Commodities Topping? Real Rates Rising? Tech Falling?
已更新
Real Rates have served as a forward looking indicator for Tech and Commodities.....
This post at its core is a reminder that: As inflation expectations fall: real rates move higher. A high inflation expectation leads real rates to move lower allowing markets to rise. Read that again. A high inflation expectation leads real rates to move lower allowing markets to rise. This is the feds goal to rise inflation expectations. Keep this in mind when, the fed puts a hawkish mask on....
1. Real Rates (1/TIP) and Tech (QQQ)
The chart in turquoise shows Real Rates (1/TIP). As you can see when Real Rates rise the Tech Market (QQQ) in blue falls. An inverse correlation! Stocks react to movements in Real Rates. Look at the two charts it seems like Real Rates move first then Tech.
Since November, Real Rates have been trending upward while, the Tech Market has trended downward. Until their respective channels are broken Tech remains bearish and Real Rates bullish. The rally in Tech experienced the last weeks was the result of bond yields falling. As bonds are purchased the yield lowers and Tech stocks benefit from lower yields. This counter rally we are in the midst is not convincing investors yet. The Bias is to the downside in QQQ and a rise in real rates. As, Bonds are bought up as a Safe Haven trade, tech can see continued strength. However, Real Yields look to be bouncing from the middle of the channel upwards while Tech looks to be running into resistance, in the channel middle, heading downward. It's hard to be quite certain of the next move but there is currently better evidence that there will be downside in QQQ and rise in real rates.
2. CRB - Commodity Index
Commodities have been on a tear recently but, they are reaching a resistance zone just as nominal yields reach their own resistance zones. The yield curve is flattening as long dated treasuries struggle to move up and the shorter dated ones are being influenced by the FEDFUNDSRATE causing them to rise. Even if you believe Commodities are heading into a super cycle, this area is still prime for a higher degree correction. 206 looks more reasonable than 320. But of course, supply issues (Ukraine+Covid) can cause commodity prices to continue to increase dramatically. If you are interested in trading commodities; I highly recommend picking individual commodities either through funds that hold the physical commodity or futures instead of commodity etfs or miners. SRUUF (Physical Uranium) is my friend here.
\\\In my last post, I explain how real rates affect GOLD.
s/o ARTTV for showing me how to see real rates in TV.
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3x'd in Tellurian . 2x'd UNG -
2.5x'd CCJ (Uranium Miner)
Predicted Bond yield and Yield Curve.
Top in Aussie, Canada, Kiwi dollar from 2021.
.
DXY is not paper.
Coal futures Score
Silver rangebound
This post at its core is a reminder that: As inflation expectations fall: real rates move higher. A high inflation expectation leads real rates to move lower allowing markets to rise. Read that again. A high inflation expectation leads real rates to move lower allowing markets to rise. This is the feds goal to rise inflation expectations. Keep this in mind when, the fed puts a hawkish mask on....
1. Real Rates (1/TIP) and Tech (QQQ)
The chart in turquoise shows Real Rates (1/TIP). As you can see when Real Rates rise the Tech Market (QQQ) in blue falls. An inverse correlation! Stocks react to movements in Real Rates. Look at the two charts it seems like Real Rates move first then Tech.
Since November, Real Rates have been trending upward while, the Tech Market has trended downward. Until their respective channels are broken Tech remains bearish and Real Rates bullish. The rally in Tech experienced the last weeks was the result of bond yields falling. As bonds are purchased the yield lowers and Tech stocks benefit from lower yields. This counter rally we are in the midst is not convincing investors yet. The Bias is to the downside in QQQ and a rise in real rates. As, Bonds are bought up as a Safe Haven trade, tech can see continued strength. However, Real Yields look to be bouncing from the middle of the channel upwards while Tech looks to be running into resistance, in the channel middle, heading downward. It's hard to be quite certain of the next move but there is currently better evidence that there will be downside in QQQ and rise in real rates.
2. CRB - Commodity Index
Commodities have been on a tear recently but, they are reaching a resistance zone just as nominal yields reach their own resistance zones. The yield curve is flattening as long dated treasuries struggle to move up and the shorter dated ones are being influenced by the FEDFUNDSRATE causing them to rise. Even if you believe Commodities are heading into a super cycle, this area is still prime for a higher degree correction. 206 looks more reasonable than 320. But of course, supply issues (Ukraine+Covid) can cause commodity prices to continue to increase dramatically. If you are interested in trading commodities; I highly recommend picking individual commodities either through funds that hold the physical commodity or futures instead of commodity etfs or miners. SRUUF (Physical Uranium) is my friend here.
\\\In my last post, I explain how real rates affect GOLD.
s/o ARTTV for showing me how to see real rates in TV.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
3x'd in Tellurian . 2x'd UNG -
2.5x'd CCJ (Uranium Miner)
Predicted Bond yield and Yield Curve.
Top in Aussie, Canada, Kiwi dollar from 2021.
DXY is not paper.
Coal futures Score
Silver rangebound
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