Monday, June 14, 2010

TLT Surprises

Friday's intraday market action was filled with the kind of twists and turns that we've all come to know and love. One of the most remarkable (to me) was the continued strength of TLT (and UUP) in the face of a bullish market. I've spend considerable time lately trying to create a robust and high probability trading plan for TLT and both Project Z and the PDQ Dashboard have provided some great tools in that research and have produced 78% reliable results over the past 16 months . . . not outstanding in my viewpoint, but definitely tradable.
The metrics columns reveal TLT volume is above normal and while price remains at the 97% level of the 6 month high, the fade in money stream is something that needs to be watched.

On the currency front the clear winner is GLD although the Rotator's trying to tell me something else. As with TLT, UUP is showing a roll over in Moneystream, a situation I mentioned last week.
Over in the chat room a few us closely monitor UUP, FXE, TLT and GLD throughout the day and everyone noted the surprising relative strength of TLT. The chat room is free so stop in if you're in the area, you just have to register with Chatroll to get started . In my continuing search for valuable trading nuggets, this is a venue of choice.

Playing the Energy Rotator is like juggling lit sticks of dynamite and close attention is required. Those beta numbers are deceptively docile . . it's the ATR that requires a closer look. The estimated $1.5 billion cleanup bill that I mentioned as suspicious last week has now mushroomed to $4-5 billion, a substantial change reflective of the great unknowns in this ongoing disaster.
There's some fast money to be made on these stocks if you're on the right side of the mood but the dramatic change in BP's stock last week demonstrated that you can't linger. Having looked at this motley crew in detail I now favor RIG as potential upside mover. Based on the WSJ article I posted last week and other research it appears that RIG has the most clearly defined risk exposure in this whole mess and with southern politicians galore calling for a a quick lift to the offshore drilling moratorium, the odds are building in RIG's favor.

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