The economy and the stock market depend on inflation. Get serious giddy stock bulls, they inflate, you make money.  They fail to inflate and the tide turns deflationary, your gains go poof, money heaven.  I’ll dig out some of those policy-profits-S&P 500 corollary charts again soon enough.

The relationship between TIPS (inflation protected) and TLT (regular long-term T bonds) is one indicator of inflation expectations and while it seems to have spent the last 2.5 years in bottoming mode (allowing Goldilocks to pig out on porridge) it is still going nowhere.

TIP-TLT ratio weekly, from NFTRH 277

‘Great, no inflation problem and we continue to pig out!’ thinks the average lazy stock bull.  But this time, the stock market is failing to rise in gold terms and that among other things indicates that the nature or the character of the bull has changed, if nothing else.

No Goldilocks?  If that is the case one could extrapolate further to say that if this trend continues, the great US stock bull is now as vulnerable as any other market or asset class to a would-be deflationary issue.

Just nerding around here.  But it’s a nerd’s market people.  I believe that.  The majority are busy thinking linear and assembling for their proper roles within the coming changes.  Nerds! Nerds!! NERRRRDDDSSSS!!!