Indicator/Internal Odds & Ends

A few NFTRH indicators and internals gauges. To save space we usually include a select 2 or 3 in the weekly reports and color code Bullish, Neutral or Bearish with some notes for the whole raft of ’em. This is a good opportunity to throw some visuals up here at mid week.

The 2 year yield continues to trend down and guide the Fed, while the 10-2 yield curve has been repelled back to a relatively benign position after jumping to precede the current stock market correction.

2 year yield and yield curve

Out further on the curve the 30 year yield Continuum is allowing the Fed to dove it up as well, after Q4’s yield scare.

In May the stock market is finally making a move to get in line with the direction that the 2yr yield has been leading it to. The green shaded areas are positive correlation and the red, the broken correlation.

The state of Cyclicals vs. Staples, a risk ‘on’ indicator, has been pulling back lately.

I may be short gold, but I am sure not liking copper or its industrial bros, and have not been since this (Copper/Gold) ratio broke down. This is a negative macro economic signal as it stands now.

As we’ve been noting in NFTRH for much of 2019 equal weight SPX has been lagging the headliners in a sign of weakening breadth.

The things in the top panels below have been a hidden negative divergence to the thing in the bottom panel. Junk bond speculation has long been one of the hallmarks of this risk ‘on’ (and on and on and… ) robo bubble that Bernanke created for Obama and Powell now seems bent on sustaining for Trump (assuming continuing permission from the bond market of course).

For all of 2019 inflation expectations have been going sideways, just the way Goldilocks likes it. I have a theory that if at such time as this consolidation breaks for real, she’s gonna get kicked out of the house. But for now – trade war noise aside – Goldilocks is in da haus and it is “just right” signaling for the bulls.

And it looks like said expectations are following TSX-V down. We’ve been noting for many weeks the failure of of the ‘V’ and its negative macro inflation trade signal.

There are others, but I am getting a little tired so let’s close with a look at the intact SOX>NDX>SPX leadership chain in the first 3 panels and also the ‘V’ bouncing Medical Device leadership. At the time the sector got torpedoed, we noted the ill logic of throwing the Device babies out with the Pharma and insurance bathwater.

Here’s the weekly view showing IHI’s tap of the supportive moving average in relation to SPX. I am not touting the sector (which I am long), merely stating some facts. Also, there’s the SOX>NDX>SPX thing in good working order.

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