The bull trap is similar to the "point of maximum optimism" setup that I have pointed out on several occasions here at Tradingview. There is essentially a heavy resistance area that has set up at current prices where sellers have stepped up to the market and supplied all the bonds that the buyers could absorb. Note the dramatic declines off of extended advances. The "trap" is set up when the market creates an "up trending pattern" that essentially just brings the market back into the supply zone, but gives the illusion of a new bull market up-leg. Once this "last leg" is over, then the trap is set and a decline is underway with high probability.
Risk can be lowered to 2 average ranges instead of 3. Just my "sense" of the current situation. I will lower the stop to break-even after 5 trading days.
Cheers.
Tim 2:24PM EST, Tuesday, November 20, 2012
Comments
timwest
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It's nice to revisit this chart. It took more than a few times to nail the top in the bond market though. I'm wondering now if this little double-bottom in Aug-Sep isn't just another "looks like a bottom" pattern that is a "bull trap". Until I get some more clarity of how I want to trade it - I'll just sit on the sidelines.
timwest
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Close enough to the target to close this trade.
The time and direction are on target, just the magnitude was a bit off.
Thanks "fiscal cliff" for setting up the trade.
QuantitativeExhaustion
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yep.. you are good with the chart predictions. I would be very interested to see if you bullish or bearish after March.
timwest
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Hey JR - I keep eyeballing TLT down here for a decent move up. It has been quite a bear market in TBonds and trillions in lost capital... What are you thinking here too?
QuantitativeExhaustion
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right on the arrow...market recovery, t-bond sell-off?
timwest
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Thanks JR. I'll start putting some charts together.
Algokid
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Nice job Tim !
timwest
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This TLT forecast is moving along on the forecasted path. Lower prices ahead.
11:49AM EST, Thursday, December 13, 2012
QuantitativeExhaustion
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right on target
paulyberndt
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Your target of 119.28 is spot on. I am a Ichimoku trader and on the monthly the Ichi is showing 119.43 as a possible target with the Tenkin Line.