Oversold, Again: SP500, Gold, Bonds

Takeaway: Yellen will allow #InflationAccelerating to continue towards the “committee’s objective", which will, in turn, slow real GDP growth faster.

Both the SP500 and Gold are signaling immediate-term TRADE oversold within bullish intermediate-term TRENDs into the close today. This should come as no surprise as the 30-day inverse correlation between USD (which is signaling overbought) and SPX/Gold is -0.9.

 

Most of this comes on the heels of another reaction to the Fed’s confused forecast:

 

“I do want to emphasize that this is a forecast”

-Janet Yellen

 

Indeed. And her forecasts on growth and inflation are wrong at least 2/3rds of the time.

 

She’s also saying she’s going to let #InflationAccelerating continue towards the “committee’s objective.” Which will, in turn, slow real GDP growth faster. Then she’ll get bearish on the economy after that.

 

Hedgeye Playbook says:

 

  1. Short USD (UUP) on the overbought signal
  2. Buy Gold (GLD) on the oversold signal
  3. Buy Bonds (TLT) on the oversold signal

 

KM

 

Keith R. McCullough
Chief Executive Officer

 

Oversold, Again: SP500, Gold, Bonds - DXY

 

Oversold, Again: SP500, Gold, Bonds - GOLD

 

Oversold, Again: SP500, Gold, Bonds - UST 10Y

 

Oversold, Again: SP500, Gold, Bonds - SPX


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