Gas Buddy 11% rise in 1 month…inflation surging…Since beginning of May rise at 8% rate.

MONTHLY rate of change below for gas drives inflation higher

Why is inflation rising good? The Fed is sensitive to rapid inflation rises and signals in the following meeting to the markets that a pullback in liquidity is on the table.  The markets fall in the meeting after a surge occurs. In addition, yellin has made noises about an overvalued stock market so an interest rate rise is also on the table in the next meeting.

The plan is to buy TLT after an initial shock when it turns GHA…

10+% surges in above chart

March 2011… SPY fell in April 2011 and TLT rallied

March 2012…SPY fell/TLT rallied in May 2012

August 2012…September/October rally in TLT

Feb 2013…TLT rally in April after March Fed meeting!

March 2015…Gas Buddy was very low and had to recover quite a bit…hence the fall in bond prices..starting mid-April. BUT the gas rally will end in 1-3 months and roll over (so far 2 months of rally). At that time bonds will be very cheap…June 18 is a strong possibility.