53 0 2
Please forgive for the poor title choice. TLT             coming into contact with a multiple points of resistance: the 50d ma as well as the 138 line. Momentum a key driver of the rally in lower bond yields appears to be fading. Although I still think yields head much lower in the US, now is not the time to hold a big long position.
Comment: Once we get near the black trendline, I'll probably go back to being a buyer of TLT rather than a seller. We could get as low as 127, but I'd be happy to get in at that price again.
Comment: FOLLOW UP TO ABOVE COMMENT: After failing to break out to new highs, we could actually break the 2014 up trend line which would be incredibly bearish, but at this point, any upside in yields is capped by a Chinese deflationary global bust.
Comment: TLT has broken below the 200dma on waning downward momentum. I expect it to rally back and kiss the 200dma before perhaps falling further. ie, good time to take a quick profit before perhaps adding on further to the position.
Comment: 24 days ago I suggested we could hit 127 on TLT, and we did just that. Trump has won the whitehouse and the republicans control congress. It looks like we might get a lot more infrastructure spending than anticipated. Coupled with rising inflation, I'd have to say owning treasuries right now is a bad idea. Odds of a Fed rate hike for December I'd say are above 90%, which could push rates up till they hike, but after a hike, it may be worth buying bonds as the deflationary impact a stronger dollar will have on China's fragile economy will be worth trading.
Trade closed: stop reached: I'm getting out of this trade and going the other way, although in a small size.