It appears that Bonds failed and reversed at a exact 0.618 extension of the bull run since 2008 and reversed sharply which is characteristic of a truncated C Wave suggesting we are headed much lower in prices and consequently much higher in yields. (Possibly all the way back to 2008 origination.)
Note I have labelled this as an ABC move and not an impulsive move...
RINF is an exchange-traded fund that tries to price inflation expectations. TIP is an ETF that tries to hedge against inflation. While both of these have flattened (or are falling), the CPI keeps rising. Could it be that even stocks won't be able to outrun inflation in 2022?
The TIP / IEF ratio (reflecting relative strength of Treasury Inflation-Protected securities against T Bonds), having broken thru a declining long-term trend early in 2021, has now advanced to record an 8 year high. The Fed inflation narrative does not appear to be satisfying bond market participants.
Looking across the panel of leading indicators, it is starting to look as if something ominous is almost completed in building up and about to pop...
The JNK High Yield bond ETF is hitting a resistance;
The IWM iShares Russell 2000 ETF is in a bind, unable to break out as MACD is crossing into bearish region;
The TIPS Bond ETF is falling over;
The VIX is about to...
In the chart below you have the TIP and IEF the IEF ratio. IEF is Ishares 7-10 year treasury bond ETF and TIP is the TIPs bond etf. On the right side of the chart you have the 10 year inflation breakeven. Now looking at the two you can see that they track pretty closely. Now generally the IEF 7-10 year has a very similar duration to that of the TIP etf.
Just look at Thomson reuters crb index and the probability that the dollar is bottoming. Barron's article points to everyone being bullish on inflation trade and boat is tipping to one side decidedly. we could see an uptick from ST oversold condition to con't a little bit, but I expect that commodites have topped for now and will consolidate for a while before...
Keep an eye on the relative strength of TIPS vs IEF as a measure of inflation expectations. Watching both real and nominal interest rates can be helpful in assessing future prospects for commodities and other real assets.
Trapping Silver/TIP ratio between the descending trend, flat 30wk SMA, Inclining 30D SMA. Ascending stoch with no sign of stopping.. The most coiled spring I have seen all day.
Honestly surprised at the accuracy of this Arc.
Tips go based on real rates and speculative forces have pushed the long end of the curve extremely far. Although counter to what most think we're in a deflationary cycle. Tlt is needing a catalyst to cause mayhem and question the FED's credibility. Powell will likely get fired this time
TIPS (tips treasury inflation protected securities)
TLT (Long Term Treasuries)
TIPS/TLT ratio indicates the markets fear for inflation. This ratio is currently coming up against long-term
resistance. This is a potential area of reversal or pause. This move coincides with a long term resistance
area in the CRB index (commodities).
A breakout here would be very...