TLT tripped a new sell signal Friday with a dip below the green line. However, given the recent carnage in this vehicle, I have my doubts that it is setting up for another vicious selloff like the one that occurred in the space of just three days a little while back. Regardless of whether the futures are discounting an upswing/uptick in the economy, or the revival of inflation that has been dormant for as long as anyone can remember, my hunch is that the T-Bond selloff since July has probably been overdone, at least for the time being. Accordingly, instead of blowing out our 500-share position, with a cost basis of 128.02, I’ll recommend turning it into a covered write with the short sale of five Nov 25 122 calls. If you hold shares in the underlying ETF, offer the calls for around 0.58 on the opening, contingent on TLT trading 120.95 or lower. If the order goes unfilled, keep trying, but gently. You should also check here and in the chat room for updates. ________ UPDATE (Nov 21, 9:32 a.m.): The stock opened on Monday at 121.16, well above our threshold, so there was nothing done on the order. For today and Wednesday only, substitute an order to short five Nov 122.50 calls for 0.52. _______ UPDATE (Nov 27, 10:38 p.m.) Again, nothing done. Let’s sit on the position for another day or two. _______ UPDATE (December 3, 12:33 p.m.): The tide may be about to turn, so stay tuned for details as we attempt to rebuild a long position.
