Posted by: jhamon | October 26, 2009

MysteryHedgie: A Tale Of Two Trades

MysteryHedgie notes two prospective trades…

Two trendlines; if they break; take the trade.  Many (ourselves included) have documented the weakness in the TRAN index since Oil broke through $80 last week;  fewer are talking about the concurrent weakness in bonds (see TLT below), also stung by $80 oil.  TRAN and TLT are both near trendlines which, if broken (below 3750 in TRAN, 93.50 in TLT), have the ability to change the market’s psychology toward growth prospects in 2010. 

Given the traditional month end bid and the end of normally volatile October, it is less likely that these levels get broken, but if they do, underhedged books will be quickly adjusted.                                            

TLT Sits On Trendline

TLT Sits On Trendline

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