Two consecutive gap-up rallies last week sevened-out at the midpoint resistance of this reverse pattern. The failure of TLT to break free of gravity does not necessarily ordain a further correction down to x=91.88, although it has made it more likely. That would generate an appealing ‘mechanical’ buy signal, although we should limit our expectations thereafter to a one-level ride to the red line (p=96.42). The 105.49 ‘D’ target would still obtain, but without the high confidence we typically seek.
TLT – Lehman Bond ETF (Last:92.14)
