Sunday, April 25, 2010

Bond Market Update

As you know I've been watching the bond market (TLT) for a possible short trade and I believe we are a day away from triggering a sell signal. The bond market is clearly in a down trend which means we should be looking for shorting opportunities. You'll notice that TLT recently tested resistance and appears to have held. The stochastics are now about to issue a sell signal from the overbought zone. The last 5 out of 6 stochastics sell signals have been profitable. Looks interesting to me.


Don's "Trading-In-Action (TIA)" said...

Kevin, your style of trading is to go short when the stochastic returns below 80 level as a confirmation. However, the arrow you place on your chart does not coincide with the stochastics going below 80. This is inconsistent with your style of trading.
In my opinion, when you go long or short with a confirmation using the stochastic or MACD or any momentum indicators, you are bound to lose at least 30% of the profits cos these indicators are lagging in time. The only time you get it right with minimal slippage is when the market gradually loses its upward or downward momentum. Had you shorted TLT according to your strategy of stochastic turning below 80, you would have been a frustrated trader over the last few shorts you took cos the confirmation came only when the trades had gone down by 1/3 to half from its resistance level. Just an opinion....

Anonymous said...

Has the sell signal being generated given the past few jittery days?


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