While the 163 hedge funds that were long Apple reconcile their balance sheets this morning here are a few more TLT considerations.
First the delta neutral TLT/TBT model has been slowly chugging along reflecting a nice linear revenue stream even as TLT has technically broken down to support levels.
Jeff Gundlach (arguably one of the great bond traders of all time) posted some encouraging opinions for longer term treasuries yesterday and so far today's action has followed suit. Our May 135/131 credit spread still looks like a safe bet given the low odds the FED will make any move before June.
Now...something to ponder.......The lower chart with the yellow bars is a simple TLT trading setup.
Many Mosaic users do trade bonds, especially TLT, and here's a quick look at how the ATR trend values on the long term volatility chart have consistently signaled at least short term TLT BUYs.
1. The ATR trend passes through .8% and hits or penetrates 1%.
2. For new entries the ATR trend must retrace below .08% before a new hit of 1% can be triggered.
To preserve gains >> standard limit stop of .06% of the entry price and a trailing stop of .03%.
Over the past 2 years there have been 7 signals, all net positive although in 3 cases the positions were held for < 3 days.