Some risk off indicators looking pretty nasty…
Long-term T bonds breaking out of a short-term pattern vs. the stock market.
Inflation expectations (by TIP-TLT ratio) tanking. Don’t worry gold bugs, the metal’s preferred scenario does not include breakout inflation hysterics at this time.
Junk bonds continue to tank vs. investment grade and Treasury. Side note, nominal HYG is breaking down from the trend line shown this morning. See Bearish Divergence.
A curious holdout is gold vs. silver, although after a hard plunge on geopolitical hysteria, it is maintaining support. An upturn in the gold-silver ratio could be most unwelcome for asset market participants considering the mess already noted above.
There you have it, on balance some macro charts looking pretty ugly for the short-term view of the stock market. In fact, the only bullish external stimulant stocks seem to have going is the Ukraine issue. That puts a caveat in the risk ‘OFF’ indicators, but the junk bond ratios for one, have been going on a lot longer than this most recent acute issue with Ukraine, Russia and crashing airplanes.*
* Not to minimize such a tragedy as merely a risk ‘off’ indicator.
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