Jim Chalmers spins household income fairy tales
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Last year, Treasurer Jim Chalmers presided over the biggest decline in real
per capita household disposable income in the world, with Australian
househol...
2022-11-10
Bond Ratio and Targets
The ratio of HYG and TLT looks to be finally reversing. There is a gap on HYG near $75. A trip back to the 2007 ratio high map to TLT at $101. A trip back to the next resistance line gives a $105 target. If HYG goes higher, there are yet higher targets possible. A 50 percent retrace of the TLT drop since June gives a possible target of $105. Given this context, I see a fairly high probability of TLT moving above $100 as long as the general move in bonds is higher. What interests me about bonds is that, as I had expected this summer, eventually inflation and the broader economy weaken enough for an extended bond rally. That could produce targets upwards of $120, with a backtest of TLT's former long-term support possible up around $130 in the event of a disinflationary or better (for TLT), deflationary recession.
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