone remember the call for 4 hikes in 2016? Which then became 2? And then now, it seems we will be getting 1 in Dec? My assertion is higher prices for TLT in the days and years to come. Great opportunity to go long TLT with the market front-running the US Fed.
Bounce in Bonds? TLT ZN!1 TBT Bonds usually bounce after huge sell offs
before continuing to sell off. 2013 multi week sell off had
mid week bounces to roughly 50% of previous week's range.
good spot to buy some longer dated calls (dec?) at 126'235
for a bounce next week to around high 127s or low 128s+.
RSI lowest in years, closed 4 days outside lower BB, very oversold.
good statistical probability. however, might fail due to unprecedented political climate and china dumping
