Premium Preview: TLT Treasures Harmonics

$TLT, the ETF for 20+ years Treasury Bonds, has multiple harmonic patterns in play.  Harmonic patterns offer targets, probable rejection points and risk parameters.

The Day chart shows a brown pattern is in Retrace Mode, this particular pattern has retraced approximately 61.8% which is not only symmetrical for this pattern type but also a very respectable retrace target.  Of course it is my opinion that all harmonic patterns dream of retracing 100% or more, but I digress.  There are two other harmonic patterns, one colored green and one colored blue that are calling price to a merged PRZ (Potential Reversal Zone aka completion zone for a harmonic pattern) at 123.13 to 121.18, should this occur, it would help that brown pattern retrace more in the 78.6% region.

Of course there's some work to be done to get to that double PRZ because currently price is expanded which implies a need for a rest (chop) or bounce into resistance like 133.03 is a good one to keep an eye on.

Looking at a more intraday perspective, I'm looking at an hour chart, this shows that a harmonic pattern, colored green, has completed at 130.64, this was the downside target when 139.15 was determined as a swing point.  So now that the pattern is complete, there are things to look for in regards to the probability being to retrace this pattern to the upside or that the 130.64 is merely a means to an end, a scaling point to lower targets of 122.64 or 116.94.  Before I go further, note the extended downside target of 122.64 falls right inside that double PRZ on the Day chart, this creates a TRIPLE PRZ, thus just begging price to come to it.

Again, there is work to be done to accomplish the downside target and if a Retrace Mode occurs, I'm watching that 133.03 on this chart also for the initial important resistance test.  As long as that price can hold as resistance, the probability of continuing to the downside is strong.  However, it is my experience to never take markets for granted to act out as I deem fit, so it really is best to define where the bias could be wrong, in this case if price is able to hold above 133.03, there is risk of shiftiing the directional bias from down to neutral with an upside pull, increasing in upward bias above 135.21 on the Hour chart and above 138.71 on the Day chart.

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