It's no secret that bonds have been the bubble du jour, but it seems like the bubble is finally popping. This intraday chart of ZB is breathtakingly toppy.
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Beautiful Gap Fills in Bond-Land
Weak Treasuries
Well, not a good day for me in the least. I'm down 1.74% as I'm typing this, and the overall market is up 1.2% (by "overall market", I mean an average of the SPY, IWM, and QQQQ). I definitely got snookered by the brief selloff after the Bernanke speech. It turns out that was a fantastic place to buy the bounce.
One of the few bright spots for me is my TLT short, which I entered earlier today. Please take note of the gap and circled areas on this multi-year graph.
TLT Spike High? (by Mike Paulenoff)
Based on my near- and intermediate-term work, the pattern and momentum configuration in the iShares Barclays 20+ Yr Treas Bond ETF (TLT) argue that the price structure hit a spike high this morning at 109.50, reflecting the flight to safety surge in buying of US Treasury paper despite the puny yields.
While this morning's high might represent the first of multiple "high-spikes" in the 109-110 area, I am willing to take a small, initial countertrend position long the ProShares UltraShort 20+ Year Treas Bond ETF (TBT). That said, to get preliminary confirmation that a meaningful high in the TLTs has been established, the price structure needs to violate and sustain beneath 107.50.
From a yield perspective, taking a shot at a countertrend position in the TBT's has technical justification. The most recent round of ugly U.S. economic data has pressed the 10-year yield to a new multi-month low at 2.42%, which satisfies the measured downside target off of the 10-month top pattern that broke down at the beginning of July 2010.
Originally published on MPTrader.com.
New Short (and by far the biggest…..)
