Look at these bedfellows that are sleeping together in a sign that all does not feel well with the market, post-inauguration.
TIP-TLT is in a weird, toppy looking short-term pattern. The inflation that has been seen as a sure thing under Trumponomics is still in waiting.
Yet Uncle Buck, who I guess is being spun as desirous of increasing inflation expectations (the would-be implication of a rising TIP-TLT) because the Fed will raise rates, is in an even worse pattern. The target for USD is potentially in the 97’s (USD index is currently just over 100).
While Treasury bonds (risk ‘off’) resume the bounce from the big contrary setup. I did by the way take profits on balance on this trade, but will admit to you here and now that I chickened out on the trade. I am a good contrarian buyer but not a great holder, at least when I don’t value the asset I bought, intrinsically. Today makes me pay attention again, however. There are other vehicles than IEF and TLT that look good. These include Investment Grade (LQD) and the above-noted TIP. I also still hold SHY and SHV, which I consider ‘cash equivalents’.
Then there is good old gold, leading Treasury bonds, as it has cleared the 50 day averages. I don’t hump gold as the perma “go gold! got gold?” crowd does. But it is close to clearing resistance (the slush above 1200), though it has not quite yet done so.
Also, the miners have persisted above key support (which had been resistance commensurate with what gold is dealing with now), despite gold and silver not having cleared resistance. No details here; we cover that stuff each week in NFTRH.
Finally, here is a sector that will help decide whether the market votes ‘yes’ or ‘no’ on the much hyped first 100 days of Trump. Wink wink, nudge nudge, he’s for the little guy but maybe the big guy has some interest as well.
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