Sometimes the indicators take their sweet time...

Months ago we were following the ratio of shorter term treasuries (IEI) to longer term (TLT) as it relates to the S&P 500.  The idea is that inflation expectations increase, bond buyers creep down the curve toward the short end.  As these fears back off, they creep up to the long end.

The market tends to benefit when inflation is expected and speculation is encouraged.  The Japan disaster put a wild card in the deck, as sentiment got all screwed up (too bearish) and a rally to new highs was ignited into May.  Then?  Well then the market resumed its course and did what it was supposed to do, ultimately.  And that is to follow inflation expectations.

What comes now?  Well, I do believe it is just about Prechter time.  Maybe followed by Bernanke time.

Markets are awesome now folks.  I enjoy this time so much more than drudgery that unfolds after the herds have become emboldened, with their handlers on a robotic auto-control.  Or something...

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