Monday, July 15, 2013

TLT - Still Interested

So as I have said for a long time, when the time is right, I'm interested in TLT long or some leveraged version of that, the only two long leveraged versions are TTT and UBT and if you take a look at their volume, you tell me if you'd touch them. Ideally I'd like a 2x leveraged ETF, short TBT maybe? Long dated calls?

Here are the charts, if I knew what asset I'd like to use, I'd consider starting to build a long position in TLT (20+ year treasuries), I do think we can get it at a little better prices, that is why I'd consider this a phase in, but timing wise, I'd like to get in to some exposure within the next day or so.

 TLT (green) vs the SPX (red) and as you can see on the 10 min chart there are a few areas they trade together which seemed/seems strange, the very last move down in TLT was sharp and hastily, but firmly put together, TLT down gives the market/SPX an upside lift. Something went on here as I showed last night. However if we take a look at the larger trend and this is the one I'd like to be in position for...

 The issue of "Trading together" is not an issue at all, in fact this chart makes good sense, this is also the timeframe I'm considering for a position so a longer term position in TLT, I just need to find a way to leverage it up a bit, a 2x leveraged ETF would have worked, but volume is too low. Perhaps some long expiration calls, in to 2014?

This is UVXY, when it and/or TLT move down they help the market move up, they are also both flight to safety or safe haven/protection trades. Look at the UVXY/VXX 5 min chart, the area of the first divergence I showed several times and last night and the leading positive.

UVXY 15 min chart looks very similar, very strong as it looks ready to make a long term move to the upside.

 I know the timeframes are a bit different, but TLT 30 min looks a lot like VXX / UVXY. It even has the same two divergences where it looked like we'd get the initial reversal we originally expected.

TLT 5 min as shown last night shows how fast distribution worked in and how deep, it was already at the area where price gapped down too before price even moved down, so massive distribution, something changed really fast there and across the market, this of course is market positive.

 The same on the 10 min chart, all the way down to where price gapped, a true leading negative divergence. Now there's a leading positive in place.

 The 15 min also went leading negative to the area price gapped to and in 2 days, that was a huge and fast move. However we are also positive in the area, it's like someone knew or needed to push the market higher, but knew it was a ginger-bread house and accumulated TLT almost as desperately as the distributed it.

As a longer term trade, this is why I have NO problem starting a TLT long here, however, I do think it will pullback a bit more.


The long term 4 hour trend tells you everything you need to know, there are only 2 main divergences on this chart, the current one says TLT is a nice looking long prospect.

 Intraday 1 min looks strong in the same way that many of the market averages and stocks look week today.

It's only this 5 min chart that suggests a pullback to me, otherwise as soon as I figure out which asset I like the most for TLT long, I'll likely start opening the position.

Thoughts? I'm leaning toward 2014 calls.

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