If you’re in the TLT trade I’ve discussed in this newsletter and on the radio with Danny Stewart be prepared to take some profits. We’re approaching the $115.34 price extension I’ve been targeting. This trade has worked best by harvesting profits at extensions and re-entering at support. A quick note about size; when you buy only buy a ½ position. Why? There is no guarantee that TLT will hold support levels. If stocks run higher, bonds will most likely go lower. Using a tight stop and smaller size limits your losses; which is crucial for this unforgiving market.
What’s Next for Bonds?
I’m writing this on Wednesday evening. By the time you read this the GDP number will have been released. Bond prices and yields will be affected by the number. If the market interprets the information as “good” then stocks should rally and bonds most likely will fall. If the market interprets the GDP number as “bad” then bonds should rally and stocks should fall.
Before you do anything tomorrow morning let the markets settle out. There will be several head fakes before the markets true move is known. It’s always best to harvest profits aggressively and keep loses small.
To see my watch-list and game plan for this week watch this video http://vimeo.com/96256833
You can listen to the show, Your Money, live on Saturday’s at 10:00 AM – just click this link and bookmark it – http://www.iheart.com/live/1190AM-4276/?autoplay=true
You can also listen via the iHeart Radio app. Simply download the app to your smartphone and search for 1190 AM Dallas. There is even an alarm you can set to remind you of when our show is on.
If you want to come into my office and learn about credit spreads send me an email. It would be a pleasure to meet, bond and talk stocks together – [email protected]
I often talk stocks and markets on twitter – you can follow me by searching for my handle – @TJReazor
I hope today’s newsletter helped.
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