Targets for TIP (inflation protected treasuries)Targets for TIP (inflation protected treasuries) as defined on Point and Figure chart. $TIP $RINF #patience #gold #silver $slv $gld #fintwit $sil $silj $gdx $gdxj $dxy
TIP trade ideas
TIPS Real yields and interest rates are near perfectly negativelTIPS
Real yields and interest rates are near perfectly negatively correlated to Gold, Silver, and the miners. Therefore, the prices for Treasury Inflation Protected Securities (TIPS), which are the inverse of real rates, are near perfectly correlated to precious metals and miners: TIPS fall, Gold falls, and vice versa. TIPS had been falling in corrective fashion lately but are also undergoing a short-term rebound, just as in Gold, etc.
TIPS hint of a S&P500 breakdown...TIPS is an leading indicator, according to Russell Napier, and it is one of the few leading indicators that have been shown to pre-empt market movement (most of the time).
In this comparison daily chart of TIPS and the S&P500 (orange line),you can see the recent lead but TIPS, and it is now under a Sell signal, with technicals pointing to the end of the bullish rally. And yet the S&P500 is weakening, stalling and just about to roll over.
TIP is about to breakdown a trendline, and MACD is also rolling over into the bearish territory, soon.
A thought to consider...
Market direction TIPS!Interesting correlation and a leading indicator I picked up from Russell Napier since November 2008. He gave me a tip about TIPS, available in his book Anatomy of a Bear. TIPS is one of the leading indicators used by RN.
In this correlative analysis, TIPS gave a heads up of the unsustainable rally of the equity market with a bearish divergence in the MACD. Now that it has broken the second uptrend line, and MACD crossed down, it is good indication that done and dusted a top is done.
The blue line is the S&P500 futures ES1! for reference. You can see previously TIPS precedes the S&P500 in a retracement and a rally. The current time is a concomitant drop, which may indicate the volatility involved (and the depth perhaps).
[Long] Where does TIP stop?TIP is in a strong strong uptrend. Where does it stop?
Where does inflation stop?
When do yields rise?
Hmm.
Accelerating Inflation is the Elephant in the Room Back in early October I posted a commodities chart. On that chart I shared my thesis that Gold's 6-year breakout in May would retest and commodities would follow on the next leg up. I later posted that "unofficial QE would add fuel into inflationary forces". With Gold breaking out of its healthy correction, inflation hitting 9-year highs, the Fed saying they will not raise rates until they see and significant and sustained increase in inflation and the fundamentals deteriorating, I see the potential for a huge surge in inflation in 2020 and 2021. Especially because its the trade that is most unhedged. Most investors are prepared for deflation - aka if stocks and real estate fall. Almost none are prepared for a rally in inflation, falling dollar, and surging commodities.
Strong breakout in TIP with very strong volume. The TIP Bond ETF is a way to hedge yourself against rising inflation and as a way to visualize inflation sentiments in the market.
Notice the 3 lows at support coincided with Gold's low in 2013, generational low in 2015, and then in late 2018 when the Fed was being very hawkish, talking about autopilot QT and 4 rate hikes in 2019. Additionally, the moving averages and volume are showing there's more room for growth.
The more I look at the facts, rates of change, and the charts, the more I'm convinced the US dollar simply cannot maintain its current level. The Dollar has been flat at 96-97 in 2019, which is impressive given all that has happened.
Fed promising to not raise rates until we see a significant and sustained rise in inflation. Federal debt is growing at an unsustainable rate. All-time high twin budget deficits. Additionally, the Fed did a massive U-turn and provided massive liquidity to the market in 2019 due to the 3 rate cuts and QE on emergency levels. Silent QE is growing faster than during official QE. The fiscal stimulus from record spending and tax cuts plus the massive monetary stimulus has helped push us to 9-year highs in rate of change for CPI inflation. Since Q4 2018, Gold has increased from 1180 to 1550 with a high correlation to the TIPS ETF and gold stocks have outperformed the S&P500. The inflation move has already started and few are seeing it, but most investors remain oblivious or unprepared for a significant and sustained increase in inflation.
With the rate of change for inflation rising and the relevant fundamentals deteriorating and 2020 being an election year for Trump, this inflation or "reflation" trend that began in Q4 of 2018 looks to pick up speed in 2020. The Fed wants a cheaper dollar to satisfy the Repo market and Trump wants a cheaper dollar to "stimulate" the economy enough to get reelected. With these strong fundamental drivers and technical confirmations, look for the DXY to continue to build a downward trend as it heads to 93 and lower. Those that think central banks can do QE forever without creating inflation and devaluing the currency are wrong.
Commodities have shown signs of life at times over the last few months - platinum, silver, copper, some agriculture.
I just want to reiterate - with the fundamentals worsening and the rate of change for inflation increasing - in addition to a break out on the TIP chart, highly bullish breakouts in Gold, breakout in Feds balance sheet, and breakout in government spending- there's a good chance we can get big surges in inflation assets in 2020 and 2021.
Things to watch out for:
- Pay close attention to interest rates and the Fed. The better we can understand the Fed's intentions the better we can trade and invest accordingly.
