In February Amigo #2 braced for 10yr & 30yr yields to hit their limiters as noted by the black arrows.
We noted that while this was a warning, no real damage is confirmed done to the macro until Amigos #1 & 3 get hammered too.
Well, this week #1 took a big hit. Here is the daily view of the S&P 500 vs. Gold. Completely broken? No, not really. But suffering damage? Yes.
What’s more, there are economic cycle indicators looking even worse than this.
Imagine that, you have a Fed trying to extricate itself from QE and ZIRP simultaneously, and at the same time a presidential administration run by an orange colored maniac lobbing fiscal policy all over the world.
NFTRH 492 is going to absolutely delight in defining the turn of events through its indicators. We will gather the messages of Amigos 1 & 3 from a bigger picture perspective and also review what is going on in the metallic (i.e. cyclical and non-cyclical metals) indicators. From the charts I’ve looked at today – between being in and out all day – I think there is some real meat on the analytical bones now.
Practically speaking, being balanced (and recommending the same) seems to be working very well. Until the pre-close puke fest all 3 of my accounts, 1 completely long, 1 mostly long and the other completely short were all green. Then the fade made only 2 of 3 end in the green.
People who’ve read me since the long ago days of Biiwii’s blogs know that I am never so engaged and invigorated as when the markets are taking everyone for a wild ride. That is because we are called to task in order to prove our abilities rather than just showing up like ego driven doofuses expecting to be rewarded.
But beyond the day to day excitement it is the potential for a macro turn that will really decide when the money maker will get going. That is why I watch the Macro Amigos (and their indicator friends) so closely, you know. I like to make money just like the next casino patron. I just like to do it on new trends rather than mature ones.
So we’re going to work on an answer to the question regarding Amigo #1. Is he joining #2 and what of the goofball on the right, he of 10-2 yield curve distinction? The market could well be putting in what we have anticipated all along, a retest of the February correction lows. This could succeed (although mind the SPX ‘2460 gap’) and send the bulls back on their way with an Armstrongian “slingshot” or it could get worse… as in WORSE. I am not going to try to pretend to tell that story. But the indicators, Amigos among them, sure will in due time.
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