The menu has been updated once more, with a category called “Existing T’s”. As of Wednesday, there was a Trading T in SPX added as we had 2 consecutive hours back inside the hourly Keltner Bands. This is a short term Trading T which should last until October 15, based on Price and RSI.
There are parameters to keeping this T in force. Price needs to stay above the mid-Keltner at this point, and RSI needs to stay above 50. For those who follow my posts on elliotwavetrader.net, I have been highlighting these requirements since Wednesday’s opening, while looking for a retrace yesterday no lower than 4420. The 50 hour MA is 4417.
There is no investment T in SPX at this time.
Let’s start by looking at the unmarked Live T Theory Chart. The Volume Oscillator has not regained the zero line yet. The McOsci has gained the zero line, but it is till below its last peak of 46. In the event of a positive T, it would only mimic the Short Term Trading T in time, as was mentioned above.
The Bullish Percentage Chart has yet to regain its Keltner Bands. There is a symmetry at present that would be very bullish should it move above the mid-Keltner band. The mid-Keltner band is at the point where it meets the downtrend that has existed since the peak in June. It would be a very positive situation for that line to be crossed.
The ‘Simple Chart’ is just starting to turn up from negative territory, but you can see on the two week chart of price on the right side of the chart that we have just barely moved above the downtrend in price. This chart has more promise of upside than BPSPX and the T Theory Chart.
The T in TLT
Looking at TLT, we have reached the bottom of the Keltner Bands on this T. 146.13 is the lower band, and we closed Friday at 146.91. As per last week’s post, I expected a poor outcome no matter what the Federal Reserve decided to do with rates. Further down the road, when tapering actually starts, I expect buyers to come back. My hedge did not fully cover the loss of this week, but it did mitigate it.
If you look at last week’s historical chart on TLT, you can see that TLT actually rose once Tapering started. We could see a similar response in November, should that be when Tapering begins. Long term bonds are more volatile than shorter term ones but in the end tapering allows for bond yields to be lower for longer, because it keeps inflation lower for longer.
I intend to remove my hedge, but not until I see how price develops. Over time I have realized that if there is not a T in equities and I have a T in bonds, I need to have patience.