At the first of February bonds (TLT) broke their confirming uptrend line from 7 day momentum on the Twitter stream indicating it was time to close the long trade. Since that time momentum has been confirming the down trend, however, in mid April 7 day momentum reached oversold levels which is often a precursor to a short term bounce. Almost three weeks later we’ve got the makings of a positive divergence indicating that there is the possibility of a long trade in the near future. If 7 day momentum can create a low sometime after tomorrow (three weeks from 4/14/15 low) that remains above the 4/15 low then moves high enough to break the confirming down trend line it will create a buy signal for TLT.
If the newly created uptrend line is broken to the downside it will indicate that bonds will likely have more weakness before we see a tradeable bounce. Basically, the break of the current triangle will point the next direction. You can track Twitter momentum and sentiment for TLT here.
Comments
Log in or sign up to join the conversation.