‘Inflation Trade’ Balloon Gets Pricked

With reference to this morning’s post, yields are dumping, US Treasury bonds are getting a risk ‘off’ bid and the stuff that has gotten the biggest inflation/reflation bid since the Trump election is getting hammered. I give you Materials, which I am short…

xlb

I give you ‘inflation expectations’ gauge TIP/TLT, which continues to react downward.

tip/tlt

And I give you long-term yields, which continue to react from our targets (established last October) of 2.9% (10yr)…

tnx

and 3.3% (30yr)…

tyx

Now, I am not short enough to be avoiding a draw down today. So don’t take this as a bearish bravado post. It takes a day trader, wild eyed casino patron to play every move and I am surely not that.

I am not smart enough to have good days a vast majority of the time. But I was smart enough to balance and be prepared. It’s the macro trends that I care about. The stock market is still up trending on most important time frames, so it would go against my methods to be playing bear hero right now. But let’s see how the market’s TA trends go and let’s see how its indicators go. There’s plenty of time to adjust out of the current ‘balance’ mode if applicable.

Subscribe to NFTRH Premium for an in-depth weekly market report, interim updates and NFTRH+ chart and trade ideas; or the free eLetter for an introduction to our work. You can also keep up to date with plenty of actionable public content at NFTRH.com by using the email form on the right sidebar. Or follow via Twitter @BiiwiiNFTRH, StockTwits or RSS. Also check out the quality market writers at Biiwii.com.