Trading Ideas
US Treasury note at critical juncture
Sat, 17 Feb 2018 20:07:23 -0600
Holding the neckline and channel last week. We could see a bounce here to $123 with street sentiment that rates are going higher. Short term: bullish Long term: neutral
Short TLT - Attractive Opportunity
Fri, 16 Feb 2018 13:02:11 -0600
With US rates rising significantly in the past couple of months - how should a trader play this Being structurally short $TLT offers significant upside with a Put Butterfly Spread We have outlined trade which can be accessed on profile however a summary is provided 2 Month Put Skew is 3.62 standard Deviations above its 1 year mean 2 Month Volatility is 1.58 standard deviations above its 1 year mean TLT (Long US Treasury Bonds) is very vulnerable due to above trend growth, increasing budget deficits, the potential for a return of inflation and Fed Tapering Interested in all thoughts & analysis on our idea.
TLT Low risk entry
Fri, 16 Feb 2018 09:01:29 -0600
We can see a solid resistance @117+. Entry: 118 Stop : 116.5
Short Bonds
Thu, 15 Feb 2018 12:39:13 -0600
I'm adding to my short bonds position here now that I have another favorable stop above consolidation available. Short TLT via 115/124 put Diagonal for $6.07. Max Risk: $607 Max Win: As of now, it's $293 Target: Price at $115 Stop Loss: Price at $119.50 long 124 put: 80 delta short 115 put: 22 delta I'll likely continue to roll the short 115 put against to reduce this basis when I can.
Bonds are testing critical support zone - Neck line of H&S
Wed, 14 Feb 2018 12:44:24 -0600
Treasury bonds are falling of a cliff following a bearish breakdown (see in the chart) Now testing an important support zone - Structure and also the neck line of a weekly H&S pattern That's a critical support zone! In case that it will fail to hold, we can see massive selling in bonds.
TRADE IDEA OF THE WEEK IN TLT!
Mon, 12 Feb 2018 17:12:39 -0600
This might now be an exciting play, but we really like the play with the struggles that the bond market is showing. We have bought some puts on this Treasury Bond ETF TLT. We entered around $118.58 and this is what we're seeing: -Bond market is struggling overall as of late -Weekly Squeeze has fired to the downside, which can cause large moves -Volume has really increased over the last 4-5 trading days -Overall weakness in the price movement We are hoping to hold this anywhere from 2 days - a month depending on price action but we average a holding period of around 8 days on these swing trades. We will let the price action determine our exit point. Best of luck to all!
Bonds are going to get slapped
Mon, 12 Feb 2018 01:24:17 -0600
It's pretty late, I'm just catching up on some work I didn't do. TLT correspond generally to the price and yield performance of the long-term sector of the U.S. Treasury market as defined by the Barclays Capital 20+ Year Treasury Index. Fridays had a mid-day 'rip your face off' bounce from the lows in the overall market. I wasn't able to catch it by the time I got near my platform. Next session it will go down is my stance. I'am expecting $177.10s to at least be pierced. Could go much lower during the initial balance.
SHORTING US GOVT BONDS
Sun, 11 Feb 2018 14:12:23 -0600
Let me warn you now, this is not a fundamental or technical analysis based trade. This is a speculation on my behalf based on a simple theory. As the US Federal Reserve continues to rise interest rates up to 3x this year, is it time that a true bear market in fixed income has come to fruition£ Are the "safe" government bonds becoming one of the worst asset classes to be in£ I would say it is up there, with the exception of tech and anything blockchain. It takes some basic algebra to figure out if bond prices will go up or down based on interest rate increases or decreases the PRESENT VALUE (Price) of the bond. In short, interest rates rise and prices fall, interest rates decrease prices increases. For most bonds, depending on default risk, upon maturity you are paid the face value. You have security in your principle if you can afford to wait. Another interesting component is that the longer the yield to maturity of the bond, the more sensitive to rises and falls in interest rates. So with some Bonds 101 behind us, let me give you the trade. I propose that based on the projection that if interest rates rise three times this year as forecasted by the market, long term bond prices will decline in the short term (1-2 years), so I propose that, given the sentiment in the expectation of further increases in interest rates we short #TLT, a 20+ Year Govt Bond ETF sponsored by iShares. Some things to be wary of: If equity markets continue to fall, say to 20% down from highs, this could cause the federal reserve to STOP increasing rates. (speculation on my behalf) As well, if the markets do fall and firms start to go under (smaller scale 2008), don't be suprised if they start to bail firms out, look at how rich it made the government after 2008... Dodd Frank requires banks to be able to withstand up to 10% unemployment, $383 Billion in loan losses, as well as " heightened stress in corporate loan markets and commercial real estate." A fianancial collapse is probably not out of the question, but I'm saying that if any of the above scenarios start to play out, this trade would be out the window. So yeah, bold bet for sure, but might be something to think about. Please, tell me where you think I could be wrong.
DVG + LVL
Thu, 08 Feb 2018 11:11:33 -0600
-only above middle/median (on it now
TLT we had a bond inspired EOD rally, Careful
Tue, 06 Feb 2018 18:59:57 -0600
BONDs decided to nose dive after hours. This suggests equities might open light in the morning.
TLT: Engulfing bullish
Tue, 06 Feb 2018 01:06:00 -0600
See the graph.
The Next Great Collapse — BONDS! (TLT)
Mon, 05 Feb 2018 12:30:47 -0600
Hi friends! Today, I'd like to step away from crytpocurrenceis, to review a market has maintained my interest — bonds! Specifically, we're reviewing the weekly chart, for the TLT, which is the 20 year T-bond ETF. Personally, I have held long term put options against the TLT, for a couple months now. As you know, I don't particularly care too much for fundamental news, but in this case, it is important to note that there is a massive bubble in the bond market. Unless you've been living under a rock, you know that the Federal Reserve has maintained an ultra-low interest rate policy, artificially suppressing the short-term interest rates, to stimulate economic growth. This, coupled with unprecedented Quantitative Easing, was the boon that rescued U.S. markets from the Great Recession of 2008. With that said, you can think of bond yields and interest rates as opposites on a teeter totter. When bond yields rise, interest rates fall, and vice-versa. We know that the fed is now steadily increasing rates at 0.25% a hike. As the fed continues to hike rates, the artificial pressure will be removed, and yields should rise sharply. As the yields rise, prices will fall, thus pricking the bubble that the fed was forced to create, in order to save the economy. That's the thesis anyway. Let's compare that to what we see on the chart. Looking at the chart, you can see that a huge head and shoulders pattern was formed, which correlates well with the time period in which the fed began to hike rates. In the right shoulder, we can see a head and shoulders formation that has sent TLT lower, completing the shoulder and breaking the ever-so-important uptrend support level (in red) which has been intact since 2011. As someone who is short, this is exactly what I want to see. Keep in mind that this is a weekly chart, so each candle represents a week of trading. On the MACD, we've got a bearish crossover, and sell-side volume is beginning to dominate the chart. Technically, the neckline of the head and shoulders pattern hasn't broken yet. You can see that it's the black trendline in the pattern. If/when that falls, the next stop should be the 50% retrace, then the 618 below that, and then my ultimate target of $101. Given the size of the head and shoulders pattern, a correction to it's full potential could send prices into the $80s. Personally, I am long the Jan 20 100 strike puts. Going forward, we may see TLT test the bottom of the rising red trendline, to confirm it as new resistance before heading lower. This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone! ***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.*** -MPC loves you- -JD-
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