Friday, April 30, 2010

Bonds - 3rd Break Out a Charm?

I want to bring your attention to the daily chart (below) of the exchange traded long bond or the TLT's and it's 3 break outs.

Break out #1 green - the break out occurred on Apr 21 thru the 90 level. $90 was obvious to even a boob like me but as I watched TLT trade the concern I had was that volume accompanying the move thru 90 was VERY suspect.

Break out #2 orange - the break out occurred on Apr 27 thru a short descending trend line just above 90.75 ballpark. We backed off to close the day but volume was SENSATIONAL. The next 2 days we got a consolidation that hugged the previously mentioned descending trend line from above.

Break out #3 yellow - is today. the break out is taking out the highs of Apr 27 and also taking out the cluster of highs that formed back in mid Jan-early Feb. Today's volume is going to be above average so it looks good so far.

Now here is where things get more interesting and can clear up some doubt. Have a peek at the weekly chart (below) of the TLT's

Now I know we haven't closed yet but look at the move here on MONSTER volume.

Based on this, I am getting long 1 unit of the TLT here at $92.05 with a stop at $89.68

Good speculating to you all and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit Direxion Large Cap 3X Bear ticker BGZ @ $19.34
Long 2 units Direxion Small Cap 3X Bear ticker TZA @ $12.06
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $60.50
Long 2 units Direxion Financial 3X Bear ticker FAZ @ $19.65
Long 2 units Ultrashort Xinhua China ticker FXP @ $42.45
Long 1 unit Ultrashort Real Estate ticker SRS @ $49.10
Long 2 units Direxion Tech 3X Bear ticker TYP @ $10.52
Long 1 unit US Dollar Bull ticker UUP @ $22.52 stop @ $21.97
Long 1 unit ishares Barclays 20yr Treas ticker TLT @ 92.15 stop @ $89.68

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