TLT /30 Year Treasury Bond Update

This is a broad concept that falls under a head fake or more specifically a channel buster. I did close TLT Call positions on June 30th , Closing TLT July 17th $117 Calls - Looking to Re-open at better price for a +46% gain, TLT Follow Up / Update so the trade wasn't that bad.

That said, it isn't the trade I have hoped for yet which is why when I saw recent negative divergences in the charts, I closed the other part of the position which was essentially a 2x leveraged long TLT position created by shorting TBT, it was closed Tuesday July 7th, Closing TBT Short - Essentially TLT 2x long, on additional divergences and early warning, closing the entire position for now until the charts come together again.

As for the bigger picture trade...

 Looking at the daily trend of TLT, 2014 was a strong year and Treasuries outperformed equities. We had confirmation on 60 min charts throughout the year until about November when things started to change. Looking at the price trend, everything was fine at the green arrow. At the yellow arrow price started to peel away from the long term trendily which is always a warning sign and at the red box, price peeled far away from the long term trendily, this seemingly bullish move is almost ALWAYS a red flag in any asset because  it''s a major change in character and changes in character lead to changes in trends. Besides, we already knew long term 3C charts weren't confirming by that point and that it was a dangerous area. I believe we closed our TLT long within a day of the ultimate top/high.

 Then comes the Channel buster of the trendily and a base under it. I've been expecting this base to pull off a counter trend rally back above the trendily squeezing the thick short trade in Treasuries before heading down to a new low, a counter trend rally. We can see micro examples of the head fake concept in the small rectangle base. Note the stop run head fake under the rectangle's trend line at the small yellow arrow creating short squeeze momentum that blew TLT through the rectangle's top, creating breakout buying momentum that fails and snowballs as price falls back below the resistance trend line. These are a micro version of the broader concept I've been looking for in TLT,  but until the charts reset, I took ALL TLT risk off the table at a decent gain and have the luxury of waiting for TLT to prove itself to me again before entering a new position.

The 60 min chart shows the longer trend break from highs, distribution is clear and then the base area with a positive divergence that looks to me could support a counter trend rally/ head fake move up before failing back down, 2 nice long term trade set ups.

 The 30 min chart shows the same trends, just with a bit more detail.

And here was the last negative divergence at the highs in which the last of the TLT position was closed. While the negative divergence on both this chart and the 30 min above suggest the divergence was on the 7th and 8th, but we actually had earlier warning.

The more detailed 5 min chart showed trouble in the uptrend earlier, it just became actionable on the 7th which was an excellent exit considering price action since, The yllow area is the head fake/stop run below support that led to the move above the range which is where we closed the last position. Note the divergence there, leading negative and still hasn't recovered. TLT will need to move sideways and put in a new base/reversal process off this latest move down before I'd consider re-opening a long position, but I think it's a possibility.

 The 3 min trend gave us even earlier warning and is in line right now, which means until it turns lateral and starts putting in positive divergences, I have no reason to re-enter the trade at this point.

 The 2 min chart showing negative divergences, but...

The 2 min chart also showing a positive trend, it just needs to build at least out to the 5 min chart.

As for /ZB- 30-Year Treasury futures, here are the charts.

 The 3 min chart negative with price following and a small positive divgerence, not enough for a new entry, but definitely worth keeping on the radar.

The 10 min chart's trend. Again there's something to work with, but just not quite there. Patience is the hardest part of a trade set up, You have to remember that accumulation and distribution are not events, they are a process.

And the 30 min chart with a hint of some positive work starting, however at the longer/stronger 60 min chart below...

We are in line. I'd like to see this chart positive before looking for the counter trend rally trade, we'll keep this on the watch list, I still think it can do it, but my opinion is not objective evidence.