Nice Try!

A day or two ago I presented a nice setup in the 30-year treasury bonds to my subs. What has transpired since then is a great example of why I always always look at several time frames when deciding whether or not a trendline breach is a fake out move or not.

I don’t think you need a decade of hands on trading experience or a PhD in advanced mathematics to figure this one out. Clearly that long 60-min candle to the downside was designed to shake out anyone who got long at 142. Similarly it was designed to reel in a bunch of bearish Johnny-Come-Latelys who had hoped that bonds would go to hell in a hand basket. Fortunately there was support nearby on the daily chart in the form of the 100-day SMA. Yes, there is a reason I am using that one – I reckon you agree that over and over again it has proven to be of value.

And thus far the long trade I suggested appears to be right trade. Yes we would have loved to see this one drop all the way and turn into the short trade of the year but as usual we didn’t let greed get in the way of banking profits.

I would take partial profits at 143 as things are looking a bit dicey. However, if it can push above the 100-hour SMA then it’s got a decent chance of testing the daily NLBL near 144.

Below some Dollar musings for the subs:

If you have been long ole’ bucky then I think it’s time to scale out of your position – perhaps give it another day or so. I see some resistance looming ahead on the daily panel.

The weekly is not giving us much right now but the right panel shows us running head into the 100-month SMA. That ought to be good for some resistance, in particular as it roughly lines up with both upper daily BB lines. So a quick short here is probably permissible but remember that unless proven otherwise the trend remains up for now.

Here’s the Point & Figure chart to back up my outlandish musings. Note the Bullish Price Objective of 83.9 – oh please can we get there before I head out to Madrid? 😉