1/15/2017 update TLT chart and 30-year treasury yield chart

The 20-year treasury bond fund : TLT is a good investment vehicle to hedge equity long for risk off trade. Keep a eye on it and put it into the portfolio is a good idea. Especially, at the current situation of equity index hovering high, finding a good way to hedge equity long is kind of necessary. There are lots of way to hedge equity long such as long VIX related instruments: VIX call, VXX call, UVXY itself or call, etc, even the gold. Here I am not discussing the VIX related stuff and gold.

The daily charts of both TLT and $TYX (30-year treasury yield) are showed below. This 2 charts runs as a mirror image from each other (they are reverse). TLT's chart showed short term weakness and tended to move down to form the reverse head shoulder's right shoulder. TYX's chart showed short term strength and tended to move up to form the head and shoulder's right shoulder. So the trading plan is to wait for TLT pull back to  around 118.8 level to get support and reverse the course,  then pull the trigger to long. The upside target is the gap fill around 129.

http://schrts.co/piIyLf

http://schrts.co/YC0nxh

In summary, when there is a trading plan, you always wait for the setup, do not front-run the market. Buying TLT here, you may not lose money in long term, but it is not a good setup yet. Furthermore, TLT and TYX setups are helping T-bond future traders.