To update my thesis on Treasuries, I am expecting them to either grind sideways or offer up a decent tradable long into early-January 2014. At that point, say, around mid-January, I would be looking for the next spike higher in rates (and by proxy the next leg down in the TLT ETF, for example).
On the updated TLT daily chart, you can see the recent churning has morphed into a falling channel off the late-summer/early-fall lows. If price can break up and out of this pattern I think you get that tradable long for several weeks.
The good news is that longs have a well-defined stop-loss area below those lows (purple line).
Make no mistake, though, that with a declining 200-day moving average the longer-term picture is still suspect.
Know your timeframe, and know your plan.
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$LM a beast!
My take, the market has priced in the taper worries, which is why the last few months haven’t produced many sell offs. BUT, there’s a lot to be said for and about the US housing market here… Basically, the closer policy makers come to accepting that another bubble is being inflated the faster the Fed will taper, and then, as usual, we’ll all wake up and discover that the market wasn’t all that efficient and the taper wasn’t priced in. Not sure the humor inherent in the situation will appeal to many people, but the merrier the festive season, the more likely the Fed will serve up a winter of discontent in the New Year.
Interesting points, thanks.