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The Lead-Lag Report: Forced Reflation

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SuperBen and the League of Extraordinary Bankers are forcing reflation upon us, and for risk assets, that's bullish.

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Treasury Inflation Protected Securities (TIP) – Whoa



Comments: The TIP/IEF 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. TIPS went utterly wild following the Fed's QE3 announcement, as inflation expectations surged. Holding this ratio level will be very important in the coming weeks ahead for risk assets.

LAGGARDS: BEAR TRADE CONTINUES TO BREAK DOWN

Health Care (XLV) – Re-sync?



Comments: Health care has re-synced to the bear trade, weakening in sympathy with utilities (XLU), and consumer staples (XLP) as the bear trade fades. Further weakness appears likely given that dividends seem to be getting more and more out of favor on inflationary fears.
No positions in stocks mentioned.

This writing is for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction, or as an offer to provide advisory or other services by Pension Partners, LLC in any jurisdiction in which such offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Pension Partners, LLC expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

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