A weaker inflation indicates weak demands, and weak economy. And it will be bad news for housing, for commodities, etc. So let's hope this thing can turn around soon.
TIP lost another dollar and change this month (so far), 10 month MA is pointing downward. RSI broke trend and MACD is negative. So Fed can raise rate at this point? I do not think so. Also no point for Fed to raise rate at a time when commodities are crashing, and China is floating their currency down. I expect more unwinding of rate hike expectation, and thus...
TIP started June with a bearish tone with support broken (tentatively). Note the serial lower highs since last October and downward pointing 10 month MA. RSI is weakening with broken support and MACD is turning negative (so far). With this backdrop I highly doubt the Fed will raise rate any time soon, as that makes no sense.
TIP is weakening since the start of the year and is now breaking the red support. TIP usually is used to hedge inflation risk for bond investors (it has 13.68 B asset with a yield of 1.63%). Note the 10 MA is rolling over and now pointing down. If TIP is falling, meaning investors do not worry about unexpected inflation. I think this is one reason the Fed may not...
going a bit higher since last update... will be very bullish if blue lines are cleared (meaning higher inflation figure, and/or expectation). Note 10 MA is already cleared.
Dollar faces double resistance with lost momentum. Meanwhile assets inversely correlated with dollar seem to be doing better. If dollar is weakening in the next several months, these assets may be favorable. Conversely if dollar breaks out and continue to strengthen, these assets will be pressured even more. I will watch the red support lines closely.
If breaks down, long gold has to be uncorrelated
Dollar is getting stronger recently, but a stronger dollar does not mean much if it is weaker than inflation. This DXY/TIP ratio chart tries to show that technically dollar is rising but is still weak comparing with inflation protection bond. Before I hold dollar for long term investing, I would like to see at least: . the ratio breaks the blue resistance line...
Energy (VDE), material (VAW), commodities (DJP), inflation protection (TIP), gold (GLD) and bond (TLT). I am not certain why (probably because of weaker dollar, as shown on the chart), given this, current dollar and rate on their monthly charts are indeed very weak so can these assets perform well during first half of next bear market? Only time can tell. Good Luck!
Coincidentally, TIP has a reverse head and shoulder breakout. This seems to suggest inflation expectation is on the rise, and owning GLD is more favorable than owning DXY (dollar).