I’ve mentioned using short positions on US Treasury bonds & gold as an indirect hedge against a short position on the equity indexes. While not official trade ideas (although they could be soon), I wanted to pass along these trade setups on both gold and long-term Treasury bonds, both of which are currently sitting on significant support levels with bearish technical postures that indicate corrections on both are likely & extremely likely, IMO, if both QQQ & SPY breakout above the recent trading ranges & rally from there.
A solid 60-min candlestick close below 1500 will likely trigger a correction in /GC (gold futures) with the scope of the correction most likely dependent on whether QQQ makes a solid breakout above 189 or not. The yellow arrow shows my minimum price target* of 1468 with additional targets dependent on whether or not the stock market breaks out & rallies from there. *As these are unofficial trade ideas, all price targets listed below are unadjusted targets, meaning those are the actual support levels where the odds for a reaction upon the initial are good. As such, one might opt to cover/close a short position slightly above the resistance level(s) they are targeting to help avoid missing a fill, should the buyers step in a bit early.
GC 60-min Aug 22nd
For ETF traders, a sell signal on GLD (gold ETF) would come on a solid break and/or 60-minute close below the 140.75ish support although I find it best to confirm any breakdown in GLD with a comparable breakdown of /GC. Should gold trigger a sell signal, my minimum price target is 136.62 with two additional targets shown on the 60-minute chart below which would likely come into play if the stock market breaks out & rallies from there. There are also several inverse (short) & leveraged gold ETFs available such as DGZ, DZZ & GLL which could be used as a proxy for shorting gold & one could simply align the support levels/targets on the GLD or /GC chart to come up with comparable targets for those alternative ETFs.
GLD 60-min Aug 22nd
The “other” big flight-to-safety” instrument that tends to fall when the stock market rallies are US Treasury Bonds. /ZB (30yr T-bond futures) will trigger a sell signal on a solid break and/or 60-minute close below the 163’300 level. As with gold, I have listed both mininum price targets (or a min. target zone with 3 separate support levels/targets, in this case ) as well as a “should the stock market breakout & continue to rally” target zone.
ZB 60-min Aug 22nd
Comparable price target zones are shown on the 60-minute chart of TLT for those preferring to trade ETFs over futures. One could also buy TBT (2x short long-term Treasuries ETF) instead of shorting TLT while also aligning the targets as the charts are basically mirrored with different price levels.
TLT 60-min Aug 21st close