At the first of February bonds (TLT) broke their confirming uptrend line from 7 day momentum on the Twitter stream indicating it was time to close the long trade. Since that time momentum has been confirming the down trend, however, in mid April 7 day momentum reached oversold levels which is often a precursor to a short term bounce. Almost three weeks later we’ve got the makings of a positive divergence indicating that there is the possibility of a long trade in the near future. If 7 day momentum can create a low sometime after tomorrow (three weeks from 4/14/15 low) that remains above the 4/15 low then moves high enough to break the confirming down trend line it will create a buy signal for TLT.
If the newly created uptrend line is broken to the downside it will indicate that bonds will likely have more weakness before we see a tradeable bounce. Basically, the break of the current triangle will point the next direction. You can track Twitter momentum and sentiment for TLT here.
