On Sunday I wrote about the down trend line in the TLT. My thought was that as fear comes into the market investors sell equities and buy government bonds. The down trend line represent the decrease in fear and the corresponding rally in the stock market.

As equities were selling off early yesterday, major financial stocks were closing in on last Fridays lows, because of fears over Greece. The TLT was closing in on that down trend line, and was in danger of breaking through it and have equities take another leg down. Things were about to get a little scary when a “news release” came out saying that Germany was going to bailout Greece, sparking a massive rally in the stock market. As it turns out the t “news release “was not true no deal had been reached, but the down trend line remained intact and the market rallied.

This only reinforces in my min d that the trend line is significant and needs to be continually monitored.

I will also be watching the 89 level on TLT below to see if still matters.