Today’s action on the TLT was a bit muted although it did show resilience to widely forecast weakness. The Currency Rotator has dropped TLT to a negative rating and it may be difficult to understand why until you realize that the Rotator ratings are based on a pattern recognition of the 6 bar linear regression moving average. The attached chart should help convey the apparent impending rollover in TLT but we were frustrated last week when the rollover also seemed to be developing. While the mid panel TLT technicals are getting increasingly overbought a continued drop in equity prices will likely keep TLT at these lofty levels or even higher. TLT, FXY and FXF are all reflecting volume surges 50% above normal, while traders appear to be shying away from the dollar and gold.
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