Market fears another look

The markets stayed put today, so the channel wasn't broken. As we look at what happen next, here is a look at a popular bond ETF, TLT (20yr bond fund). So the theme is that when the Fed reduces rates bond prices rally and stock prices fall, another scenario is when the world is afraid of bad things they run to the safety of the US Treasury (Bond prices rally and stock prices fall). Notice that TLT has rallied to high fear levels of late 2008, and 2009 and is retesting recent times high of 100. This would be something to watch closely. Now, should it fall it would be equally interesting to note if Stock markets still participate in the rally or whether the correlation breaks down near term.