Partial TLT exit?

Entries are easy, exits are tough. If you decide to hold everything, you risk losing decent gains. If you take profits too soon, you can be right on a phenomenal move and watch the train from afar without you. So, I prefer taking some profits on a target and holding the rest. Of course, judgment depends on the market. 

Here's the daily TLT pivot only chart - meaning it shows yearly, half-year, quarterly, and monthly pivots only, without any support or resistance levels. This makes entry decisions very easy. You can see most of 2015 second half was quite mixed; it could not sustain any more above the 2HP, but the YP held has support several times. As of 12/30/2015, TLT was below 3 of 4 pivots and appeared it would open below all pivots for 2016; but a lot changed between 12/30 and 1/4 in the markets. On 1/6/2016, the status changed to above 3 of 4 pivots! It is this kind of status change near big levels you want to see for an entry. (And if you had any shorts from late December, these were clearly cut.) On 1/6/2016 TLT changed status on one long term and two short term levels all clustered for a great risk-reward. That said, it was below the most important YP so this would be a partial position. 

Then we were watching to see how the YP acted. No problem; one day partial pause and after that held as support. That was your place to add 1/22-28 up to a full position. This has moved nicely and now the question is when to take some profits.  

Let's look at the resistance levels. TLT cleared 1QR1 (smaller red crosses) without any trouble, and it quickly acted as support. There was more of a rejection at the 1HR1 (red dots) but crucially the YP held as support. Once it cleared the 1HR1 again, that level held. Now it has jumped above the Q1R2. The YR1 near 135, which seemed way out of reach when I mentioned it as possible back on 1/15, now looks very doable! The simple answer would be: TLT move catching everyone by surprise, very strong trend, hold for that. 

That said, RSI is the highest in a year on both daily and weekly charts, and that is why we should at least consider locking in some gain especially on the recent add. Here's the weekly chart with more standard tech indicators and MAs. I suppose I am a bit concerned about pro selling coming in with the high RSIs, as that can happen - although it was with stocks in a bull market.

Lastly, here is the pivotal reason for my exit consideration. The futures are giving very clear signals, and ZB reached at YR2; and ZN at Q2R2 showing some rejection. We could also use resistance levels that have already cleared as possible support; ZB 1HR2 and ZN MR1.

OK, for now:

1. Watch reaction from ZB and ZN resistance and support levels mentioned above; on TLT next up is the FebR1 area.

2. Watch how stocks react to their YS1 levels; several broke the last few days and may recover (which would probably be bearish for bonds.)

3. To be clear, only taking about a partial exit consideration at this point. Entry near 1/6 I believe best to hold until at least one pivot (probably monthly) breaks as support. But the adds taken 1/22-28 are a judgment call here. Let's see what happens. 

2/10/2016 12:40 EST update

Looks like a TLT hold. TLT pushing the FebR1 with no sign of rejection and may close above. ZB may close above the YR2 level, very bullish; ZN also right on the level with no sign of rejection. Meanwhile, SPY & ES could have reclaimed their YS1s but didn't; bearish action in stocks today. On a weekly basis, TLT is flying and looks like it could even go for the highs!

2/11 9:35 EST update: YR1 tag! Probably a partial take, but let's watch how it responds and the volume. This was target first mentioned from 1/13 with simple logic: if TLT started trading above the YP we could see YR1. Did not look likely at 124 and change but lo and behold 134.42 has tagged!


2/11 4:00 pm EST update: YR1 tag and high volume selling. Tough call here, not really a reversal since well above yesterday's low. But volume selling at 1HR2 / YR1 combo. When I mentioned this target on 1/13 it seemed far away - only 1 month! Anyway, from here you could:
1. hold all and go for higher levels
2. hold all until monthly pivot breaks
3. hold at least half (1/2, 2/3, 3/4, up to you); and sell if weekly pivot breaks
4. hold at least half (1/2, 2/3, 3/4, up to you); and sell portion near this YR1 / 1HR2 combo

Tough call here. On the stock side, RTY held its YS2, but INDU broke YS1 and VIX cleared its YP. 2/3 bearish. So, probably hold all. Like I said earlier, exits always tricky. 

2/12 12:20 EST update. Looks a bit different now doesn't it. Even if portion out with TLT back under its FebR1 , decent gains from entries 1/22-28. TLT weekly (long term levels only) and daily charts (usual setup) below.