Credit Flow Investor

TLT:$USD shows the best relationship for transitions of TLT bull/bear…

http://stockcharts.com/h-sc/ui?s=TLT%3A%24USD&p=W&yr=3&mn=0&dy=0&id=p29065458250

You clearly see 2013…QE

2014…Taper

2015 Jan No QE

2015 Feb-on below line waiting for new environment/regime

Also VIX weekly has been added to Reference section. It shows VIX rising for 4 weeks.  It may rise for another week then drop again in July.

Also interesting TLT to FXE…

http://stockcharts.com/h-sc/ui?s=TLT%3AFXE&p=W&yr=3&mn=0&dy=0&id=p20630589853

And eurozone inflation bounces back so Euro should rise for a while…

http://www.tradingeconomics.com/euro-area/inflation-cpi

With inflation lower, SPY can go higher and VIX lower. However, Yellin talked about Fed who should have risen rates sooner in 2004-2006.  Q2 will be stronger GDP wise than Q1 so July Fed Meeting is also possible.  Again wait and see until after Fed Meeting July 29 to see if announcement comes.

July 31 or Aug 3 could also be TLT entry points if that happens…

With inflation falling, can’t take a chance on TLT at this time until after Fed Meeting.

Reason is core inflation fell again and note lower than last year at same time…

Ironically, SPY can go higher at this time as inflation is lower again. But interest rate rise expectations were increased, so upside is limited maybe to 214-215.

Next time for major TLT run will be Sep/Oct after summer…

TLT may rise with SPY a bit but rise will be slow.

For TLT, new criteria for entry is the 3rd day green and vix ha > 15 at open.  This ensures noise is filtered out.

List for TLT entry:

1) After FM

2) 3rd day GHA at open

3) VIX GHA > 15

4) Gas Buddy Flat/Falling

5) SPY RHA

1) If SPY gets OS, sell at close.

So SPY will have problems this summer which will benefit TLT as seen last year.

VIX last year…

BUT VIX is higher at this point so if VIX > 15 go earlier..

http://www.businessinsider.com/david-rosenberg-on-market-liquidity-2015-5

Rosenberg writes:

“The rapid swings in the foreign exchange, oil, equity, and bond markets have stamped an exclamation mark on this issue — and the Fed has not even begun to snug conditions and embark on its first tightening cycle ever with a balance sheet this big.

TLT:SPY ratio indicates TLT is value again 0.55-0.56 and ready for a surge even as it did last July!

TLT:SPY ratio since taper started:

Last  April and May TLT:SPY was above the 40 wkma and still of high value this March/April.  BUT now it is value again and ready for a surge…

Gas Buddy is also rising quickly so Fed will want to act on Wednesday…

Fed has succeeded in raising the employment rate 1% so time to deflate stock bubble. Last time was 4 years from bottom to top and this time the same 4 years!

However, inflation isn’t what it used to be, so recession will be mild and stocks will also fall less. Before recession: 2000 core inflation 2.6% and 2008 2.5%, now it may be 1.5%?

and of course, VIX down…

So TLT rebound will be up very soon. Buy low…sell high.  The low will be soon on TLT as SPY recovers to Fed Mtg then proceeds to fall from there.

TLT GHA

SPY RHA

and VIX GHA

after FMtg

Since taper, non-QE and now  int rate rise environment, ROC X 0 has become useful as it was with SPY in QE environment.

I will now change ROC20 link to TLT.

In fact, the numbers may be grossly exaggerated, as some analysts say the real rate of expansion is somewhere on the order of 4% (as opposed to 7%).

We’ve noted on any number of occasions that multiple key indicators — such as rail freight volume, industrial production, electricity consumption, etc. — suggest the dreaded “hard landing” is in fact here, and if Beijing fails to figure out how to balance a sharp decrease in shadow financing with the need to boost credit creation (i.e., if China can’t navigate the impossible task of deleveraging and re-leveraging simultaneously), things could get materially worse before they get better for an economy that’s attempting to mark a very difficult transition from investment-led growth to a consumption-driven model. For more on transparency and why the real rate of growth in China’s economy is “anybody’s guess”, see “Guessing Game: China’s ‘Real’ GDP Growth Could Be As Low As 3.8%.”

http://www.zerohedge.com/news/2015-06-08/chinas-deficient-deflator-math-one-more-reason-distrust-data

http://www.zerohedge.com/news/2015-06-08/first-fed-rate-hike-timing-expectations-plunge-lowest-5-years