#TLT time to buy bonds? 103 targetUS 20 year Treasury Bond ETF has finally managed to break the steep downtrend (DT) channel. I think we can move up to the level of 102-103 where we have an open gap - anchored vwap from 1st August highs as well as the 38.2 fib. Also notice the bullish divergence on the lows
TLT trade ideas
Signs Of Trend Reversal Hey Team,
If it holds, this could be a sign of a reversal; fingers crossed. Also large gap in pricing! A gap is an area discontinuity in a security's chart where its price either rises or falls from the previous day's close, with no trading occurring in between. Gaps are common when news causes market fundamentals to change during hours when markets are typically closed, for instance, an earnings call after-hours.
What Does A Gap Tell You?
Gaps typically occur when a piece of news or an event causes a flood of buyers or sellers into the security.
It results in the price opening being significantly higher or lower than the previous day's closing price.
Depending on the kind of gap, it could indicate either the start of a new trend or a reversal of a previous trend.
KEY TAKEAWAYS
A gap is a discontinuous space in the price chart of an asset or security, often occurring between trading hours. There are four different types of gaps:
Common Gaps
Common gaps generally get filled relatively quickly (usually within a couple of days) when compared to other types of gaps. Common gaps are also known as "area gaps" or "trading gaps" and tend to be accompanied by normal average trading volume.
Breakaway Gaps
A breakaway gap occurs when the price gaps above a support or resistance area, like those established during a trading range. When the price breaks out of a well-established trading range via a gap, that is a breakaway gap. A breakaway gap could also occur out of another type of chart pattern, such as a triangle, wedge, cup and handle rounded bottom or top, or head and shoulders pattern.
Runaway Gaps
A runaway gap, typically seen on charts, occurs when trading activity skips sequential price points, usually driven by intense investor interest. In other words, there was no trading, defined as an exchange of ownership in security, between the price point where the runaway gap began and where it ended.
& Exhaustion Gaps
An exhaustion gap is a technical signal marked by a break lower in prices (usually on a daily chart) that occurs after a rapid rise in a stock's price over several weeks prior. This signal reflects a significant shift from buying to selling activity that usually coincides with falling demand for a stock. The implication of the signal is that an upward trend may be about to end soon.
Gaps are easy to spot, but determining the type of gap is much harder to figure out.
Source: Investopedia.com
TLT Targeting A Test of 99.19Technical & Trade View
TLT (ishares 20+ Year Treasury Bond ETF)
Bias: Bullish Above Bearish below 93.27
Technicals
Primary support is 93.27
Primary pattern objective is 99.19
Acceptance above 95.40 next pattern confirmation
Acceptance below 93.20 opens a test of 90.30
20 Day VWAP bearish , 5 Day VWAP bearish
Notes
US CPI released today, volatility expected around the print
Goldman Sachs expects ‘a below-consensus 0.44% increase in core CPI in October (vs. 0.5% consensus), which would lower the year-on-year rate to 6.46% (vs. 6.5% consensus). We expect moderate increases in both food and energy prices to raise headline CPI by 0.49% (vs. 0.6% consensus), which would lower the year-on-year rate to 7.8% (vs. 7.9% consensus)'
Going forward Goldman 'expect monthly core CPI inflation to remain in the 0.3-0.4% range for the next couple of months before edging down to 0.2-0.3% next year. We forecast year-over-year core CPI inflation of 6.2% in December 2022, 3.3% in December 2023, and 2.7% in December 2024. The deceleration we expect in 2023 is driven more by goods than services categories'
TLT heads up on where SPY is headingPreviously, mentioned about how TLT, UST10Y and SPY have a special relationship where the former two leads the latter. And overlaying the SPY on the TLT daily chart, there is a warning given…
That TLT is heading down given that it failed a resistance level at 98, and more recently at 95. Support is at 93, and failing this brings TLT near its recent low.
The MACD is turning down, while the Vol Div clearly crossed down.
Oddly enough, while the correlation between SPY and TLT is uncanny, the SPY is still far off it’s recent low. A suggestion to manage risk surely? Hint hint.
