February 16, 2021
The markets are in a time window for change. While the long-term correlation between the bonds and stocks will become positive later this year, the short-term relationship will continue on its counterbalancing framework.
With our focus here on the long bonds, it appears they have completed another leg of the new secular bear market. In the first chart CT pegs the low hit last Friday as the end of short term wave one in the longer I-T wave (3). Hence based on EWT, this market is just weeks away from going into a full-fledge – everyone sees the bear – sell-off.
The chart window on the left shows the Tidal Trend system short from right after the panic buying peak. Today all three trend-following indicators on that chart are trending lower. Our stand-alone “panic” index (not shown ) on the weekly chart is at 64 with 65 or higher being a bell ringer.
January 14, 2021
The union of European states does not have the same underlying language or the same underlying culture.
Without such the Euro has an inherent emotional weakness to stay together in times of strife.
January 6, 2021
USD In the 12/14/20 update
December 21, 2020
Why take a 50% drawdown risk for the average annual return of 10%? Because major declines can’t be timed, so they say.
December 14, 2020
The traditional move late in the cycle is to buy offshore bonds in a stronger currency than the USD. This tact has worked over the last twenty years but that regime is changing.
USD makes a long-term bottom; one more decline to the low 90s is in gear and touch with the COTs due this week. The bar chart pattern is a horizontal triangle, which supports a thrust lower and a terminal move, not the beginning of a new trend.
December 9, 2020
Contrary Thinker deals in Time, your preparedness, not fear.
“Let me admit something. There is no Bond King or a Stock King, or an Investor Sovereign alive that can claim title to a throne. All of us, even the old guys like Buffett, Soros, Fuss, and me too, have cut our teeth during perhaps a most advantageous period, the most attractive epoch, that an investor could experience. Since the early 1970s when the dollar was released from gold and credit began it’s an incredible liquifying total return journey to the present day an investor that took marginal risk leveraged it wisely and was conveniently sheltered from periodic bouts of deleveraging or asset withdraws could and in some cases was rewarded with the crown of greatness. Perhaps, however, it was the era they made the man as opposed to the man that made the era.”
Bill Gross, Man in the Mirror April 12, 2013
December 1, 2020
Long Term Bearish Since Panic Buying Top on Long Term charts from March to August 2020. The dynamics are changing.
It’s been pointed out that the junk bonds are staying in gear with stocks even though they have not confirmed new highs for several years and continue to underperforming. I would still watch that group for a breakdown as a sign that risk assets are coming undone.
In the meantime, the amount of debt is not a concern to the fiscal policymakers in the wing, and fear is starting to break higher measured by the CBOE interest rate volatility data. In fact, contrary Thinkers volatility composite has tested olf support successfully and is moving higher, another sign that risk-taking is becoming extreme.
November 30, 2020
Intermarket relationships are ephemeral, valid for the short to intermediate-term at best. The imputed market wisdom is when gold goes up US dollar declines and while the greenback advances the precious metals go down. But since late September both markets are in a decline; and both into a decline of a major COT time window according to our MarketMap change of trend dates. With today being a key date, November 30.