#TLT Trading The CorrectionIn this update we review the recent price action in the TLT Bond ETF and identify the next high probability trading opportunities and price objectives to target
PAST PERFORMANCE NOT INDICATIVE OF FUTURE RESULTS
TLT trade ideas
20 year treasury bond TLT CollopseThis Trade setup is called a 333 trade because it has 3 legs down and the 3rd leg has 3 bars down on these 3 month charts. I'm expecting a large final bar down over the next few days/weeks. It may end on 3 days of drop like it did on Black Monday, where the 3rd day had a 20% drop or it may last for a week or two.
view on TLTAs per request,
here's my view on TLT.
Looks bullish for now, but it may not hold up.
could see it want to take the low for longer term bullish stability to come in.
I am not a TLT trader, just applying my techniques to TLT to share insight/ perspective for friends.
TLT At The Warning Line SupportTLT is currently at the Warning-Line of the white Fork.
We can see how price reacts to the Center-Line.
A classical retest that played out textbook like.
Then the same at the BASE Line of the Action/Reaction Set.
If TLT cracks the WL, then the next stop would be the Reaction line.
All this is in line with the destroyed Bond Market.
And that's the reason why I would short TLT on a rebound.
Peace4Theworld
Opening (IRA): TLT October 20th 93 Short Put... for a .74 credit.
Comments: Adding in an October rung here in 20 year+ maturity paper after taking off my July rung. 30-day IV remains higher than SPY.
Am fine with getting assigned shares if that happens. Prior to COVID, I had a rather large TLT covered call position in my IRA, but felt compelled to take profit on it at or near COVID highs and have been looking to get back in ever since then.
$TLT - close to bottomingNASDAQ:TLT : There is a possibility that TLT might have bottomed or is close to bottoming. Why?
Take a look at the highlighted time frame on the left. Back in October 2022, TLT formed bullish divergences with MACD, RSI, and William %R.
Now, look at the highlighted time frame on the right.
We are seeing the same thing happening.
If TLT has further to fall, I think $82 would be it.
Upside targets:
$88
$92
Downside risk:
$82
Failed to close below $84Double bottom at $84 on TLT high volume. Inflation is easing and the probabilities are stacked in favor of more disinflation. The mainstream narrative is no landing/soft landing whereas all the economic data points towards recession. Taking a $10k position filled at $84.28. Stop trailing $2 will add to the trade if it ever gets above $90 and holds on volume on the retest.
#TMF >3 month PutsHow sustainable is a 3x leveraged 30+ year us treasury bond fund #TMF when short term borrowing rates ( i.e. "the leverage" ) is higher than the long term rates it invests in ?
Lock or FloatHigh probability of interest rates reversing and ultimately lowering. With my years of experience in the mortgage industry and a deep understanding of market trends, I'm excited to provide you with valuable insights into the current rate landscape.
I'm here to highlight the promising signs of rates making moves to bring us out of the 8s, out of the 7s, and back to the 6s. Through my expertise, I hope to give you a better understanding of the factors driving these rate fluctuations and the potential benefits for borrowers and the housing market as a whole.
Bearish on TLTI decided to take a closer look at this ETF when an analyst wrote an article commenting that it is time to get bullish on 20+ year treasury bond etf, with strong support in the 85 region.
This etf has been on a bearish trend since Mar 2020 and I would label this trend as an impulsive wave. As depicted in my chart, TLT is now on the path of wave v of a third wave extension, with a target price of 68. This target price is equivalent to a 2.618 extension of wave 1. Upon reaching this target price, a reversal will bring the etf to a target price of 108 as wave 4, a 0.382 retracement of wave 3. Most likely wave 4 will be a triangle or zigzag before heading finally down to region of 70 to 59, thereby completing the impulsive 5 wave pattern.
Navigating Bonds and ETFsSimilar to cryptocurrencies and equities, the bond market is often considered speculative. While fixed-income securities such as bonds are generally perceived as a safer investment, recent volatility has cast doubt on this assumption for some investors.
Bonds:
In general, the price of an existing bond exhibits an inverse relationship with its yield. When interest rates rise, newly issued bonds offer higher yields to attract investors, making existing bonds with lower fixed yields less attractive. Consequently, the prices of existing bonds with lower yields decrease to align with the new, higher market rates.
This is why ETFs such as NASDAQ:TLT tend to decline as interest rates rise.
