November 8, 2019
In the face of weak economic sensitive charts like housing, 10% Repos, Trump/Xian news, US treasury rates spike, gold hits the skidder and commodities break the long-term downtrend. Given all the inter-market confliction the dollar uptrend persists
US Homebuilder stocks tumbled
It was a bloodbath in bonds today as Treasury yields exploded higher… with
Yields broke mid-September highs, breaking back to their highest since Aug 1st…
Source of the above charts Bloomberg.
Background – TEM- continues to have a background that suggests a move away from the low volatility trend to a more forceful one. A move above par suggests a rally to 103.00 based on ratio projections. 100 is the dollars long term resistance and new higher targets are expected come January 1, 2020.
Contrary Thinker’s featured chart of the dollar shows its sure and steady advance all week, taking out S-T and Day Trader resistance levels.
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November 6, 2019
The Dollar is at an extreme, a position where it needs to breakout or fail. The background – the context – supports a trending moving for whatever direction it takes. A move to 103 would still allow a correction in 2020 back to the mid 80.s before the secular bull market resumes.
The old school is out in full force, the equity bears who think the old Intermarket of the dollar down gold up and the stock market down is stuck in the ’70s. The old school is Gold competes with stocks. Since the turn of the century, they are in the same risk boat.
Gold has failed to be a hedge, looks to have uncoupled itself as a safe harbor. The charts show the market is complacent at this point, seeing no risk, after completing a head and shoulder’s top. The tidal wave system is now short the market, as well. Silver will follow.
In a phase Risk Off, that includes the metals
Furthermore, if there is no yield in most government-issued bonds they are now a risk asset also, as you can only make money via capital gain, yes? The US T-bonds are testing low, and a break confirmes the peak is in place.
The peak of the bond markets was on panic buying, just like all the other markets in reaction to the Fed succumbing to White House pressure to lower rates and print money. Gold and bonds both peaked in all time frames on poor or panic buying.
Commodities are starting to perk up via the S&P World commodity index. This has been a non-factor for decades. Rather the risk has been on the other tail, that of Deflation. In this regard, the commodity averages are in new uptrends. The other breadbasket of the world is Australia; their buck is at an extreme, where it is either going to breakdown suggest deflation – or fail to breakdown and reverse, which supports inflation.
With Crude at the apex of a horizontal triangle, direction to be determined by the break.play the break. The risk is that it dribbles out of the pattern.
The chart of the Dow Utility index portrays a rare expanding diagonal triangle. If valid the defensive market should go into a free fall back to where this fifth wave advance began at point (4) on the chart. Action out of triangles is typically a high rate of change affair. TEM supports the idea.
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