Thursday Update: TLT Sell Signal

In the Special Situations Portfolio TLT is reversing SHORT today. The significance of this reversal cannot be understated as it is combining with a Wave 5 Sell Signal to generate a high confidence trade to the Short side.  

TLT is trading around $119 and its Wave 5 target is between $112-115. For option traders the June $118 puts are trading at $1.30-1.35. At TLT $115 those puts are worth a minimum of $3.00 and at TLT $112 they are worth at least $6.00. Using a 50% stop, the risk is 50% with a reward of between 100% and 350%. Good odds.

An alternative way to trade the Sell is to go Long TBT, the inverse of TLT.  It too is carving out a Wave 5 Signal, only to the upside. 



Note that all April expirations have been rolled forward into June.