timwest

20 Yr USGov't Bonds -TLT -Daily - Terminal Pattern?

AMEX:TLT   ISHARES 20+ YEAR TREASURY BOND E
487 11 8
This is an interesting pattern to jump out at me on the chart this afternoon:

What you need to see to confirm that this is indeed the pattern is to get a "RANGE EXPANSION BAR" to the upside tomorrow (or any day). ENTER ON STRENGTH with this pattern. Use the MID-POINT of the range expansion bar as another level to buy against on the following bars and target the high of the range expansion bar as your exit.

The upside potential of a falling wedge like this is a very sharp rally in very short order, so with German Bunds doing the same thing and leading us lower, we can take a cue from German Bunds (Symbol GG1!) to see what the situation is.

Today's little "inside bar" is potentially a harbinger of lost downside momentum , but the safest way to enter is above:
1. Buying on "range expansion" tomorrow.
2. Buy over today's high (but be willing to exit if we don't get a range expansion bar to the up-side)
3. Buy dips to the mid-point of the range expansion bar in subsequent bars (even "intra-day" if you see it)

Time will tell. This is a set-up only and the "ENTRY REQUIREMENTS" have not been met.

But tell me how you feel about this one because it seems rather dramatic. It would take another round of global Central Bank massive buying to make this squeeze back up.

I'm leaving this as a 'NEUTRAL' because the buy signal hasn't been triggered yet. Time will tell.

Tim 3:03PM EST 117.58 last TLT            

Note - Terminals are rare, but when they set-up and work, they pay for all of the small losers along the way. Keep that in mind - Terminals are a LOW PROBABILITY event, with HIGH PAYOFF. Every trading method has different risk/reward/probability parameters. Questions?
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Question is who is driving whom? Seems as if the last two German Economic Sentiment readings of late have been driving the sell off in Bunds and the rest of the field is reacting. With the next German ZEW rating scheduled for June 16 and some of the heat of the Greek debacle behind us perhaps a change in sentiment will be posted? The May readings for both the Euro ZEW and the German ZEW were in alignment (both negative of what was expected). Technically speaking, if this trend continues it appears as if the EURUSD has quite a lot of room to run before a balance is found. But fundamentally speaking, does the Euro not need a weaker price vs its counterparts to maintain a good growth rate for the group as a whole and overall success? Perhaps something is on the horizon that we are not aware will take place...like the addition of other Emerging Market countries to replace the losers like Greece. Gotta replace the revenue stream that was already baked in. Lastly, am I looking at this from the wrong perspective: when we see the Bunds selling off, especially in this heavy stream, isn't that a huge bullish signal on its own? Just some of the questions I have....thanks for your insights Tim. Always a pleasure reading your work.

+2 Reply
baerrus PRO
2 years ago
What is the price target for this pattern?
Reply
timwest PRO baerrus
2 years ago
Terminals retrace the entire decline in 25% of the time. Once you see range expansion to the upside, then start counting.
+1 Reply
timwest PRO timwest
2 years ago
The range expansion started yesterday - once yesterday's RALLY was larger than the previous DAY'S RANGE, it was a buy signal.... Not bad so far...
snapshot
Reply
Justiceisfalse
2 years ago
At a certain point, this will end up giving an ending diagonal if it keeps up this pace.
Reply
Justiceisfalse
2 years ago
Here is what I got
Gonna jam up
Reply
timwest PRO
2 years ago
It had the "overthrow" to the downside to create the puke-out phase of the terminal...
snapshot
Reply
IvanLabrie PRO timwest
2 years ago
Looks great for a long...
Reply
timwest PRO IvanLabrie
2 years ago
Gapped up 1% tonight...
+1 Reply
IvanLabrie PRO timwest
2 years ago
Post pattern confirmation :)
Reply
Incomplete pattern?
Reply
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