Testing the Delationary Trend Hypothesis
Short Term Stuff
A combination of the tail end of large growth trends in the US deficit, Corporate debt, and Personal debt, knife edge issues, appear to be have had an effect in pushing 30 year interest rates up since the first of this year along with a steepening of the yield curve . This is a knife edge issue, as it’s existence is the precursor to a economic and market decline and a panic to try to reduce debt.
Macro Deflationary Trends are Still in Play
While we still maintain that interest rates hit their peak for this cycle in the fourth quarter of 2018, the market is taking the FED action as a whole hearted signal to take on risk. This has pushed our Facture chart line back into the 0.040 to 0.060 swing point area.
And look to be ready to Accelerate again..
We would expect to see the Fracture Chart Line to move higher from here and touch the 0.260 are by mid year. See Chart here.