TLT Update

Taking a look at TLT's charts today it looks set for a pullback. The conventional thought would be TBT (the 2x inverse of TLT) would be an obvious play for a TLT pullback and I looked at the idea myself, however looking at TBT alone despite any TLT charts, this isn't a trade I would touch right now, it simply doesn't have the signals for a long position that I'd feel comfortable holding over the weekend much less any longer. That's the scenario of probabilities vs. a high probability/low risk trade.

As for TLT...

 This is the longer term trendily that TLT broke after doubling the performance of equities in 2014, can you guess why?

Bonds are typically a purchase made with carry trade assets and they were bidding them through 2014 until we started to get non-confirmation signals that we had previously seen almost all year. Shortly after that TLT topped. I'd like to see and I believe we can see a counter trend move in TLT above the long term trend line which with the bond liquidity would cause a massive squeeze, on the other hand if they are dumped in this liquidity, the opposite could happen.

This is why Yields which use to always be a Leading Indicator worked part of the year, then stopped altogether, and have been working recently. The variable seems to be whether or not the FX carry trades are being covered/closed or not, if they are then bonds are sold not as a risk off/flight so safety indication, but to close the asset that was funded with carry proceeds that are being closed as well.

It's an interesting market, that's for sure.

 This closer view of TLT's daily chart shows a small Doji Star bearish reversal candle on a gap so you could call it an evening star. Higher volume today than yesterday would make this reversal candle much more probable as a downside/pullback reversal,

 This is the intraday 1 min TLT chart not confirming the upside move in TLT.

 And the longer 3 min trend with the initial accumulation at the lows seen on the daily chart , confirmation and a negative divergence with today acting like the Chimney in a Igloo/Chimney head fake.

 However I suspect this is a pullback and if it is a constructive pullback, meaning we see accumulation in to a pullback, it would be worth considering as a buy or add to long position.

One of the main reasons I suspect a pullback and probably a constructive one is this 30 min TLT chart with a large positive divergence through the rectangle base area you can see on the daily charts above.

I'll set some price alerts for any downside move and keep an eye on the charts to see if it is a constructive pullback and when/where the best entry would be.

As TLT sits right now, it looks like a pretty high probability pullback. Strangely however the TBT charts are not giving the kind of confirmation I'd expect with positive divergences and if the asset (TBT) isn't giving signals on its own two feet, I don't consider that high probability/low risk.