Range Expansion

“When you get a range expansion, the market is sending you a very loud, clear signal that the market is getting ready to move in the direction of that expansion.” – Paul Tudor Jones

While the large cap names in the QQQ ETF push higher to the upper-end of a well-defined $271-$280, likely on hopes of a more realistic second stimulus package close to being passed for the American people, the more interesting and actual range expansion we are seeing this morning is likely to be overlooked. 

Indeed, Treasuries are being sold, as the updated TLT ETF daily chart, below, illustrates. A cyclical person may very well point to a vicious first Presidential Debate last evening as being a genuine cause for concern about America and America's debt. 

But the reality is that The Fed wants rates low, as we have noted time and time again. The only way their policies change, and their general self-absorbed view that they are capable of shaping markets and the economy for the greater good, is if the market fights back and effectively takes their printing press away from them. The only way that happens is if the market raises rates on The Fed with bond market "vigilantes," which have been in hiding for decades, reemerge from the wilderness and force the issue.

I have been short TLT via long the levered bear ETF, TBT. And and betting on an imminent breakdown lower from the highlighted bear pennant, below. I am also looking for the highlighted, major double-top to come home to roost and put in a good, multi-decade low for rates, as difficult a task as it may seem to call it (and it is). 

But low rates will not be permanent, nor have they been in the history of previous civilizations, regardless of how intelligent, clever, and omnipotent they thought they were at the top--Time to lock in those fixed mortgage rates, as many folks are right now. 

Elsewhere, GRWG remains a formidable pot play. Keep an eye on SMG to follow suit in a similar vein.