Inflation Set to Expand?
The chart below shows TIP, or a vehicle that tracks inflation-protected treasury security prices, with a gold overlay. When TIP is rising in value inflation-protected securities are being bid up in anticipation of inflation rising; when TIP is declining it…...
Draghi Disappointment Unlikely, but Half-Life of Intervention Diminishing
Below you’ll see the ratio of the EUFN (MSCI Euro Financials ETF) vs. XLF (US Financials ETF). Note the long-term downward sloping channel b/t lines (1) and (2) it’s traded in over the period in which we have trading history…....
Should History Hold, USDMXN at Multi-Decade Channel Resistance Signals Potential for Pivot Higher in Risk Assets, Inflation
In the first chart below I show USDMXN (USD vs. Peso). For nearly two decades back to the latter part of the 90s USDMXN has traveled in an upward-sloping channel b/t lines (1) and (2). Over time it has reached…...
This Industrial Company’s Break-Out from Two Years of Consolidation is Bullish, but Also Signals the Potential for a Similar Move in Broader Equities
In the chart below ITW has, as of today (if gains hold), officially broken out from a ~two-year consolidation/flag pattern b/t lines (1a) and (2a). The stock should be bought on this break-out. However, at the same time, note how…...
SPX Technicals Suggest Fair Value of ~1,400
Perhaps the simplest, yet most elegant way to think about fair value for the SPX is to view it through the prism of the long-term technical chart below. In that chart you’ll notice the index has traded in an upward sloping…...
GREXIT
If one recalls, one of the first-ever posts on this site provided a framework of what would likely happen to Greek stocks and the Drachma were the country to exit the EU. It’s been nearly four years since that post and Greece has…...
A Look at Gold Miners
I’ve relentlessly made the case for gold on this site over the past year or so, believing a major bottom was approaching. Less focus has been placed on the miners, but it’s worth visiting that group as the rally they’ve…...
MSFT Attractive vs. AAPL
I’ve beat the tune of the bullish MSFT drums on this site dating back to 2013. Most recently I suggested a spread trade b/t it on the long side and an INTC short on 1/9/16 in this post using this…...
The Federal Reserve’s Epochal Bubble-Creating, Cycle-Breaking Abilities
The Nasdaq reached a new all-time high in late-2014, surpassing the previous one it put in place in the early 2000s at the height of the tech bubble. This successful reclamation project was quite a feat – in accomplishing it…...
Has Russia Signaled the end of the Global Emerging Market Bear Cycle?
Over and over we have used the DJI over the course of 1904-1914 as an analogy to emerging markets (via EEM as a proxy) from 2004-current. Conversely, we’ve belabored the idea that 1937 and/or 1974 are the best analogies for…...