A question of Keynes vs. Kondratieff
Until recently, the sovereign debt of nearly all governments would rally during panic episodes as stocks and commodities fell. This makes sense, as strong sovereign debt is cash for big boys, and investors are forced to reach further and further out for yield as short-rates are driven to zero or [...]

I don’t know exactly what to make of this pattern, but it is not unusual to see these two move together. As forms of cash, they each tend to do well when the deflation trade is on. In fact, other than short positions, they are the only things that beat the dollar when everything else [...]

Don’t sell short the Yen just yet. It is wedging up to the highs and still seems to find a bid when stocks fall. I noticed this large wedge on the USD.JPY 5-year:

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A breakout of that wedge will be bearish for Yen, and a nice spot to think about shorting. For now, I’m letting [...]

Sentiment is still really lousy and downside momentum is waning. This is the same condition that persisted in the dollar from August through November before violently clearing. No telling how long this holds up, but I would not want to get caught short without a stop here — one day you could wake up and [...]

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The CAD and NZD look basically the same as the Aussie. Incredibly, the Euro may not bounce much more at all, but continue to slide, just like the dollar did for so long.

The Aussie and Loonie lead on the way up, and they are now starting to wobble. This doesn’t mean their tops are in, but it means we should be on the lookout for a turn:

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Look at the similarity between the March 2008 peak and immediate aftermath and what we’ve seen since the December high in gold:

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Sure, there could be a little more oomph here for a push like that close second peak in ‘08, but just because gold hasn’t dropped like a stone doesn’t mean the mania will go [...]

I glanced at the markets at 4:30 just in time to see every “risk” market spike down hard together. That kind of instant, coordinated movement only happens on announcements, usually something out of Washington. Turns out the Fed spooked traders with news of a 0.25% hike in the discount rate, the rate at which distressed [...]

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Note the upsloping daily RSI from very oversold conditions. Sentiment remains highly negative, so any upward movement would surprise the majority of traders and possibly result in a short-squeeze like Sept 08.
You don’t have to be very sure that the euro will rally — I’m not — to take this trade. The recent lows make [...]

A lot of markets have had more than sufficient clearing rallies, and their charts would exhibit a nice proportionality if they were to top right around these levels. I think it’s likely that they meander or float a little higher for the next 2-5 days, but they could just as easily reverse hard at any [...]