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Tuesday, May 22, 2012 - Short Term Update - Building A Long Position

|Includes:SPXL, SPDR S&P 500 Trust ETF (SPY), TLT

A short message:

Update:

Based on how oversold the market is, I'm looking for a pretty decent and tradable bottom at these levels. The SPX has broken out above the top bands, indicating a possible reversal. So the trade setup is pretty simple, I'm buying at here and setting my stop at yesterday's lows.

SPX - 60 min

(click to enlarge)Click to enlarge

We have some possible confirmation in the TLT; the TLT looks like it is possible breaking down out of a triangle. So we have risk starting to rise, and safety starting to top out, just the combination we want to see when taking a long position.

TLT - 60 min

(click to enlarge)Click to enlarge

Based on how oversold the indicators are, this rally should last several days at least, and yesterday's lows should remain intact.

-Bill L.

Disclosure: I am long BGU.

Stocks: SPY, SPXL, TLT