If bulls are unable to get traction at p2=138.67, more slippage to 136.75 will become likely. We haven’t done any bottom-fishing in this vehicle in a long while, but a hit at or very near D=136.75 would warrant it, so stay tuned. We could use call options if the target is actually achieved, but the obviousness of the pattern argues against it. Regardless, a tradeable low is coming soon that could mark a pause in T-Bonds’ murderous, two-month slide. My forecast for 3% on the long bond suggests, however, that there would still be more downside to come. ______ UPDATE (Feb 10, 2:21 p.m.): A fall to at least 135.41 is now all but certain, given the initial, decisive breach of p=139.89. I didn’t see this initially because my imagination was not quite that bearish at the time. Here’s the chart.
TLT – Lehman Bond ETF (Last:137.00)
