Market Poised For Deflationary Flush

Every end of QE has seen increased volatility in some market, if not all markets. Interest rates fell in the prior three cases. U.S. stock prices fell in two of three, and barely rose in one. Commodities suffered greatly, although they were also in a bear market. We may find out soon if the past 18 months was an epic bear market rally or the start of a commodities bull market. Even if the latter, the could be an incredible pullback.

Below is copper/gold. Annother clear topping pattern is almost complete.

Here is the inverse, which gives a more granular view. I see a clean breakout at 450, but I'm ready to get aggressively bearish if it stays above 440. The fact that this ratio is climbing today amid a market rally tells me to sell the rip. The major indexes turned red on the day when gold/copper was above 441 and they have rallied back strongly to green as the ratio pulled back to 437 presently...

The Federal Reserve announces policy tomorrow. Back on September 10, a taper timeline was leaked: start in November and finish in July 2022.