Big Picture - A comprehensive view of asset class preference
Jan 26, 2017 - interesting long term ascending triangle; decade of quant easing, break of RS downtrend to SP500, fundamental OECD CLI globally moving higher, oil outlook improving, seems appropriate set-up for late cycle rally. More on this with Bond:equity ration charts.
1011 a Global Bond to TSX (cur adj)
Jan 26, 2017, 3 prior cases in 20 yrs with declining ratio from current level. (Sept 1999, 8 mo, +35%, June 2005 - 30 mo, +38%, May 2009, 20 mo, +33%).....volatility will increase, and set traps where the last one doesn't come back....sometime in next 6 mo to few years TSX should be about 30% higher and that is a sell! Anything can happen, consider reducing equity on sig appreciation, use equity trend lines and breaks mean start selling....not all on first break, remember, there will likely be increasing volatility.
1011 Global bond to TSX300 - Monthly)
1012 Canadian bond to TSX 300 - Monthly
Canadian bond to TSX 300 equity ratio, Monthly - a long term reversion to mean indicator that cycles between extremes of Fear and Greed.
Feb. 3, 2014, With the TSX beginning to turn lower, it is unsure whether there was a false breakout of the triangle pattern above, and the TSX will turn lower to join the emerging markets, or if the EEM will bounce off the lower trend line and begin to rise. Time will tell. In April 2011, TSX equity to Canadian bonds were very close to a sell....not so much now, so it looks like better long term odds to hold TSX equity for now.
Jan. 30, 2014 - TSX has broken out of a consolidation wedge, seemingly to the upside. However only a close above 14136 will note a higher low (HL) and then higher high. (HH) It is worth noting that the normally well correlated BRIC and TSX has strongly diverged in their current consolidation triangles.....TSX up and BRIC bounced back down from the upper trend Chanel and remains in the consolidation triangle. See chart below # 1013
Dec.12, 2013- TSX 300 turning lower, however from upper panel TSX300 is not expensive relative to bonds.
1013 Global bond to MSCI emerging matkets- monthly
1014 Global bond to NYSE-Monthly
Jan 1, 2017 - US mkts closer to expensive than cheap, added 'stop loss' trend lines. Violation of these, strong indicator to reduce equity position given relative high price placed on equity.
1020 Euro Index/Japanese Yen - Indicator of global liquidity
Euro:Yen ratio is considered an indicator of global liquidity.
Liquidity (as measured here) continues to come out of the system. Peaks are places to exit equities, troughs are places to buy, we are neither, and trending lower, caution advised.
1021 opper versus Global bond ratio - growth versus fear
1022 Copper versus gold - growth versus inflation expectation
Copper versus Gold, an indicator of growth versus inflation outlook
1023 CAD financials versus energy - Monthly - Disinflation versus inflation expectations
Canadian Financials versus Canadian energy, an indicator of disinflation versus inflation.
May 8, 2016, If one remains invested in TSX equities, energy should be strongly favored over banks from a reversion to mean persepctive over the next few years. Somewhere ahead, when inflation regains its footing, energy should double relative to banks from here.