A daily chart look at the progress of the simple macro picture we are tracking, the 30yr yield Continuum vs. the duo of USD and Gold/Silver ratio.
The daily chart of the 30yr yield is popping above the SMA 50 with a nice RSI and a constructive MACD. I am watching the Bank sector (KBE) for possible addition here but trying to be patient for the moment. This is the pogo market (indicators jumping up and down daily) but if this signal follows through we’d be looking at a success for the right side shoulder of the 30yr yield Continuum’s monthly chart (reviewed so often I don’t think I need to include it here).
On the other side of the macro are the US dollar (DXY) and the Gold/Silver ratio. In NFTRH 671 we noted that USD was not broken but had pulled back appreciably after the Powell dove routine. Today it’s taking a bounce and very tentatively taking back the neckline to the theoretical inverted H&S.
Meanwhile, the Gold/Silver ratio, which has maintained its fledgling uptrend despite a post-Powell pullback, has not made a move to confirm USD’s pop.
The macro (by these indicators) has not yet made its decision, but the yield does look constructive for more upside if this is not just another pogo stick bounce, which immediately post-Labor Day is quite possible.
If the yield goes bullish for real (I still hold and may increase TBT, which is a rising yield play) we’d expect initially at least for the reflation-sensitive stuff to out perform and the gold sector for prime example, not to, as had been the case since the yield began rising in August of 2020.
More to come as events unfold. I just want to get us a look at the macro view this morning.