Too good to stay

Technical analysis serves me very well again. I made a “perfect short” as I phrased it for shorting the long term bonds. Here is what I said: Looks like it was a good call as we are exactly seeing this in TLT, after hitting $133 it has moved up to $138, a point exactly lining against its resistance. Technically this is a perfect spot to short with a high probability of winning.

 
The timing was perfect as TLT almost immediately went down and hard for 2 days! And my trading via TBT calls has doubled within days. With such a fast move and profit, it would be crazy to stay for more, although TLT may certainly go down more from here. But, this is a big but, if TLT tries to make a dead cat bounce after a hard drop, the gain from call options will evaporate easily. I don’t want to see it happen. If you are the ones making a similar trade with me and having seen a good profit, don’t be greedy and better to take the gain now. The coming Friday’s job report can easily move the bond market and no one knows for sure which direction it will go. If TLT indeed bounces back to its resistance, it will be another perfect short to make, at least for me!










By the way, I do still keep my naked TBT puts for now, expecting for further downside risk for TLT. It is much less sensitive to the short term moves of TLT and I don't need to be exactly right to make money.