- The Fed has said they will not raise rates until they see significant and sustained inflation. Keep an eye on how fast inflation rises. If inflation surges and the Fed doesn't hike and potentially cuts, gold and commodities will fly.
- The "market" needs debt expansion to keep itself sustained. Keeping rates flat and doing a certain amount of QE per month will eventually be insufficient to keep stocks and bonds propped up and rates suppressed. Over the next 6-12 months keep an eye on the Fed's operations, any changes or growth, and any liquidity crunches. The Fed may front-run any liquidity crunch by announcing an official QE program. This is bullish Gold. Watch what they do. If they are slow to act or become hawkish, they could deflate the bubble.
- Watch the price action and trend shifts on the DXY.
Inflation?TIPS vs. GOVT breaking through a diagonal downtrend line (beginning in April '18). When it comes to Ratio charts, horizontal S/R zones are far more important IMO, but nonetheless this is an interesting development
Gold compare Tip Hello Traders
On the chart, one very important thing that happened on Friday is the volume on the Tip index.
This volume got on 3 June and see the price of gold is in line with the inflation index. This confirms my previous analysis of gold that we are in an upward wave to the price of $ 1,600 per ounce.
and silver we go up to 21 $ per ounce. the market in the process of pricing large inflation.
good luck.
Reflation ratio maybe bottoming If close month as hammer after false break it's a go $IEF, $TNX, $ZN_F
TIP monthly - on watch, trend may be turningRSI above 50, MACD positive and price is staging a breakout I guess. Rising inflation is good for precious metals and commodities.
iShares TIPS Bond ETF: Possible Top. Sell opportunity.TIP has potentially priced a top on the 2019 aggressive rally that started last with last November's bottom. 4H is already pulling back STOCHRSI = 8.271, STOCH = 41.432). The Golden cross took place in March and the MA50 has been acting as a Support since then. Based on the last two occurrences, the price should now consolidate around the 1D MA50 before making a more aggressive sell move into the new bear market. Our first TP is 113.30.
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Treasury Inflation-Backed Securities Sending a Signal #Gold $TIPIn "Emerging Markets Lead U.S. Inflation," it was pointed out that emerging market equities (EEM) act as a leading indicator to U.S. inflation by an average of 6.5 months. In 2018, emerging markets peaked in January, and U.S. inflation saw its multi-year high roll over.
In higher inflation environments, capital inflows to emerging markets primarily due to the fact many are commodity producers. When looking at capital flows into EM-nations and real treasury term premia, inflows are partly responsible for driving up interest rates.
Money flows into emerging markets continues to has a strong relationship with Chinese monetary policy.
Treasury Inflation-Protected Securities (TIPS) may be sending the signal that last year's deflationary push in asset prices and commodities aren't over. These bonds are indexed to inflation and backed by the U.S. government as the bond's par value adjusts with the inflation rate.
TIPS generally move with the trajectory with consumer prices (CPI), but instruments like iShares TIPS Bond (TIP) ETF gives a real-time, market-based look at inflation expectations; and it's not stellar.
TIP price action has traded sideways since the 2012 all-time high that coincided with the sharp rebound in real yields (nominal interest rate minus inflation). The quick breakdown in 2018 was largely due to the rapid rise in real yields, which is something I predicted going back to December 2017.
The inverse correlation with 5-year real yield and TIP is quite apparent and directly affects gold prices. If TIP remains under 110, price action will be consolidating underneath a decade-long former support - now resistance - that will likely play out unless the Federal Reserve reverses their monetary tightening, which is disinflationary by nature.
5-Year Real Yields & TIP
The further breakdown and selling of inflation-protected securities will probabilistically become unavoidable unless the trajectory of both growth and inflation accelerate and inflation, currently 190 bps in the U.S., outpace consumer prices.
If I were to apply the TACVOL process to 5-year real yields, the risk would be to the upside 122 bps/79 bps. This is not to suggest real yields could not fall, but that would be up to how the macro drivers filter throughout the data. In that case, TACVOL would be updated immediately.
What it is suggesting is that real yields are approaching the intermediate range bottom, and the combination of tighter financial conditions/monetary policy and falling consumer prices are not done running its course.
Unless, TIP can gain momentum from current levels, we could see a repeat of 2015.
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A Quick Bullish Trade on TIPSNo biggie in terms of return but super safe instrument with a very high probability of an uptrend at some point in the future. Inflation is picking back up and TIPS will have to climb back up. Also a nice yield for the buy-and-hold investors.
Long On TIPSAn instrument often disregarded because of it's lack of volatility , but, a great way to diversify and secure a portfolio, especially if not fully invested. TIPS (iShares Inflation-Protected Securities) is getting battered due to a high-dollar and positive sentiment over the economy, but, it remains a safe-haven for money and a hedge against inflation . Current price levels are below the 1-year, 3-year and 5-year moving average and right at a support level ; this is a very low risk trade with a steady pay-out and upward potential.
TIP getting hammered : short Gold & GDXInflation protected treasuries used to be well correlating to Gold and GDX... Till last December. We now see another drop in TIP with the reasonable probability that this time GDX and Gold move back again to correlate. GDX Target of 19 is reasonable and Gold could drop to sub 1200 Region.
