Slope of Hope Blog Posts
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Based on my near- and intermediate-term work, the pattern and momentum configuration in the iShares Barclays 20+ Yr Treas Bond ETF (TLT) argue that the price structure hit a spike high this morning at 109.50, reflecting the flight to safety surge in buying of US Treasury paper despite the puny yields.
While this morning's high might represent the first of multiple "high-spikes" in the 109-110 area, I am willing to take a small, initial countertrend position long the ProShares UltraShort 20+ Year Treas Bond ETF (TBT). That said, to get preliminary confirmation that a meaningful high in the TLTs has been established, the price structure needs to violate and sustain beneath 107.50.
From a yield perspective, taking a shot at a countertrend position in the TBT's has technical justification. The most recent round of ugly U.S. economic data has pressed the 10-year yield to a new multi-month low at 2.42%, which satisfies the measured downside target off of the 10-month top pattern that broke down at the beginning of July 2010.
Originally published on MPTrader.com.
My favorite current short is XRT. I'm not in deep, but hope to be soon.
Fundamentally, we all know the consumer is dead or
dying. I have historically liked XRT
over RTH as I prefer not to have almost 50% of an ETF in 4 names (WMT, HD, TGT,
LOW). In my opinion, the whole “Wal-Mart
destination” play in 08 kept RTH afloat longer than it should have been.
Retail should have been taken out behind the woodshed by
now, but for the mysteries of the market (see also QE, HFT, and who knows what else),
had actually climbed to a new high this past spring. I made a decent chunk of change when the
rubber band had stretched that far north, covered relatively quickly, and have
been watching it ever since. As of
today, it finished bouncing off the underside of the cloud (on declining volume):
It appears to be breaking down:
The MAs appear weak; with the 50 looking to be on a
collision course with the 200 soon:
Short term hops aside, I see initial support at about $34.50
(given the timeframe, this could
coincide with the rising 400dMA). If
that breaks, I’ll be doubling down for the ride to the high $20s.