Correlation between BTC, TLT/JNK, and the Georgia Senate RunoffI've put this together after watching and reading over the weekend about the potential influence the Georgia Senate Runoff has on the market. Shown here is the correlation between BTC (or any other crypto for that matter) and the Treasury bond market to Junk bond index. People keep moving money into bonds showing FEAR in the market. Since bonds and the USDC has very little value due to the printing of the dollar, people are moving to Bitcoin to store their currency. IF the TLT/JNK were to break out we may see people move into Treasury bonds, Bitcoin, and liquidate all of their stocks.
This is just my hypothesis and it may change depending on the latest news.
TLT trade ideas
Bond etf year in review: O $139.69 H$179.70 L$135.91 C <=> $158Bond etf year in review:
O $139.69
H $179.70
L $135.91
C <=> $158
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ROLLING (IRA): TLT JAN 15TH 165 COVERED CALLS TO FEB 19TH 163... for a 1.00/contract credit.
Notes: A continuation of my TLT covered calls. (See Post Below). Rolling out at >50% max to the strike paying around 1% of the strike price, which is the 163 in February, currently valued at 1.66. I'm fine with being called away, since my last acquisition was around 110, and I think the buying power could be better utilized in something with higher implied volatility (30 day is currently 14.9% here). By the same token, that 1.66 for the 163 short call is 7.67 annualized or 4.9% as a function of stock price. That isn't hugely sexy, but when you add that to TLT's current yield of 1.56%, I could think of worse places to park my money for a little bit while I ramp up other positions in the new year.
TLT Bull Flag?? Balance your portfolios for Risk A stock account starting the 2020 year split 60-40, SPY to TLT would have a identical YTD return as a 100% portfolio of Stocks.
At the low the balanced portfolio would have been down 10% as opposed to 31% of all stock. Key takeaway in 1999 and 2007 it took the SPX 5+ years to recover, not 5 months.
Maybe smart to Diversify when stocks are going nutty high, not after the fact.
TLT - $155 Entry / Descending Broadening Wedge / $Breakout $160 0. This was easy money;
1. Descending Broadening Wedge shows the sentiment as we drift waiting for more lower rates, and stimulus.
2. Breakout from $160;
3. Heading to $180;
4. Value and Bonds looking good right now. Bonds + Value + A Little Tech for Juice.
Bonds and Oil May Show Reopening Excitement FadeFor over a month, the stock market has priced in a post-Covid reopening. Now there could be signs of that trend exhausting itself.
First and foremost is the recent double-bottom on the iShares 20+ Year Bond ETF. We cited downside in this instrument twice as it hit the top of its channel. But it made a slightly higher low/double following the last drop. That could suggest the intermediate-term downtrend, in place since August, has run its course for now.
There are also some potential positives for bonds as coronavirus cases and jobless claims rise. Even with a vaccine coming, the near-term employment picture is grim because restaurants and hotels appear to have maxed out their rehiring for now. Recent data from the Labor Department suggests they could start bleeding jobs again.
Second, there’s the Federal Reserve meeting on Wednesday. Officials have indicated they want to start buying longer-term Treasury bonds, which this ETF holds. Incremental mention of the new policy could help boost TLT.
Third, TLT just had a bullish inside week, which means its range is tightening.
Next are the intermarket conditions. Oil rallied on reopening hopes and the vaccine news. That could have been “buy the rumor.” Now that Pfizer’s shipping its drug, will investors “sell the news?” The fundamentals on oil haven’t been great either. OPEC+ has achieved little in terms of lasting production cuts. Inventories have also been higher than expected for several weeks. (Last week EIA’s total rose by 15.2 million barrels, the biggest increase since April.)
Finally, crude-oil futures have a outside day/spinning top candle stick today. The major energy ETFs like SPDR Energy and SPDR S&P Oil & Gas Exploration & Production also have bearish engulfing days.
Oil and energy tend to move in the opposite direction as bonds, so that could be another potential positive for TLT.
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