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Showing posts with label TLT. Show all posts
Showing posts with label TLT. 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.


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.


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, June 24, 2012

Elliott Wave Analysis of ZB (30Yr Bonds)

Having finally reached a long standing target of 148-150 (the call was made back when the media and many commentators were proclaiming the US bond market was dead near 135 this year)

Bonds have come roaring back to burn the Bears for the umpteenth time over the past 3 or so years

Timing is everything as many have found out, if you time the markets wrong and sell the lows when most are Bearish, you end up being on the wrong side of squeeze

I am surprised the Bears have any fur left, with the butchery that has gone on over the last few months.

I personally still dont think the US Bond market is ready to roll over just yet, but having finally met my projections, i am happy to recommend getting short if price evidence suggests it.

But from the March 2012 lows, i dont think the move is completed, As any Elliott Wave enthusiast knows

You need a 5 wave completed wave for an impulse wave, its generally seen that the 3rd wave is the extended move so we require to see a 9 wave advance.

Currently i can count the move as a 7 wave move

Using TLT, we can see that we have a 7 wave move, and from the highs, the decline is somewhat choppy, so i dont have any reason to declare the bond market is dead, the Bond Bull is alive and well atm.

In fact whilst TLT hovers around the 122-124 area, i suspect it sets up for a strong move above 130, and the TYX sees new lows potentially yields around 2.4%

ZB should hold support around 14630--14530

When you look at the RSI on the actual ZB chart, you can see that it only supports 8 possible moves, so we should see a push higher, i suspect to new high around 155+ and the RSI will diverge and create a 5th wave divergence against the 3rd wave

So looking ahead, i either want to see price a breakdown and confirm Bearish price action, or a new highs in TLT and ZB over the coming weeks/months.