iBankCoin
The first hit is always on the house.
Joined Aug 2, 2009
1,847 Blog Posts

A TRAP BEING LAID IN BONDS

Last year I discussed a scenario in which we’d see a bull trap laid out in bonds. That technical set-up I laid out is happening here in $TLT.

If I am right, that move occurred today, right at my high target this year of $124-125.

I’ll discuss this in After Hours with Option Addict after the close, but I picked up $TLT puts for May.

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49 comments

  1. TradePleb

    How do you feel about $CMCM? Seems to be reflecting a portion of the sentiment chart, just not sure if aversion or discouragement…

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  2. heisenberg

    Favorite financials setup?

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    • Option Addict

      I took a stellar entry on $GS calls today. June16 230’s for $2.10. .05 off the low.

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      • Darren

        You trading the broadening pattern or was it something else you saw?

        Assuming it was the broadening pattern, how are you managing it? I ask because I took a stab at GS on the previous dip for a move back to the middle, but I watched the thing trade basically sideways before I got shook out last Thursday. The trade wasn’t necessarily “broken”, but it got to the point where I didn’t feel confident it could get to my target with only 5 days remaining, so I grabbed whatever premium I had left (luckily earnings kept the premium propped up a bit so I could get a little something back).

        Looking back, I’m not sure I would trade that pattern again, simply because it can continue going lower and lower without technically breaking the pattern. At least with a wedge, prices are sort of forced outside the range at a known point in the future. Even if I bought more time, I think I would have been screwed on this one from a risk / reward standpoint.

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        • Option Addict

          Yeah, we’ve been talking about these patterns in AHWOA fairly often lately.

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          • Darren

            Alright, I’ll just wait until I have some time to watch if you’ve already talked about it there. Granted my entry wasn’t the greatest, but I was basically playing a break from the consolidation on the 30d if I remember correctly.

            Had I gotten in at the ideal spot on Mar 27, I was just trying to figure out how I would manage that. Only thing I can come up with is a break to new lows. I don’t know, I just feel like that’s one of those patterns I don’t feel comfortable trading, and was wondering if you had some insight.

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          • Option Addict

            I us d the term ‘leg sweep’ for entries in stuff like this. The advantage is the break of a prior swing low, IMO.

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  3. Jay

    Interesting, thanks for sharing. I agree that TLT looks bullish here and might be fixing to close that election gap (also consistent with Fly’s recent post showing TNX).

    Will definitely be curious to see if a trap is being sprung…

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  4. thinair

    In agreement and hope you are right. I added to losing position.

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  5. tweek

    One of my favorite Al scenes.
    Cuz she’s got a grrrrrreat ass!
    vicious aren’t I

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  6. dragun

    OA, Your thesis was that we would likely see a sell off in the mkt in May. Is that not bullish for bonds? haven’t has a chance to sit in on AH, wondering if your thesis has changed.

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    • bushwacker2

      He needs to rethink his thesis.

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      • Option Addict

        Bro, you are top 5 worst on ibankcoin at anything analysis related. Take SNAP last night. First time you speak on it, first time it’s turned higher in weeks.

        I have a scrapbook of your comments from early last year too…so don’t say anything about thesis. I can’t imagine you can think far enough to have one of your own.

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        • bushwacker2

          SNAP is a POS stock that will end up like a TWTR. You’re focusing on days and I’m focused on months and longer term. But that’s fine if you’re happy picking up nickels and dimes off the sidewalk every day. Don’t worry, be happy OA 😎

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    • Option Addict

      @dragun,

      Q4 last year I said May we’d level off.

      We been leveled off for weeks now. Possible we’re already in the midst of the chop I said we’d see.

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  7. tonka

    If you wanted to trap some bond bulls now would be a heck of a time to do it. Everyone and their mother is expecting that election gap to close, including me. But if I really had conviction I would have been buying calls 3 days ago.

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  8. reversion

    Ballsy call loooks like a nice well shaped double bottom was just triggered, could be a trap or a face ripper.

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  9. Rough Lcky 11

    can’t remember the last time OA talked about a Put trade hope it works

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  10. Rough Lcky 11

    i missed that one all i heard about was the call trade,my bag

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  11. MSS

    Jeff, why $124-125 target on TLT? I’m not seeing anything in any time frame that makes it look like that’s the area where it stalls/reverses. Is it that 127-128 looks obvious, so you think it doesn’t make it there?

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  12. mooby

    SNAP….. https://www.youtube.com/watch?v=kKSr6h5-fCU
    Like, I don’t use FB, like you know, I use SNAP….

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  13. Shaboi

    Putting myself out there, but I love $BX into earnings tomorrow. Buying June $33’s today.

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  14. thomasjefferson

    I’m curious about your view OA… as far as some of the regional banks- do you prefer a more shallow angle of consolidation or something steeper?

    I’m looking at Key shallow, Fifth Third medium, and MB steep.

    http://finviz.com/screener.ashx?v=211&t=KEY,FITB,MBFI

    I’m usually interested in a structure more like MB. But for some reason i like the look of Key’s relative resilience this time around.

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  15. vandamme

    OA – NTNX shaping up here you think?

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  16. matt_bear

    don’t look now but a whole bunch of other OA trades are working beautifully.

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    • Marc

      Shhhh….let the animals throw poop around for awhile longer!

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    • Option Addict

      You need to make your own sentiment chart of that.

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      • matt_bear

        shopping for exotic car= shut everything down.
        taking shots at jeff and his family= buy everything.

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      • Marc

        I don’t have a chart…..but as I have said before this blog is the best sentiment indicator I have. When it gets ugly I get buying

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  17. shr1

    I agree. Shorted $zn_f last night

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  18. Rough Lcky 11

    CLF she still can’t get enough of going down

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  19. Rough Lcky 11

    i need more patience hate waiting on a stock that just sits there while the whole market goes up

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  20. Rough Lcky 11

    hey but the Q’s&TLT looking good so i’m happy

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  21. dlrago8

    CRC biting me in the ass! Probably should grab the GS calls but going to wait it out and see if I get a lower price.

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