Inflation trends UP

Below is the graph of Barclays TIPS bond fund which clearly shows that inflation excpectations continue to build up. TIPS are early birds of inflation expectations. Recent run up reaches some higher valuations and we can some technical correction to the downside given overbought conditions on daily graph. Anyway trend remains to the upside and weakness seems to be met with new fresh buying.

Natural Gas – Very Bullish Double Bottom

Natural Gas futures are forming extremely bullish DOUBLE BOTTOM formation on weekly chart. Natural gas futures were in contango lately due to never ending issuance of new shares of UNG ETF. Keep an eye of this energy future for some balistic moves in weeks ahead.

CHINA – Rock solid UPTREND

The whole world is trying to get short stocks in developed world instead going with the flow with China. After golden cross (MA50 &200) Shanghai stock exchange managed to stay in rock solid uptrend without any significant setback.

More on markets cycles

US 10 Year Yield 5 Year cycle – Next low due in 2013 ?

S&P500 – 4 year cycle

Proshares Ultra short TBT – Bearish Engulfing pattern

One of my favorite reversal patterns – Barish Engulfing is in place on Proshares Ultra short TBT ETF chart. Is it time to go long bonds? Maybe if we follow seasonlas but lets wait for more confirmations that bonds sell off is over.

Bond market cycles

Below is graph of 20 year bond ETF (TLT) as you can see bond market move in cycles as everything in this world .  In my opinion recent sell off appears to be very strong and trend remains to downside.

Anyway if cycle is still valid we will see this cycle low next few weeks or the trend will continue to higher interest rates (lower bond prices).

BRICs – Extreme overbought but still in bull trend

BRIC ETF (BKF) rally hit the wall as technicals showing huge overbought conditions (RSI @ extreme levels). Anyway medium term technicals remain bullish but short term market will correct overbought conditions.

S&P 500 – Descending triangle in a making

S&P500 is forming Descending triangle which by definition is a bearish formation. I am not sure whether this one can produce sell off from these levels. My opinion is that technical picture is rather messy here and developed markets now follow Emerging markets (asian ones).  Bonds sell off can explain some recent strength of equities.

Anyway the world now is full of disbalances which are main drivers of trends (medium term trends of S&P is still bullish as shown on graph below) . My advice is to stick to trends and don’t try to overthink the markets.

S&P500 – Rally is losing momentum

S&P 500 – had extremely nice rally from march 09 lows but going into mid may as seen at graph below rally is losing momentum (MACD diverging). I think market is about to correct overbought (RSI is very high) conditions in SPY with possible target on downside around 875 area. I am not bearish on bigger picture but i think we are about to get in range bound market going into summer.

1-2-3 Trend Change pattern in 10 Year T-Note

Inflation on the horizont ? Answer of this question is in US 10Y T-Note.

1-2-3 Pattern is very powerful trend change pattern and i would buy the breakout (via ultrashort ETFs) if it happens in days and weeks ahead .