Long

TLT Long

Updated

TLT has pulled back to a very key trend line with additonal supports coming in below. On the hourly chart, we have positive divergence on TLT meaning we should see upside soon in the short term. Given the postures of the markets and how treasuries act as a flight to safety asset, it is reasonable to assume they will go up in price as stocks fall.

For this trade, I advise picking up TMF (x3 leverage) with a stop anywhere from 28.00 to 26.60. I also recommend scaling into the position with 2 or 3 batches comprising your total allocation that you are willing to invest.

Note

I forgot to add one more resistance level above: 143.69. This marks the July 2016 top with some more reactions taking place in August and September as prices sped off to a new high. I believe this to be the next target for TLT.

Note

On an hourly chart, TLT managed to extend the positive divergences as it came upon support from below. On the chart that I have posted, I have two arrows drawn and so it seems we will see a scenario that meshes with the second arrow on the right.

Note

TLT pulled back to another support level below (136.78) and formed a falling wedge pattern whilst extending the positive divergences. Still waiting on a confirmation to see some upside action.

Note

TLT has made a decisive move up after defending the next line of support. I am expecting at least a back test of the broken green trend line. If we manage to reclaim it and start using it as support again, watch out because treasuries might just be starting. Any move like that will likely coincide with a risk-off in the markets. For now a stop loss below the recent lows on TLT or TMF (x3) would be wise.

Note

TLT has reclaimed the big uptrend. This is perhaps an even more bullish scenario for TLT because its short-lived breakdown to the support levels bellow may have sucked in a lot of short positions who saw the general uptrend broken. Now, the shorts are feeling pain and could help fuel a short-covering rally as organic buyers step in as well.

Note

So far the price action has shown that we have in fact not taken back the trend but just back-tested it and pulled back to the alternative scenario's support level at 138.26. This is an objective opportunity to scale into TLT / TMF during tomorrow's price action as we're resting close to support.

BigMouse777

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