please see chart below … ultimately, it’s about risk control and how much risk one is willing to take.
our thesis is the 14-15 dollar low was a BIG low and we are very early in a multi-year (multi-decade (?)) rise in interest rates. yup, you just read that correctly …so to manage risk, one must understand that there is a potential that the trend has changed and we now have 3 different levels to enter …
here and now … GARTLEY 222 pattern complete at the low however, a nice gap down warns of lower prices. gaps into a level beg of caution …
19.14-19.42 …realistic w/ that gap down and lands basically on the top of the channel w/ polarity in play.
18-18.50 .. a lot of ratios and polarity principle (red line) … that looks good.
so, if the low today was the low but you don’t like the gap down then WAIT for a daily/weekly CLOSE above 21.50 for confirmation and BUY or if you do not think the low was today then WAIT for the two levels below.
either way, risk is basically in the 16-17 former cluster or the low at 14.28. that’s the true support zones. the lower breaks then the entire thesis is 100% wrong.
perfect TIME and PRICE patterns were hit today and, IF (a really big if) the count is correct we are on the verge of a very powerful move in the bonds ….
the thesis was that we had a VERY VERY large top in March of this year at multiple waves of degree. the pattern that hit today was one of those text book sell PATTERNS and the price reacted. here we go?
09/12/2019 – as discussed below, took my lumps on trying to go long TBT. so am watching it to try another LONG (yes LONG) TBT. note the volume spike and also the 52 ish percent moves down seem to cause bottoms. also, take a look at the 30 year continuous chart … we very well could have a BIG LOW in rates. crazy, I know …
well, got stopped out trying a long TBT a couple weeks ago … the entire world is/was cutting rates and that didn’t work out too well for the home team.
but, you know what, the PATTERNS are suggesting rates are or have bottomed (I know, call me crazy) but w/ (the latest numbers) 13 trillion of bonds out there paying negative yields something will/has to give ..
back to the chart .. note pretty much every decline has been roughly 52% except for one which was 66% (52.45*1.27) and we tagged the polarity of the long term LOG trend line … nice little volume capitulation …hmmm.
also, note the foldback point … if it’s the foldback point then we are at the very beginning of, dare I type this, a big move UP in TBT.
I’m going to be in the prove it to me world and look for 5 waves up on a weekly basis before jumping in again BUT am watching this one closely.