Rate Reversal

Interest rates have been raging higher for months, and last week, looking at TBT, I figured it was time for an easing. So far, this has worked out, since the rates (as expressed by the ultra-short ETF based on TLT, shown below) had come up so far, and so fast. With rates calming down, the NASDAQ has embraced this and, as of this moment, is up about 250 points in a kind of relief rally.

The big question, of course, is whether TLT has more than just a few days of recovery in it. Looking at TLT below, coupled with a variety of slow-moving indicators, it seems the prospect for a meaningful multi-week rally is entirely probable since TLT is so terribly stretched to the downside.

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