The Lead-Lag Report: Resistance Everywhere
As markets wait for the outcome of US presidential elections and the coming Greece austerity vote, internals hit all kinds of resistance and support levels. Clarity to come, or further confusion? We'll find out soon enough.
Treasury Inflation Protected Securities (IPE) – Volatile
Comments: The IPE/TENZ price ratio is one way of seeing if inflation expectations are rising or falling within the bond market. When the ratio is trending higher, it means bets are occurring on rising prices ahead. Volatility has caused the ratio to be all over the place. It remains to be seen where an actual trend forms.
Utilities (XLU) – Overreaction?
Comments: Utilities severely weakened Monday, breaking the 20 day moving average sharply. Concerns over the looming fiscal cliff and taxes on dividend stocks might explain the weakness as bets on Obama winning increase. More time is needed to confirm if this is just a blip, or the start of a weakening trend.
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