After such a steep and brutal sell-off, the technical picture for TLT in the longer term still remains intact. This move that began in 2014 will not end like this, what with interest rates at historic lows all over the world. The FED can claim to hike in Dec, but I never focus on what they say, but rather on they do. Just try and remember what they claimed to do at the start of 2016 ... can anyone remember the call for 4 hikes in 2016? Which then became 2? And then now, it seems we will be getting 1 in Dec? My assertion is higher prices for TLT in the days and years to come. Great opportunity to go long TLT with the market front-running the US Fed.
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Stock market still powering ahead, but TLT seems to have halted its rapid descent. A short term bottom could have formed for now. The risk-on event is 5 Dec, when Italy votes on the referendum ( read this for more info - bit.ly/2eZOtBl ). What I would like to see is some sideways action between now and the 5th and then a strong move higher with good price action.
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Looks like a bottom is in for now and TLT may be ready for a bounce to 119.50 and then 121.5. I'm vested and long at around 117+ having bought some call options to expire in March 2017, strike 117.
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Still sitting on a nice profit on my TLT calls. Target is 121.75. Will close all positions then and leave 2 March calls at strike 117 for any follow through moves.
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TLT went to as high as 122 and I've closed all my positions. Notice how it bounced off the blue dotted trend line resistance like clockwork? I'll redraw the TLT chart in a separate post to see if an opportunity exists for us to go long again in the new week ahead.
Comment:
Long TLT, stop at 119.
