Treasury Bond ETF Consolidating Ahead of Next Upleg

As a proxy for the long end of the bond market as we approach some potential Fed "instructions" about the intensity and size of QE2, let's take a look at the iShares Barclays 20+ Year Treasury Bond ETF (TLT).

As we await the FOMC minutes from the last Fed meeting on September 21, my pattern work is telling me that all of the action in the TLTs since the Sept 29 rally peak at 106.36 through this morning represents a mid-point consolidation period that separates two uplegs.

If that proves to be the case, then the TLTs should hold the 103.95-103.50 area, prior to embarking on another upleg that propels prices above 106.36 to 107.50-108.00.