Speculation:
Considering the possibility that the Fed is nearing its interest rate cap ECONOMICS:USINTR , it may be worthwhile to take a closer look at such ETFs.
Currently, with the Fed rate at a 22-year high, the TLT ETF is trading near its original inception price from 21 years ago. This positions it within both a horizontal and monthly trend support zone.
When combined with the recovering yield spread and past market movements, one could speculate that a bond market recovery might be around the corner.
While speculation undoubtedly plays a significant role in these assessments, one could closely monitor the upcoming Fed interest rates decision to see if this is worthwhile
Weekly ChartM Pattern that is in between the 1.113 and the 1.272 of the first leg up.
Oversold. Oversold conditions can last for extended periods of time.
I will watch and update.
Bullish harami today.
No recommendation
The Epic Bond Capitulation - Where's The Bottom?Hooo boy, all those fund managers who were telling people to go balls to the walls on bonds earlier this year assuming interest rates would be lowered were truly addicted to the era of easy money. Some people have lost a lot recently. And it seems people are trying to now catch the falling knife (including myself, as I will explain).
In the above charts, you can see a popular long term bond ETF on the left (TLT), and long term bond yields on the right, inverted. The reason I inverted bond yields is so we can see more easily how the charts correlate. Looking at these two charts side by side, one can make a guess as to when bond prices may begin to find support. Right around here is a solid long term zone - but there is indeed room for TLT to drop into the mid-high 70's, or even the 60's if yields head towards 9-10%. Traders should be prepared for that.
Yields may indeed continue to push upwards past 5%. The U.S. economy can handle high interest rates. It's just that this is not what we're used to. It's also not necessarily true that a crash MUST happen soon, even considering I have been bearish on traditional markets for the last few years. But maybe that COVID crash was really it, at least for now. Sure, the amount of consumer and national debt is concerningly high. I don't think anyone would be surprised if the market had a huge meltdown, given current economic conditions. Under current circumstances, the likelihood of a black swan market event only increases. However, people would probably be surprised if it did extraordinarily well, and if bond yields continued way up. This is what's often called, "Climbing a Wall of Worry."
There were indeed periods when yields were above 9% and the market still grew. We're just not used to it, so all this repricing must occur. And it's quite the shock.
It's hard to parse out exactly what's going on. But it's possible we are about to finally see "authentic" growth from the stock market, meaning that it increases DESPITE tightening monetary policy. This is actually healthier market growth. In the midst of this, we'd also ideally like to see improved infrastructure and pay increases.
Now of course, if SPX heads below the recent lows, markets could be in trouble, but that remains to be seen.
I have begun entering TLT here, but I do acknowledge that there is further room to fall, perhaps as much as 30% from current levels. The volume looks like capitulation, so even if they fall further we may be due for a relief rally.
As always, this is not meant as financial advice. This is for speculation and entertainment only. I am really winding down my posts on here. If you'd like to stay updated about what I'm doing, please feel free to reach out.
-Victor Cobra
Catch a falling knife, go long TLTTLT is back at prices not seen since 2007. There's a large number of short sellers in profit that will need to buy TLT to close their positions. It's a scary chart but I think it's time to sell treasury bills and buy each new monthly low on TLT on the basis that we're locking in a good long term rate and that inflation isn't going into hyperdrive and long and short interest rates are inverted and have a nearly perfect record of predicting economic slow down.
TLT to continue cratering into October before bouncing.TLT has seen nothing but red for months - that won't end as it continues to fall and should hit 90 in the next month. This could trigger a credit event or perhaps the data starts coming around that shows the Fed's October meeting will be dovish and slowly return the price toward 98-100 by February.
#TLT some serious volume and exhaustionKeeping an eye on TLT here - some decent volume coming in with exhaustive demark 13 signal. Let's see if it manages to put some sort of temporary bottom in here
$TLT back below $100, sends it to $88If NASDAQ:TLT manages to break below $100 here, it's next and final target would be $88 before upside.
I think if this happens, risk assets will take a nose dive lower (just like they did last year).
TLT ~ Weekly Swing Chart (Oct 2023)NASDAQ:TLT chart mapping/analysis for med-long term swing trade strategies.
Long Bonds are showing monthly buy signalsLong Bonds are showing monthly buy signals. This suggests a reversal in interest rate hikes within 1 to 3 months. Bonds are looking like a good long term buy at these levels.