IMHO, this another indication that the SPY is revisiting its last low… especially when TLT does that soon.
TLT -- When I'm Going to Thinking About Going Long 20 Year+The short answer is: at pre-Great Recession levels when the yield on the 10-year T note was at 5.0% or above.
Current forecasts for the terminal Fed funds rate are for 4.75-5.00 in February of 2023, which could push the 20 year+ paper exchange-traded fund back to near 2006-2007 levels between 80.50 and 82.05. (See, $TNX, June '06 high, 5.245, correspondent with a TLT 82.56 low; June '07 high, 5.316, correspondent with a TLT 82.20 low).
If current bets as to the terminal rate are correct, we should fall short of the 2006 and 2007 levels, but could nevertheless be pretty darn close. And since current bets are that the Fed Funds rate doesn't come off 4.75-5.00 until much later in the year (the current forecast, is, ugh, November of 2023), this would conceivably require a good amount of time to work out.
As we've seen, however, things can change. A few months ago, bets weren't being made on a terminal rate quite this high and that a potential cut would come far sooner in 2023. But, here we are. Inflation could either remain "sticky," or come down rapidly in response to what the Fed has done so far, in which case, we never see the low 80s in 20 year+ maturity paper.
Naturally, if we do get there, I'll look to dip my toe in, whether it be with short puts (which would be a quasi-acquisitional play, most likely in my IRA) or something more directional, like a long call diagonal or a zebra/call ratio backspread ... .
double DOJI ?I am going to preface this post by saying that it is very difficult to apply technical analysis to TLT since it is so much affect by MACRO events... but....
What we have is a DOJI GAPPING DOWN last friday followed by a SPINNING TO BLACK
OR, Arguably
Two Spinning top ONE WHITE ONE BLACK
if there is a reversal (bear trend up breakout) and it happens 52% of the time after the pattern, then we have on average a 9.69% return following the pattern - ($99) and as of now we have a 5.5% bounce to almost $98. Which is about half way from the top of the range I drew.
My point... be careful, may be wait till we break through $99 and retest of $99.
Hope this helps. I don't put a ton of faith that it is a reversal and if we are forming a bottom the I would guess we will retest these lows... It's encouraging though on a technical standpoint.
TLT: As of now, 92.30 (GREEN) is giving the bulls an edgeIt's not been a year to bottom pick TLT. In fact, it's rarely a good idea to bottom pick. However, when a durable S/R Level holds and ideally is re-tested, it creates a situation where buying a low makes sense. And with ones stops very clear, i.e. below 92.30 (GREEN), it's an asymmetric pay-off.
A similar level is seen in 10-Year Notes.
TLT island bottomWow! I certainly did not expect this, but it should be in everyones best interest to flip long for short to mid term. TLT showing signs of a potential bottom (at best a local bottom). Island bottoms are super bullish and SHOULD NOT be faded. Pick your favorite meme stocks and go all-in longs. I think this is a bigger deal than most people think, especially before earnings and GDP news. Obviously this could flip on a dime; however, if we see any continuation our of this in the next couple days, I'd get ready for a fairly large short squeeze. STAY NIMBLE FOLKS
My favorite longs are:
TSLA
COIN
AMC
Bonds are cheapHello friends.
This chart of the TLT bond ETF adjusted for both dividends and money supply changes has fallen out of it's accepted range and to a new all-time low. We think that this presents an excellent buying opportunity since the market has already hiked interest rates to right around what the federal reserve's terminal rate will be, and since you can collect passive income from the dividends while the Fed continues to hold rates at high levels. After the rates start to ease off in a year or two, the bonds will also rise in value to reflect this, which could present a chance to sell them for a far higher price.
Treasuries accelerating their decline from oversold conditionsTreasuries accelerating their decline today free falling from already historic oversold conditions on multiple time-frames.
Feels pretty broken to me, but that doesn't mean we can't break further.
On watch for a true dislocation/break down/panic on further weakness.