One sign that the market may be turning skeptical on the battle against inflation is found within this chart. This chart plots the RELATIVE performance of TIPS against US Treasuries (as measured by NASDAQ:IEF ). While bond funds in general have been under pressure against stubbornly higher rates, it is the relationship here that catches the eye. Breaking out...
Treasury Inflation Protected Securities are showing very clear divergence on the 2 week scale. Divergence of such are some of the most powerful signals that one can get especially on such a wide timeframe generally mean a shift in dynamics for quiet sometime. More so when concluding in bonds. As bonds generally tied to arrange of macro economic factors and TIPS...
The NASDAQ:QQQ typically trades with the AMEX:TIP over time, as the TIP represents real yields. With the TIP ETF falling, it would suggest the QQQ should be falling too, but that relationship has broken down over the past several weeks, suggesting one is likely wrong.
Just want to show an anomaly observed here... sort of a tip off on what is most likely to happen.
You see, I read Russell Napier's Anatomy of the Bear back in 2009 (not easy to get it as it is out of print!), and he describes TIP as one of the/a leading indicator ahead of the equity market.
Superimposed on the TIP daily chart is the SPY (blue line), NASDAQ (cyan...
Overlayed the TIP a chart with SPY (blue line). Quite clear that TIP (amongst JNK/HYG and even copper) precedes the index.
Given all previous analyses and outlook, what we would like to see is that TIP break out and above its trend line resistance, as does its VolDiv. When this happens, can expect a bullish advancement.
MACD has not yet turned to crossover, but...
A simple comparison between TIP and SPY line charts. Had always known that TIP is one of the leading indicator for the S&P500 index (and ETF is SPY). Previous heads up shown with the lag denoted by the white boxes.
Key takeaway here is that TIP had went past the last low, and is pushing down lower, while the SPY is hovering and IF it is to keep the co-related...
Hello friends.
There is an interesting correlation between the TIP ETF and inflation. TIPS stands for Treasury Inflation-Protected Security. These are fixed-income assets with a built-in hedge against inflation, so investors buy TIP when they expect high inflation and sell TIP when they expect low inflation. There is a clear lag between the movements in the price...
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.
Some...
Gold has a strong correlation with inflation protected T Bonds. Recently, gold has underperformed - most likely the gap will be closed soon. Either TIPS fall, or gold goes up.
