1) TLT GHA at open on Jun 18, VIX HA > 15 and green, OEX < 4dma
2) same as above on Jun 22 or Jun 23
3) same on Jun 29
Have to be open to a turnaround occurring right after Fed meeting as well.
At end of month on Monday, a clear signal forms as to the direction of TLT based on the decision table above. Jun 22,23 are also possible.
Gas Buddy has fallen over the weekend so TLT will pop about $3-$4 next week. If the Fed announces an interest rate rise on Jun 17 (not implemented though), TLT should fall again setting up the rebound for Jun 29. Initially TLT falls but then rebounds and establishes a new bull market. Initially SPY will rally as well due to announcement only and not implementation. But then interest rate worries take over and SPY comes under pressure and falls.
The currency markets will like the USD due to planned interest rate rise. A rising USD is a primary driver for TLT.
Notice OEX and VIX together show the trend reversing before Fed meeting on Mar 18.
Also April…
For TLT to resume bull status, it would need to close above 122.77. Also RSI > 50…
T means transition
The first T is the taper transition to no QE and falling inflation/rising USD. The second T is the transition to interest rate rise territory.
Dec 18 was the Fed meeting announcing taper to start at Fed meeting Jan. TLT went down for a week then started upwards.
Possible dates for turnaround if VIX HA > 15,
June 29 or July 6 at open.
ROC20 shows SPY overdue for 4 to 5% drawdown…
Also news links..
starting late May TLT can rebound…
In late March/early April, TLT not a play. So this is a sanity check not a precise timing entry tool…
longer term view…TLT only a ‘play’ if FXC below 50 RSI
When policy changes occur, the TLT:SPY ratio rises the most. Ratio is at bottom of range….
TLT will be down this week which is good as this will be a good rebound opportunity after Fed policy change Jun 17. Initially TLT will go down after int rate rise announcement but then start a rebound 1 week later for 1 month (July). This all depends on the policy change being announced Jun 17.
USD is back to bull mode again….but Fed Meeting will provide more clarity & volatility.
The market direction(s) are too ‘noisy’ right now.
Vix is up but the fed meeting is critical or rather the open of Jun 18. Jun 18 at open tells the market verdict on the fed meeting and the resulting trends.
Plan is to play TLT then if TLT GHA, VIX GHA, and SPY RHA otherwise wait for the Monday Jun 22 at open for the near term direction of market. As SPY has hit new highs and TLT:SPY ratio is at bottom, the direction will most likely favor TLT.
So Jun 18 at open…
BTW, SPY run in Feb was too small ($7) 202-209 so SPY is a very limited play with QE off. Therefore all plays will be TLT until QE or ‘loosening’ is back on (perhaps next year).
ROC20 chart below shows rebounds less now that qe is off…feb rebound small and march rebound also very small:
2013 QE…ROC peaks 7
2014 Taper….peaks 7 and 5
2015 no QE…one peak 5 and others 2.5
Aside, I am vindicated by Japanization being the primary problem:
http://www.marketwatch.com/story/economic-policy-is-turned-inside-out-2015-04-30?page=1
Confirmation will be by end of week….
Makes sense as a few days after Fed minutes. Look for VIX to rise next…
Credit Flow Investor 