Humpty Bonds sat on a wall. Humpty Bonds had a…

http://stockcharts.com/h-sc/ui?s=TMV&p=D&yr=1&mn=0&dy=0&id=p03139435642&a=268848720

The triple bear on the bonds, TMV.  We are buying it.  Note the lesson here.  At this point in the chart this is an aggressive trade.  Cross the downtrend line and it becomes more conservative.  Cross the horizontal line, more conservative still.  We approach this question of risk sideways, like a crab.  We divide the capital we allot to the trade into 3 to 5 tranches and put a toe (or claw) into the water and wait for progress to put the next one in.

This trade is the result of overbought bonds with a reversal formation in the chart:

http://stockcharts.com/h-sc/ui?s=TLT&p=D&yr=0&mn=6&dy=0&id=p66510101248&a=261274354

This is speculation, of course, and your mother probably told you never to speculate.  Ours did.  Told us not to play with matches too.

 

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