murphycharts

Interest Rates Disconnected from Gundlach Ratio

TNX appears to be moving with Regional Banks ( VNQ ) vs. Real Estate ( VNQ ). Copper vs. Gold continues higher.. big week T-bond futures ..

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I think its possible to have rates dropping and copper outperforming gold because of either inflation or the short-term shocks to economy i.e. less shipping, transporting, and producing making it more expensive
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murphycharts scheplick
@scheplick, Absolutely!
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Hi Murphy, Thanks for sharing your analysis. Greatly appreciated. Can you please explain how Copper is trading bullish against Gold while Copper is a leading commodity for indications of global growth whereas gold trades higher based off global uncertainly. How is copper outperforming gold in this pandemic?
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bembel242 Michael_Harding
@Michael_Harding, China is getting better on track in terms of the macro recovery (parts of that is hope of course) and Gold has no diversifying effect at the moment. This leads also to a short to medium term relative strength of copper. Copper is historically more sensitive to macro news flow than gold - hope that helps
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Pholesolus Michael_Harding
@Michael_Harding, Copper is running into supply shortages, mine strikes and the like while many gold mines are producing at full capacity, so some of the situation with the futures seems to be a literal physical delivery issue
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I think as Copper daily is on an extreme RSI level, it seems likely that Copper vs. Gold will follow the other two chart lines in downward direction. Good charts !
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nice work
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murphycharts Kinnari_Prajapati
@Kinnari_Prajapati, appreciate that
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i am missing the point what ratio about for regional banks and real estate, what are they measuring here
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MrRenev infusion
@infusion, AMEX:KRE/AMEX:VNQ
KRE: The SPDR® S&P® Regional Banking ETF seeks to provide investment results that, before fees and expenses, correspond generally to the total return performance of the S&P® Regional Banks Select Industry Index (the "Index")

VNQ: Goal is to closely track the return of the MSCI US Investable Market Real Estate 25/50 Index.

From what I understand it's the ratio (regional banks)/(RE prices), I think regional banks make most of their money lending for real estate purchases, from morgages.
If the ratio gives some heads up to other ones you can make money ezpz.

The graphs lost correlation maybe this means some mispricing. Or warns of a big crisis. Not sure what the bank/RE ratio means, maybe what share of their profit is from RE, or how expensive/cheap they are compared to RE...
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