Taking a look at TLT on my normal views aren’t providing any clarity as to the future direction as I’m not seeing any traditional technical patterns arise. I decided to use the three line break pattern on bonds and the dollar and it’s very clear that the dollar wants to rise and bonds want to fall. Bonds are falling at a much faster rate as it’s already in the oversold 30 area on the RSI, while the dollar has yet to break above the key 60 area.
My guess is that the dollar will approach the 200 moving area right about the time it’s hitting the 60rsi level. It will be key to see how it reacts there. If you’re long the dollar now, I see no real clear sell signals, but I wouldn’t be initiating any new positions.
What is really strange is that a stronger dollar caused the markets to falter a few weeks ago and now their rising in tandem. I’m not sure how much longer this can do on and either the general markets are going to correct while the dollar firms up. Or the dollar will falter at resistance and the markets will make new yearly highs. One thing that is for certain….logic would have the dollar collapsing giving all this money printing, but logic doesn’t always hold up in the financial world.