August is too early an entry as I suspect cpi will also be strong in August reported Sep 17. Notice Fed meeting ends on Sep 18.  I noticed in Apr 2010, Apr 2011, Apr 2012, Oct 2012 and March 2013 that the TLT:SPY chart must show a flattening or slope leveling off before entry.  March 2013 was followed by April 2013 where ccpi went from 2.0 to 1.9 and gcpi fell from 2.0 to 1.5! Hence this trend lasted only 1 month.

As August inflation looks to be fairly strong with gas buddy holding up so far, I think there will be a taper starting Sep 18.  By then the TLT:SPY chart should show a leveling off.  The policy of the Fed switches from QE to Twist and Twist to QE.  Call this policy Q-ternity.  Next transition is from QE to Twist. The good news about Q-ternity is that you have strong trends up and down which is ideal for trading.

It’s a good sign that the TLT:SPY level is at 0.623.  It’s a loaded spring ready to go as at the peak hits 0.95+ in the transition. I see a taper in September followed by Twist in October or December. CCPI should be at 2.0 in Dec. However, you cannot wait for the Twist announcement as the market will have anticipated it starting 2 months before.  I think it will be a 2 month run from Sep-Nov possibly Dec. this year. Why 2 months run only?  In 2011 core inflation started at 1.1 whereas in Sep it will start at 1.8 thereby requiring a shorter time to achieve 2.0. When the Twist is announced, you can sell TLT the same day.