The models have gone into a kind of holding pattern here with the RM version continuing to show a turtle like charge up the equity curve. Surprisingly, the VIX was down to sub 14levels this morning, a level last seen in April of 2011. It’s been a while. Monday’s PDQ spin on VXX was obviously premature in the brillant light of hindsight while bonds in the form of TLT are refusing to go up. Savvy traders know this situation could literally change in a heartbeat depending on how various precarious Mid-East and Euro timebombs are dealt with. Long term traders know that TLT really should be trading around 97, not 115 and one of these days the bottom will fall out of the bond market, seriously unbalancing most hedging strategies. Exactly when, of course, is the $64 question.