TLT Retest of $90, Fed lost ControlBearish Flag formation to be resolved in ~ 3-6 months, as Fed sets a stage for FedNow and CBDC via a control demolition of regional banks (Asset Liability Mismatch) to the benefit TBTF banks.
The Day Ahead: GDXJ, FXI, EWZ, GDX Premium SellingIt's Friday, and the last trading day of September ... .
Here's what's at the top of my IV screener in the exchange-traded fund space:
TQQQ, IVR/IV 23.3/64.2%
GDXJ, 22.7/36.4% (2.52% yield)
FXI, 12.5/33.4% (2.26% yield)
EWZ, 11.1/31.9% (10.9% yield)
GDX, 26.0/31.5% (2.23% yield)
You'll notice that everything is still pretty much in the lower one-quarter of the IV range over the past 52 weeks, but there are a few instruments have popped above 30% 30-day. If you're big on divvies, EWZ stands out, but one potential drawback for some may be that it only distributes biannually in June and December.
In the broad market exchange-traded fund space:
QQQ, IVR/IV 22.2/22.3% with the shortest duration <16 delta strike that pays 1% of the strike price in the December 15th (the 321, paying 3.30 at the mid)
IWM, 21.6/20.8%, with the shortest duration <16 delta strike that pays 1% of the strike price in the December 15th (the 162, paying 1.72)
SPY, 22.1/17.1%, with the shortest duration <16 delta strike that pays 1% of the strike price in the January 19th contract (the 385, paying 3.91).
You can naturally opt for shorter duration and be more aggressive with your delta, with the trade-off being that you may end up being assigned shares more frequently or have to manage in-the-money's via roll, which is not the funnest way to manage a tested short put, depending how deep in-the-money it is. (I'm talking mostly about what I do strategically in my retirement account, which is short put/acquire/cover or "wheel").
Me Personally ... .
I pretty much mechanically put on the shortest duration <16 delta strikes paying around 1% in broad market (IWM, QQQ, SPY) on a weekly basis, so am going to do that today, assuming I don't already have rungs camped out where I'd want to pitch my tent with a secondary consideration being whether the contract represents a better strike than what I've currently got on.
And, in spite of the short term pain I'm experiencing in my attempt to acquire TLT shares at these levels, I'll probably also add in a rung (or two), since I have a maximal buying power that I want to devote to that position, and I'm not there yet. The probable result at the moment is that I will be assigned various lots at various strikes and will have to cover (i.e., sell call against) at various durations, some of which may be quite long-dated with my current highest strike at the 94 (in the November 17th) and the lowest at the 84 (in the December 15th). Naturally, were I to have followed my initial plan as to when I wanted to start picking up shares, (See Post Below), I would be "less red" ... .
15+ Years Worth of Gains Gone - TLT ETFFinancial markets prove people wrong over and over. I guess that's the point - trick as many people as possible into taking their money.
For example, investing in Treasury Bonds has always been seen as a relatively safe & stable way to grow wealth. Some people have found that ETFs in Treasuries offer that.
Well, the chart above sort of changes that perspective, eh?
While the rest of my post will explain the basics, like what happened and what we can learn, I actually do think this might be an interesting bounce play. Thus, I am watching it for a swing trade off the lows! Support line, anyone? Let's see.
Now onward...
The iShares 20+ Year Treasury Bond ETF ( NASDAQ:TLT ) has been a go-to choice to gain exposure to Treasury bonds over many years now. However, recent events have erased nearly 15 years worth of gains.
And it did not take long at all.
The culprit behind TLT's recent woes is the rise in interest rates. When interest rates go up, the value of existing bonds tends to go down. As the Federal Reserve decided to increase rates to combat inflation, TLT investors found themselves holding the bag.
The good news is that they'll still collect a good dividend over time, but for now, that's damage done to the core principle.
Want to hear a joke? Okay...
Why did the TLT ETF go to therapy?
Because it couldn't handle its ups and downs anymore!
Jokes aside, the TLT turmoil serves as a stark reminder that even seemingly safe investments can turn sour quickly.
Here are some key takeaways:
Interest Rate Risk: As we've seen with TLT, interest rate movements can have a significant impact on bond investments. When rates rise, bond prices fall.
Market Uncertainty: The markets are inherently uncertain.
Risk Management: Setting stop-loss orders or regularly rebalancing your portfolio can help mitigate losses.
Let's see what happens next.
I have NO position currently.
