TLT - Retrace - Go Short

Symbol: TLT
[X] Enter
Duration: 6 Months
Direction: Go Short

TLT is the proxy for long term bonds/interest rates. A few days back I suggested booking some if not all your gains and waiting for the retrace to rebuild the position. Well, here it comes. Let's review.

The TLT had formed a long term head and shoulders pattern, broke the neckline, built out a bearish wedge and then broke lower which extended a bit further than I even expected. Given the way it plunged and volume expanded, it washed out a lot of players and set up the vacuumn for a good bounce and here it comes. Notice the gap just above. It should hit that gap and back off then try again. So there's two trades; one on the touch and then the retest. If all goes as planned, both will fail. The first is a quicker flip, the second is done with the idea that it will last longer.

Looking at the above chart, I've logged the multiple levels of resistance on the way back. Given the straight line move higher off the bounce, I suspect the move will play out as described above; sellers at the bottom of the gap; a quick flip and a retest. Hard to say right now what the retest will do. It could fill the gap and run to the second resistance level. Given the multiple layers all the way back to the neckline break, you can pick your spots to short into strength with the notion that rates are heading higher before this is over.

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Symbol = TLT Exchange = Russell
Sector = Closed-End Fund - Equity
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FUNDAMENTALS
Short Interest = 0.00%
Earnings Date = No Date Set
Beta = -0.26
PE = 0.0
1/2 yr Avg Volume = 1385900

Institutional
Buying = 0 Selling = 0 Holdings = 0.0%


EPS Current Quarter = 0.50
Previous Quarter = -1.03
2 Quarters Ago = 7.82
3 Quarters Ago = 2.27
4 Quarters Ago = 3.32
Percent Change Last = +148.70
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TECHNICALS
Stochastics =Bull MACD = Bear

TRADING CUBE TRENDS
TIME FRAME STOCK SECTOR Russell
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2 Weeks Bearish Sideways Sideways
3 Months Bearish Sideways Sideways
6 Months Bearish Sideways Sideways
12 Months Bearish Sideways Bullish
24 Months Bearish Sideways Bullish

Note how we have a very bearish stock pattern in a sector that is sideways.