This chart indicates ‘reflation (still) on’
So you see, sometimes a man stares at a chart and that same man sees what cannot be argued. * Man sees the following market ratios in the context of their post-March 2020 history.
Historical fact: The hellish inflation conjured back then (see graphs below man’s chart) is still rooting in the economy, created by the Fed and cost-pushed by government and the simple fact that not enough people are getting off the couch, post-shutdown, to fill all the jobs available.
These charts are logical to the inflationary backdrop. Each and every one of them in concert and making complete sense. The fact is that gold and bonds, the safe havens of H1 2020 are on the outs in relation to the things that were the inflationary targets of the Fed to begin with.
- Stocks… why of course! Here we see the tiniest hint of a developing negative macro, which if it becomes something could interrupt the party.
- Commodities… it happens by extension when the economy is pumped toward reflation.
- Speculative instruments like Junk Bonds… yes, the Fed wants you in and speculating otherwise how else are they going to gin this thing up? They are the spark, you are the motor.
Anyway, here are three graphs. The first two provide a looking glass into the spark. The third is the picture of the ongoing inflation. Motor on dear casino patrons; motor on.
* Of course, the man/goats/charts shtick was originally the product of my having seen way too many TAs ascribing way too much importance to the projections they make. As if the complex and sometimes mystical things they see in their lines, squiggles and notations can see the future for we mere mortals. They can’t. But the chart above is simple historical fact accompanied by my interpretations, which are not fact, but well, they are.
For “best of breed” top down analysis of all major markets, subscribe to NFTRH Premium, which includes an in-depth weekly market report, detailed interim market updates and NFTRH+ dynamic updates and chart/trade setup ideas. You can also keep up to date with actionable public content at NFTRH.com by using the email form on the right sidebar. Follow via Twitter @NFTRHgt.