I've been watching TLT (long term US treasury)and TBT (double short long term treasury) for awhile. I bought a couple hundred shares of TBT today for a couple reasons.
1) The 200, 50 and 20 day averages are all now sloping downward signifying a strong case for a bear market in this asset class.
2) TLT has bounced for a few days and is coming up against the 20 day average, which has rebuffed it twice since the averages bgan their unified downward slope. I think there are good odds it will continue to do that for the time being.
3) If I'm wrong, my stop loss is less than 1% away on TLT (94.80) which would be 2% loss on TBT (or appx 1/4% to my account). On the reward side TLT could easily drop 5% from here, which allows me a 5 to 1 reqard to risk ratio. A lovely set up.
I will add to the position if TLT forms a swing day high, which it could be setting up for. Notice how it went higher today than it has in it's current up swing. If it were to close right now, the low would be 93.48. If it closed lower than that in the next couple days without breaking today's high, it tells me that demand is drying up, and supply is increasing. A good time to short, with an easy stop above the 20 day average.
Here's the chart.
Shorting the above (TLT) buying TBT (double short TLT)
Fubsy
Covered TBT position with TLT at 94.80. Opened the trade again with TLT at 95.75 where ti tagged the downward sloping 50 and 200 day averages. I will cover at TLT 96.80 or will ride it down to TLT 90.00 appx.
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