NFTRH+; updating the risk ‘on’ speculative & ‘inflation trade’ environment

Junk bonds (HYG) have held above the 50 day average, indicating that risk is still ‘on’.

Junk/Investment Grade (LQD) has recovered strongly and is flipping positive as well.

Junk/Treasury (20+ & 7-10yr) is also recovering.

The above are not signs of an impending bear market or even a major correction in process.

Moving to the more inflation-sensitive end of the speculative macro the TSX-V (CDNX) should double bottom here to keep that play in play.

Also, TSX-V/TSX ratio, which we have shown to correlate long-term with inflation expectations, needs to double bottom and turn up to indicate that the fading inflation of the last several weeks may be ending and the more speculative inflation trades could get going again.

In that regard, RINF, the inflation expectations ETF is thus far holding the 200 day average and bouncing from that marker. In other words, as of now the major trend is still up despite the hit to the inflation trades over the last month.