A $TLT Observation

My last call on $TLT was here, and though it didn’t quite get to my target, it virtually crashed in the right direction, so I wasn’t too far off. Now the fact that it didn’t quite get to the target was instructive. Where it stopped was, as it turns out, the 50-61.8% retracement of the prior advance.

The target I had used understood a downtrend to be intact, and that we could expect an impulse wave to the downside. But a retracement to the depth we’ve seen may imply the very opposite: that we were merely correcting in an uptrend.

Now, counting the structure is a complete mess (lots of ways to do it, lots of ways to get the particulars wrong). But, in a most basic way, we moved up (green arrow), and then we retraced to the 50-61.8% (red arrow). That, in a basic sense, may be, in itself, a 1-2 up.

You guys can start to see why I’m feeling so risk off here. I am making no call here at present, but keep an eye on that channel (it’s formed from the 3/9/20 & 8/6/20 highs). A breach of that may indicate to us that we’re exiting the local down trend and resuming the greater uptrend.

The bond bulls have a real shot here.


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