A Review Of Market & Macro Indicators

Equity Put/Call ratio continues in its 2016 downward trend. This has supported the bullish view ever since we identified the breakdown in the previous CPCE uptrend. The market is doing its part thus far, by holding key support.

equity put/call ratio

VIX held support last week and in line with the idea that risk will be ever present if this market goes manic up, we can expect periodic flare ups like the 3 orange dots that have cropped up during 2016 alone.

vix and s&p 500

Junk bonds have held the highs in nominal terms and also been firm for most of 2016 in ratio to higher quality bonds. This is and has been an ongoing signal that a manic bull phase can erupt. Again, I don’t make the charts; I just pull them up every weekend, shake my head just like you and then tell you what I think they mean.

hyg, junk bonds, investment grade and treasury bonds

Commodities continue not to show a pulse vs. the US stock market.

gcc vs. spy

Yet the highly speculative TSX-V made a bullish signal, which is being tested now.

cdnx vs. spy

The same signal is easing a bit in Canada.

i-cdnx-tsx

While the US inflation expectations barometer decides whether to hold support and break above the trend line or fail. Right now, it’s in process to one or the other.

tip vs. tlt

Silver-SPX maintains a bullish stance, though in consolidation.

silver vs. spx

Silver-Gold ratio (SGR) and CRB should eventually correlate. SGR is on a bullish trend change signal until it no longer is. That is a bullish underpinning for commodities, the case for an inflation trade and most asset markets with the exception of Treasury bonds.

silver-gold ratio and crb

Nor would a rising SGR (declining Gold-Silver ratio) be a positive for USD.

gold-silver ratio and us dollar

BKX and Gold each continue to hold support. Both items would probably benefit in an inflation phase, if it results in rising rates and yield curves.

bank index and gold

Said curve is not however, rising in any kind of trend.

yield curve

It bounced last month. Was that a start? To be determined.

yield curve

Here are the nominal 10’s and 2’s. The markets have mostly been on the deflation theme after FOMC packed its bags for its break until November. FOMC fretted again about inflation not being quite high enough and the market has hinted that it believes them. But the 10 year yield bears watching in its little 2016 trend line break.

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