TBT (inverse TLT) pulling back to breakout support

The breakout of the base in TBT (which is a breakdown of the top in TLT) set up a rally to the projected target created from the measurement of the first green triangle you see on the chart. This breakout pattern could very well go another measured move from the breakout level projecting up to the "MAX TARGET" within 23 days from the breakout of the range labeled "DAY 1". The small green rectangles are the previous day's range subtracted from the previous day's close. "DAY 1" is the first day where the market jumped away from the price cluster of 14-23 days and began the trend. Realize this is a leveraged instrument and it moves more than the underlying TLT. It would be roughly the same to short the TLT, but you would need more capital to set up the trade.

I believe that next week is when this trend has the chance to really take off. The reason being that it will be the start of a new quarter and that is when new decisions get made and they get made pretty aggressively especially at the beginning of the quarter. Bonds have had a bad quarter, but very likely next quarter they will have a far worse quarter as capital shifts out of bonds and into equities.

By: Technical Tim
11:17AM March 28, 2012