What Are Treasuries Saying?

TLT is the ETF for the 20+ year Treasury (long). As of the last F_O_M_C meeting they were going to sell shorter term duration bonds and buy longer term duration bonds to keep longer term rates down.

So when looking at TLT we have to consider that there is that fact we have to consider in any analysis.

Beyond that, TLT or treasuries are a flight to safety trade when the market looks to be headed south, I call this an inverse relationship as they tend to do the mirror opposite, except there are times when F_E_D actions will interrupt that normal "Flight to safety trade/correlation". I still find Treasuries to be a decent indicator to confirm the market, whatever the market signals are, I want to generally see the opposite in treasuries (not to be confused with yield funds-I mean the actual treasuries, when T's rise, yields fall and vice-versa.)


So a quick look at TLT as it is where a lot of F_E_D action has been since the last F_O_M_C and the minutes we are awaiting.

 TLT (green) vs the SPY (white) shows the flight to safety trade on a SPY decline.

 The trend of TLT 1 min is in a leading negative position, despite some recent intraday moves to the upside.

 The 2 min is leading negative-strange as the F_E_D is supposed to be buying long dated treasuries, a flight out of safety and in to risk assets? HY Credit looks that way.

 The 3 min leading negative position.

 5 min leading neg.

The 15 min is in line for this move, however longer term not confirming as 3C should be higher, what is interesting is that there's no negative divergence for the 15 min trend, which is the same timeframe I expected a pullback in the SPY.

And the SPY 15 min would agree with the TLT 15 minute as it has a negative divergence-which is a little longer trend that we are not quite at, although as of charts from last week, after we saw a bounce in to the gap-(that happened yesterday), I suspected we'd see deterioration in to the pullback. It seems for the immediate moment, that the short term charts are not quite ready for that, but this so far is the best looking correlation still suggesting the market pulls back, perhaps just not quite yet-maybe more upside in to the gap.

There is the VERY OFF chance that the market doesn't know exactly what to expect as we go in to the minutes just 4 minutes away.