Elliott Wave Training

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http://wavepatterntraders.blogspot.com/2012/04/elliott-wave-training.html



Showing posts with label TBT. Show all posts
Showing posts with label TBT. Show all posts

Sunday, July 6, 2014

Elliott Wave Hedging (TBT)

At times there are various ways an Elliottician can count a number of corrections but its still part of a larger pattern.

A recent example was on TBT

I was looking at 2 ideas, the first idea was very bullish, the other idea was bullish but needed a bit more downside first before more upside.

Before


You can see that we could count a 5 wave move on TBT from 59.57, looking at TLT we could count the same move only it was down instead of up.


So i was looking for a corrective pullback, corrections are difficult to count let alone trade, so you can only really target specific zones.

"A small pullback here can setup for a move higher, although i can see the potential for a minor new low towards 61.00 for an alt idea in blue
So i can only suggest you hedge the ideas and buy a dip for the idea in black but add if a dip to 61.00, put your stops at 59.57

That way you are covered for both ideas"


I wrote the above with the chart on 20th June.

But we knew that the idea was wrong below 59.57 so members were advised to buy dips at 62.50 and if it dipped lower, buy and add at 61.00

By splitting the position in 2 parts it allowed us to "Elliott Wave  hedge" ideas.

As long as the stop was at 59.57 members knew where the risk point was.

You can see it did actually push under 61.00 but in the context of the prior 5 wave move from 59.57 it was still valid as a correction and pullback against that move.

Elliott Wave hedging is very common amongst good Elliotticians as long as you understand the context of the pattern its a very valuable tool.

Above 60.45 we remain bullish TBT, so rates are set to move to the upside.

After



Now being bullish is fine, but any good Elliottician will also be fully aware that this could actually be a simple 3 wave ABC bounce from 59.57 as shown.

If the market struggles to move much above 65.00, it could suggest some weakness, if it reverses and pukes hard back under 61.50 i would say that's a big warning for the bulls on TBT.


Sunday, September 16, 2012

Elliott Wave Analysis of TBT (Proshares Ultrashort)





A update to the previous ideas, of a substantial low in TBT and a generational top in ZB.

I think there is a great low risk opportunity here to buy TBT on a pull back, it appears that the FED is going to sacrifice the bond market for the stock markets to rally.

Bernanke thinks he can control both, but money moves out of one market into another, whilst there can be periods of manipulation the FED will not be able to control rates forever as the remaining holders of US treasuries flee and sell those bonds and buy into other assets then interests rates will push higher.

I am sure that's really going to help the FEDs book as they are carrying a ton of US treasuries (sarc), not to mention all those loans and credit cards that will see interest payments increase, so the US consumer will get shafted one way or the other.

So look for weakness now as we can use $15.80 as risk control, if the bond market is about to break down then TBT will move higher, so traders can profit from traders running out of the bond market.

By creating more QE all the FED will do is force traders into "real assets" and see the stock markets and commodities move higher, and the bond market will suffer as traders sell US paper to buy other assets.

Tuesday, July 24, 2012

Elliott Wave Analysis of TBT (Proshares Ultrashort)






In my weekend article i wrote about my concerns of a market that is very confused and we have 2 sides fighting each other for control.




On one side we have a potential reversal setup in the US aka DX and the US 30year bonds.


Yet since June 21st we have seen a bid come into the market and push up risk markets such as the ES and AUDUSD.


So we have to ask ourselves who is right?


The issue the bears in risk need to be concerned about is the US$ and its ramifications in the overall risk on/off trade, as if $$ moves away from safety, where does it go?


If the EURUSD is ending its cycle from the Feb 2012 highs and a 5 wave decline, then logically one one think that the move moves into assets that look cheap.


At this present stage, The markets that stand out are Gold and Silver, as value wise, i think i would would rather buy a market(s) that are near the lows, than to buy a market(s) that has travelled a large way since the June lows such as the ES and AUDUSD markets.

The question still needs to be answered, if we are seeing a cycle end where does the $$ go?

Looking at the TBT ETF, there is a strong case for a 5 wave decline ending or very near to a terminal point, and seeing how it closely tracks the EURUSD, (which it should as the EURUSD is basically opposite of the DX, EURUSD is 57% of the DX)


I still think traders on both sides of the aisle need to be vigilant here as we have a strange market.


But as we are seeing time and time again, when there is a safety flight bid, traders are running to the US$ and US bond market, but my work potentially suggests that cycles in both those markets could be signally a reversal.


Just how much lower can yields go on TYX? And how much lower does TBT go before a significant reversal?


One thing for sure is that when everyone is on one side of the boat, the market tends to reverse after a mature trend.


Based off my work, a mature trend appears to be ending on the EURUSD, DX, TBT and ZB.

Tuesday, May 1, 2012

Elliott Wave Analysis of TBT & ZN (10 year note)



I have been watching ZN (10 yr US note) lately and i suspect its near to a reveral, although these ETFs are not 100% linked, they do follow the underlining markets most of the time.

If a low is in this could be ready to see a strong break higher. Risk is to $18.17, the alternative is this is still going to chop around in wave [iv], although when you look at the 10yr note it really does look like it could be setting up for a reversal.

Having put in a new high this is at the point where a strong break lower could see a sharp reversal if the buyers dont support prices here.

If buyers move out of the 10yr US paper, then where does that $$$ go? back into stocks?