Author: Gary Tanashian

Updating The 3 Amigos And The Global Macro Message

Posted on by Gary Tanashian

This morning in pre-market the Amigos’ futures charts update the macro story…

global macro

…which goes something like this…

Copper, the cyclical Amigo (weekly chart) has furthered the intermediate trend line break we noted on October 25th. This is in line with the rally in US and global stock markets and even more so, the global macro reflation theme. It does not look so impressive yet on this weekly chart, but other components of the macro trade are starting to look impressive, especially on daily charts. So… steady as she goes. Continue reading "Updating The 3 Amigos And The Global Macro Message" →

Silver & Gold To Inform Dr. Copper

Posted on by Gary Tanashian

They call copper the metal with the Ph.D. in Economics. But these days Doctor Copper is little more than a quack in that regard, taking a cue from the metals whose interplay will be critical to deciding the coming macro for 2020 and the run-up to the next US election. Thus, they are the 3 Metallic Amigos, riding together but providing different signals at different times (this being nftrh.com, you will have to put up with the odd shtick from time to time).

Silver Gold Copper

As we have noted repeatedly, the Silver/Gold ratio takes it place alongside other indicators (like long-term Treasury yields, yield curve, TIPs ratios, inflation breakevens, etc.) of a would-be inflationary environment. When silver (more cyclical, commodity-like characteristics) rises vs. gold (more counter-cyclical, liquidity haven characteristics) it is a hint toward an inflationary macro.

A daily chart of silver/gold shows a constructive ratio at yesterday’s close and this morning in pre-market silver is +2.77% while gold is +.77%. The implication could well be an end to the current bull flag consolidation at the moving averages and the next upturn in silver/gold, the miners and possibly the inflation/reflation trades that tend to follow. Continue reading "Silver & Gold To Inform Dr. Copper" →

The Gold Stock Correction And What Lays Ahead

Posted on by Gary Tanashian

What’s In-Play Now

It has been about 2 months since the gold stock sector, as represented by the HUI index, topped out. The ensuing correction has been a whipsaw affair of ups and downs, but smoothing that volatility out we find an ongoing correction in time and price that has not been too difficult to manage.

The pattern that some would call a “complex H&S” (TA-speak for a freakish pattern with too many shoulders) held a key lower high on the recent bounce to the daily chart’s SMA 50 (blue line). The neckline has been tested (and held) twice since it was created in September and the negative RSI divergence that began last summer has been guiding Huey downward.

hui

It’s all normal and by the chart above you can see the targets, which have been 195 (minor support) and better support at the convergence of a lot of markers, including major breakout support and a gap at 180, the rising SMA 200 (183), a 62% Fib retrace (182) and finally, the pattern’s measurement at around 172. That’s a lot of technical traffic pointing to the 170s-180s for the correction’s ultimate goal, which is to wash out the excess.

And excess there sure was, as we noted well ahead of time in NFTRH using this chart showing how far HUI got ahead of what I consider the most important macro fundamental indicator for the sector, gold vs. stocks and in particular gold vs. the US S&P 500. Continue reading "The Gold Stock Correction And What Lays Ahead" →

Inflation In The Offing?

Posted on by Gary Tanashian

Let’s take a look at some indicators that can come together to let us know when the next inflationary bout is in the offing.

The spread between 10yr and 2yr yields (the most commonly watched yield spread/curve) is still steepening on the short-term. Live chart available here.

yield curve inflation expectationsWhat’s more, it is doing this against a short-term bounce in yields (my TBT positions appreciate that) and that would be an inflationary indication. Not a trend, an early indication.

Indeed, the Continuum is once again climbing above the key 2.2% level.*

inflation expectations

TIP/TLT and TIP/IEF, commonly thought of as inflation expectations gauges, are bouncing but not yet on a trend change to inflationary. Daily chart… Continue reading "Inflation In The Offing?" →

Silver/Gold Ratios Is A Guide As Inflation Signals Fade Again

Posted on by Gary Tanashian

The interplay between gold and silver is a critical component to understanding what is out ahead; to understanding whether long-term Treasury yields will rise and if they rise, whether it will be due to inflationary pressures. It is a critical component to understanding whether cyclical commodities and other aspects of a greater inflation/reflation trade will finally break existing downtrends. See…

The Continuum is Still in the Deflation Camp (9.24.19)

Pictures of a Reflationary Bounce-a-Thon (9.11.19)

The first and more recent post noted that the 30yr yield needs to climb above 2.2% to even think of hinting toward a temporary inflation trade. The chart from that post shows that while the Continuum is of a long, deflationary structure the periodic pings upward to the (monthly EMA 100) limiter often represent times of cyclical inflationary bursts. This morning the 30-year yield stands at 2.15%.

long-term treasury yields

As for the older post linked above, it was personally a little difficult not to buy in (other than for a couple of ‘bounce’ trades) to the prospect of the global inflation that Central Banks are trying to summon. But that post and others have routinely shown intact downtrends in the inflatables. So it was a case of ‘break the trends and we’ll talk inflation trade’. Here are the daily charts of the CRB index and a key headline commodity. Continue reading "Silver/Gold Ratios Is A Guide As Inflation Signals Fade Again" →