"As a technician, I feel that there are few analysts that offer value for me, but you do. Your work on Gold ratios has helped my analysis greatly." --Jordan Roy-Byrne, CMT (The Daily Gold) 4.9.10

Thursday, January 19, 2012

10 Year

I am the US Treasury bond.  I have broken out to the upside and yet the stock market does not care.  Should I be concerned I am on a false breakout or should the broad market bulls be concerned about me?  Seriously.

Maybe the rules are changing to 'if it's made (or printed) in the USA, buy it!'



  1. at some point in time Gary you must consider the benefit of doubt towards the stock market. I realize the macro secular bearish viewpoint is correct yet from a cyclical standpoint equities have proven more than resilient. Weak mining stocks were supposed to portend a weak equity market; well that has failed. A strong debt market should have done the same and that appears to be wrong; at least for now

  2. PK, why is the macro secular bearish viewpoint correct? How do you know it is correct? I am by no means bearish and really at this time, nor am I bullish. At least not yet actionably so. But I do not think the big picture is necessarily bearish because I do not think the big picture is deflationary. That was so 2011.

  3. Whether the big picture is deflationary or inflationary it makes not one iota of difference with regards to the secular trend of stocks. In the 30's it was deflation and in the 70's it was inflation, yet both periods witnessed a diminishing rate of return for stock investors. It is my belief, right or wrong, that we are in the same type of environment and yes in absolute terms the DOW could go to 30000 with an inflationary environment. If that is the case then gold will go to 10,000.00 unless of course you believe that we are now in a period where investors will do good by buying and holding a la 80s and 90s, which i dont think you do. And yes, there is no certainty that i am correct with regards to my secular outlook but at least my work is telling me that until proven otherwise, this is the type of environment we are in now.

  4. I agree with the essence of everything you just wrote PK.