The Deflators
December 1st, 2008 at 6:12pm · 4 Comments
The markets returned to their classic deflation formation today, stocks, gold, oil down, and the yen and bonds up. Gold has turned down from its upper channel on the daily chart. The bottom of the channel is at 681. Oil generated a net-line sell below $50. The news reports that various middle-east governments would be ‘happy’ with prices in the $75. to $80 range. Of course, they didn’t feel that way in July when prices were $147. I suspect oil won’t see $75-80 again for a while. At least not until the dollar heads lower.
Speaking of which, I think the timing challenge in coming months will be to pinpoint the ultimate top in the 30-year bond. That top will mark end of the deflation, and will also be the signal to move out of the dollar in a hurry. Just as the ulitmate oil top last July was the final piece that allowed the commodities bubble to implode, an upcoming bond top will have similar significance in the big-picture cycle outlook.
click chart to enlarge
click chart to enlarge
click chart to enlarge
Tags: Bonds · Crude Oil · Gold
4 responses so far ↓
1 clausberlin // Dec 2, 2008 at 3:21 am
The end of the rather mature secular bond bull market will probably be the beginning of a totally different financial environment, no matter when it’s going to happen. Historically bonds peaked only months after a recession ended, so it may be early to start looking for a turn. But we all know that this shift will be extremely important, so we better don’t miss it. Are you willing to publish spiral calendar dates for the bond markets?
2 deacon31 // Dec 2, 2008 at 8:34 am
Chris xlnt post on bonds, treasuries are now in ‘bubble’ phase…
34 day ema has been in play, with DX turning up off the touch, and YM diving from 2 touches, and GC low monday was a touch…34 ema 60min at 840 ES
3 moga // Dec 2, 2008 at 10:10 am
Do you have a time table when the deflation play will end, a.k.a the bonds will implode and the price target to watch for this end game? Will it then be time to buy equities or to buy TIPS and go long Yen?
4 deacon31 // Dec 3, 2008 at 1:47 pm
on pit spooz(SPZ) the oyster 72sma held tuesdays advance on 30 min chart, how we seem to have a nice symmetrical head & shldrs on same 30min chart weds. right ahead of beige…interesting since the blogs are full of the inverted head and shldrs calls targeting well above 50MA’s…traditional mcclellan osc totally overbought now
You must log in to post a comment.