Inflation Expectations: TIP/TLT ratio

In 2013 inflation expectations were back on the rise after falling sharply in 2011 from the post-2009 reflation.  Most people expected the Fed would be able to meet its inflation targets due to steady economic growth. There was even talk of rate rises without a deflationary impact.

However, a calm look at the charts showed that this was just a wave B consolidation in the "inflation" bear market that has been in effect since 2011. See my previous post from Sept 2013 here: http://elliottwavecounts.blogspot.co.uk/2013/09/inflation-expectations-and-tiptlt-ratio.html

Not surprisingly, the bear market in "inflation" has re-asserted itself and Precious Metals and Miners have sold off. Any nascent expectations of inflation or of rate rises have now evaporated. 

The wave-count below suggests that this trend still has some way to go, and could easily continue into the late 2015 ECM turn date. 

USD view of Emerging Markets

EEM: MSCI Emerging Markets (USD) 

Despite the excitement of the last couple of weeks Emerging markets continue to remain a 4 yr-old contracting range (in USD terms). 

Same for the Weekly RSI.

FXI: China Large Caps (USD) 

China remains the bellwether market for EM and commodities. Key indicators like AUD, CAD, Copper, will take direction from Chinese demand. 

Continues in a pennant formation, which no clear view as to which way it will break.

INP: India (USD) ETF

Indian markets are at new highs in Rupee terms. In dollar terms the SENSEX has done nothing for 4 years. 

Now against long-standing resistance with an overbought RSI, the India USD ETF is at risk of an unpleasant correction.

RSX: Russia (USD) ETF

The wave count allows for further lows, but has done enough to be a completed decline. Weekly RSI is pretty oversold.

EWZ: Brazil (USD) ETF

The wave count here too allows for further lows, but when the Falling Wedge breaks this market can fly like a rocket. Weekly RSI showing positive divergence from oversold.

Commodities perking up

Encouraging signs for commodity bulls as the CCI held an important long-term support level at 500 (see longer term charts below).

 

The index is short-term overbought for now, but if the recent lows survive a re-test I expect a continued advance over the next few months.

 

 

 

Several Risk markets at technical support levels

S&P 500 at channel and trendline support since 

Eurozone ETF (USD) - since 2008 top

EMERGING MARKETS (USD) ETF

CHINA LARGE CAP (USD) ETF

USD JPY