I have added RSI to TLT and SPY HA links. RSI is important for a spring effect that I will call ‘RSI spring’. RSI needs to start low in order for TLT to have a good ‘run’. VIX GHA, SPY RHA and TLT GHA are also necessary.

For now TLT is heavily OB (overbought).  Will most likely rise; however pullback will be strong with such an OB condition.  It’s better to wait for RSI 60. See most recent TLT runs (Sep 22, Dec 8, Dec 30).

I understand that this condition exists now BUT being OB indicates too much risk to buy at this time.

A possible source of pullback will be Draghi on Wednesday.

The total pullback could be (until QE starts again):

15% on SPY to 177  and 0.9 TLT:SPY ratio…TLT to 159

which would be significant and therefore take some time to fulfill the pullback.

If it it takes some time, it may take 2 fed meetings to accomplish. Corrections/runs could occur in early Feb and also in late March/early April before reaching the levels mentioned above. In the last 3 months, TLT has had 3 runs: Sep 22, Dec 8, and Dec 30. There may be 2 more runs in order to achieve the 159 level.  Why so long?  Consider how long the run of SPY has been that is 2 years and the ‘taper’ for 1 year.

The time for signal is the day after Fed meeting (Dec 17)..see SPY in December:

Notice the SPY rally is limited 203.50 to 208.50 or $5 run and 7 trading days. This is due to QE ending so the big plays will be TLT until QE starts again potentially Mar / early April announcement.