The monthly change in gas prices is “less bad” therefore oil rally is close in Nov or Dec. USD market still worried about interest rate rise. BUT core inflation will come down in Oct-Nov putting the Fed rise off the table for the Oct and Dec meetings.
When oil rallies, TLT will RWm for a week or so (SPY will retreat but only a little as VIX is now low). This will setup the Jan rally:
- Fed will not raise rates causing a short term oil rally
- Draghi will increase ECB QE in Jan creating a great ‘run’ for TLT
- SPY will be at a high in December around 208-212
- Earnings will be dreadful as the Christmas ‘high’ comes off / January effect
January effect was strong in 2014 and stronger in 2015 for TLT. 2016 will be stronger yet!
Credit Flow Investor 