Earlier today I wondered if the very sharp "V" reversal signals in VXX and TLT might form a broader top for their declines which VXX did not as it moved down in line with yesterday's puts, however TLT as I pointed out earlier on its daily chart had formed a Harami reversal or an Inside Day, looked more like it was forming a larger top than just half a day yesterday like VXX. Now it looks like we have pretty compelling evidence that TLT has indeed formed a larger short term top which should make for a stronger/longer move to the downside which hasn't started to any real degree today unlike VXX which started right off the open.
All in all, this should make for a stronger TLT move for yesterday's puts entered at the same time as the VXX puts.
The Harami candlestick reversal pair of candles on a daily TLT chart, in western vernacular we call it an inside day.
Intraday TLT has been forming a bear-flag price pattern rather than just moving down, but I suspect this is creating a larger top that will support a larger downside reversal.
The 3C chart has also deteriorated further today as the flag has been forming.
This longer/stronger 5 min chart has also put in more deterioration today, again suggesting a stronger move down than if it had simply moved down off yesterday's half a day top.
And even the 10 min chart which showed no deterioration in the 3C chart yesterday has seen a leading negative divergence today.
Although TLT puts haven't put in any gains today unlike VXX, I suspect today's additional topping behavior and size will lead to a larger downside move than if it had simply moved down today.
This is still a speculative and short term position, but it should be worthwhile.
No comments:
Post a Comment