I’m tracking a 500-share, long-term position with a cost basis that has been reduced by profit-taking to 128.02. Pivoteers who follow this vehicle may have noticed the recent dip to a midpoint support at 133.44 on the long-term chart (see inset). In theory, according to the proprietary trading rules we follow, this made TLT a ‘mechanical’ buy at the red line, stop 127.25. Because I missed signaling the trade, however, we’ll have to wait for another entry opportunity. There will likely be plenty of time for this, since the theoretical mechanical fill at 133.44 implicitly re-acknowledged a longstanding bull-market target at 151.99. That’s sufficient reason to give us a bullish bias for any trades we initiate going forward — presumably with far less risk than the ‘mechanical’ entry tactic noted above. Our goal would be to augment our existing position. If the 151.99 Hidden Pivot target is achieved, it would correspond to a yield on the long bond of about 1.50%. It is currently yielding around 2.33%, and we can only surmise that so significant a drop would be concurrent with the U.S. economy’s slide into very deep recession._______ UPDATE (October 6, 10:39 ET): If the secondary pivot at 133.61 (see inset) fails to contain the selling, TLT’s slide will likely continue to at least D=131.76.
