I am going to stick with the view that the market can top out here for a resumed correction. I know I know, the Markit Flash PMI improved implying a bounce in manufacturing now that the cold weather will be (hopefully) leaving us. But then Philly Fed came in lousy. Okay, a wash.
Still for the sake of my mental health if nothing else, I allow for a final top in the market out to mid year or so and I’ll get rid of the puts (still slightly profitable) if resistance parameters break. I don’t fetishize the bear case.
The point though is not bullishness or bearishness on the stock market. The main point is that indications are coming in left and right that any bullishness going forward would be attended by more traditional signals of inflation’s effects. And that assumes there is bullishness going forward.
Here is the S&P 500 vs. the CCI commodity index.
And GLD vs. SPY.
Who’d have thought that gold bugs would one day be managing a massive decline in gold vs. the stock market and hoping that bullish divergence from over sold conditions would manifest in a new positive phase for gold vs. the stock market; or commodities vs. the stock market for that matter.
But these charts seem to be forecasting that is very possible. Goldilocks, you had a good run. Now beat it.
