Perhaps this is one of the confirmation signals that we have been waiting for.
For the last 1 month, the market has rallied. Despite the challenges in Eurozone, it continues to edge up further. The saving grace is the movement has become smaller.
$TLT has rallied back in August last year and consolidated at the current range since October.
At this moment, it looks like it is going to fall off the cliff soon.
The price has just dipped below the kumo support.
Leading kumo has twisted and is showing bearish confirmation.
We can also see that the Tenkan sen and Kijun sen has crossed and giving another bearish confirmation.
All we need is for the Eurozone issue to trigger a ‘mad rush’ into USD and that is sufficient to make /ES lower.
I believed TLT is overbought in the short term.
Looking at the parabolic rise and that it may break the support, I have a speculative Sept 110 PUT on TLT.
My bet is that it will break support within 1 week.
However, given the volatile market conditions and the bigger economic concerns from Europe, Libya etc, I am keeping a close watch on it with a tight stop lost in place.
Note: This is a speculative move on my part. There is no confirmation from the chart that TLT has turned bearish.
TLT has breakout of its high from August 2010.
It is in a very strong bullish move reminiscent to the move back in November 2008; peak of the crisis?
Not only is TLT move steeper this time round (moving upwards faster), it also seems more gappy.
Back in 2008, within 1 month from the November move, TLT starts crashing down.
Will we see a similar move this time round? If yes, what could be the cause? I can only wait for a confirmation. Before that, I will sit tight and avoid placing a speculative bet.