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Today’s rally in the general markets surprised me in point total but the volume is typical of holiday trading and nothing really has changed in my opinion. I will hold off taking any short positions until the new year just in case bulls want to push this market higher so the main sectors I’m going to focus on are gold, silver and bonds. Since tomorrow is a shortened day I’m going to hold off doing extensive research and save that for the new year.

This brings me to TLT, which has one of the strongest momentum charts out there and you can see it started off the day in the red and spent the rest of the day moving higher on increasing volume. This is a good sign that this issue wants to head higher. Looking at the chart it looks like it’s moved too much to take a long position, but these chart patterns have a tendency to move a lot higher than anybody can expect.

2 Responses to “TLT Has Momentum”

  1. McLarty Says:

    Not sure if you put a trade on, on this yet one yet, but just want to let you know TLT, TBT, PST and others, are going to be more volatile the lower yields are. And, what you may be interpreting as "momentum", is actually just a side effect of bond duration…but I'm the first to admit, technical analysis is not my forte…so the chart can be showing "momentum", but the snap back, when it does, won't be similar to how a stock collapses from the end of "momentum".

    Anyway, all the best,
    Jeff McLarty

  2. Jeff Pierce Says:

    At the time of the post I was focusing on gold/silver purchases and did not get into TLT. It never triggered a buy signal according to my system and broke down soon after so it's off my list for now.

    When I say momentum I am purely looking at the chart and well, to me a chart is a chart and can be traded the same as any. To be completely honest I'm not all that familiar with bonds so I probably would not have traded it, and was just pointing out some simple observations I had made at the time.

    Take care

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