The Dow Dilemma
Updated
We are at a crossroads. As if we have nothing to invest in.
Gold is, in absolute terms, highly overpriced.
Gold is more than 50% above the 24 year average.
And highly diverging...
It still is the massive elephant in the room.
Yield rates are the small rat in the room.
Due to fast rate hikes, the bond market has suffered incalculable losses.
Gold (elephant), just like many people, are afraid of rats (and yield rates).
Current consensus is that yield rates are to grow forever, pushing dollar in all-time highs.
But consensus cannot take us far...
Dollar is showing signs of weakness.
The rate hike party may not last long...
And equities are still problematic.
With massive amounts of money printed in the last 3 years, surely the problems are yet to come.
In the main title I talked about a dilemma.
DJI divided by Money Supply is warning us.
But who is listening? Everyone seems to have disappeared.
I am walking around with a lantern in my hand, looking for people, just like Diogenes the Cynic did.
This is the micro view. Let's see at the macro view.
DJI is joking to us. Short-term it shows clear weakness signals.
Long-term it shows the most bullish of signals.
My opinion? I expect short-term problems in the equity market.
But the problems that may come could be smaller than anyone expects.
A relentless equity bubble may form, trapping investors who brace for a downwards impact.
In the end, things are not as simple as we may think...
And all we are left with is a dilemma.
Tread lightly, for this is hallowed ground.
-Father Grigori
Gold is, in absolute terms, highly overpriced.
Gold is more than 50% above the 24 year average.
And highly diverging...
It still is the massive elephant in the room.
Yield rates are the small rat in the room.
Due to fast rate hikes, the bond market has suffered incalculable losses.
Gold (elephant), just like many people, are afraid of rats (and yield rates).
Current consensus is that yield rates are to grow forever, pushing dollar in all-time highs.
But consensus cannot take us far...
Dollar is showing signs of weakness.
The rate hike party may not last long...
And equities are still problematic.
With massive amounts of money printed in the last 3 years, surely the problems are yet to come.
In the main title I talked about a dilemma.
DJI divided by Money Supply is warning us.
But who is listening? Everyone seems to have disappeared.
I am walking around with a lantern in my hand, looking for people, just like Diogenes the Cynic did.
This is the micro view. Let's see at the macro view.
DJI is joking to us. Short-term it shows clear weakness signals.
Long-term it shows the most bullish of signals.
My opinion? I expect short-term problems in the equity market.
But the problems that may come could be smaller than anyone expects.
A relentless equity bubble may form, trapping investors who brace for a downwards impact.
In the end, things are not as simple as we may think...
And all we are left with is a dilemma.
Tread lightly, for this is hallowed ground.
-Father Grigori
Note
To anyone wondering...SPX is printing the exact same signal.
Note
SPX: The fastest of the bunch.NYA: The most overlooked index.
If that is the .com bubble, what have we put ourselves into?
Note
DJI against NYADJA (the parent of DJI) against NYA
Note
Equities may be giving mixed signals.Commodity cost (PPIACO) is not.
Price analysis simple as 1-2-3.
Note
DJI analysis is like a drawing of an toddler.Simple as A-B-C.
Note
Drawing like a child is fun!Note
You have been warned.
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