We’re 2 hours into the new week and on the daily bars a divergent pattern of the Lazy Man 5 is clearly in formative stages. The safety pair of GLD and TLT, which soured in last week’s rally, is today in the green. While the talking heads are widely predicting the collapse of TLT and other bond entities, we can never discount the market (think GS) to do the opposite.
Actually, this is more likely a post-expiration reset as the commercials take protective positions. The conundrum is that bonds tend to move inverse to equities and equities are overdue for a slamdown. If bonds are poised to collapse and equities are poised to crater there could be a substantial volatility spike (at least shot term) until the break.
