How A Sharp Decline In Treasury Yields Could Net You Big Profits
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– ETF Watchlist –
The market may be in one of those consolidation ranges once again before it decides on whether to continue higher or not. However, there are still some trades we have on watch in the meantime.
Treasury yields look to be stabilizing and could even be ready to breakdown, especially if the market is fixing to make another move higher. For those in the Smart Trades community, this presents us with an opportunity we have been waiting quite some time for.
iShares 20+ Year Treasury Bond ETF (TLT)
If Treasury yields do breakdown, then we would expect the TLT to go with them, particularly when looking at the 20-year yield. This ETF has been flirting with a breakdown of the 100 level for a number of weeks now and we think now might be a good time to keep an eye on it in the off chance it gives way.
While the market is in a bit of a lull, it could be an opportune time to prepare for this trade. Make sure your risk is properly laid out before taking any trade, but more importantly, make sure there is clear indication as to why you’re taking this trade, like a breakdown of 100, before taking it short.
Also, be sure to use more than one confirmation on a trade like this. Gauge volume and price action to see if the breakdown, if it does occur, is valid.
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