Bond short at the high!

Yes it is true. Regular readers know my basic take is "buy what is going up" ie above pivots. Once in a while, a combination of pivots and other factors lead to good "speculative" ie counter-trend buy setups. To me this means buying support levels (green lines on charts) which by definition are below pivots (orange). I issued these for INDU and oil on 2/12 and have documented these calls elsewhere. And even rarer than that, a short setup at resistance levels will attract my attention. 

Shorting the market is very enticing because then things drop they go down fast but in practice it is often difficult. Money around the world is looking for a place to go, and this makes most asset classes move up over time. When you are long you may have people taking profits and a few pro short sellers against you, but if you are short then you have the trillions of $ out there looking to buy something. 

Anyway, I digress. RSI's on bonds across the board were getting historically stretched and I wrote up two special posts on this here and here. 

On 7/6 I wrote this: "Interestingly, as "analysts" are starting to sound calls for TNX 1.0 (the % not a computer program version), I am increasingly wondering about a major turn in bonds based on major levels and RSI. TNX came very close to reaching YS2 today and remember the big turns that seem impossible happen on the big levels, just like the USA stock low of the year on RUT YS2 exact. Remember, resistance levels are better used as profit areas on longs instead of shorts - but if you want to take stabs at speculative trades (ie short above all pivots), then multiple RSI extremes and levels are the place to try. Watch reactions on these levels: JulR1 reached today, then Q3R1 just slightly higher 143.64 which would be a good tag area for a setup. If above that then I'll start thinking 2HR1 / YR2 combo 145-148."

The TLT high according to my data feed was 143.62 on 7/8. 

Thus far this has been the only bond short I have even mentioned all year, and in fact the only counter-trend short (ie short at resistance, usual focus is short what is below pivots only) I have recommended on this site ever.  

That was a pretty hot day too because I also pointed out a biotech long idea. See previous featured posts!