We’ve been discussing Bonds lately and rightfully so as the fate of the entire economy awaits the direction Bonds will take at this proverbial important fork in the road. Although we could go long TBT (the inverse ETF of TLT) I find this TLT pattern to be much clearer as the b-c is short in duration, violent and of course single bars.
Just like a good driver will always watch for activity much farther down the road than what’s immediately in front of the car, a good pivoteer will look at how things could potentially play out and be prepared to enter a trade if such a scenario came to fruition. Ideally we would get a bounce in TLT and take us close to c at which point you can look to hop on board an a-b-c pattern down or just mechanically get short. If you are looking to do something fancy with options (perhaps a vertical put spread?) look for advice from our resident options guru mavin 1 on how you might play TLT short.