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Lighthouse Weekly Chart Window - 2013-08-19

Lighthouse Weekly Chart Window - 2013-08-19

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Published by Alexander Gloy
We use proprietary technical indicators to determine the prevalent stock market trend. Moving averages, new highs/ new lows and risk-on/risk-off indicators play an important role.
We use proprietary technical indicators to determine the prevalent stock market trend. Moving averages, new highs/ new lows and risk-on/risk-off indicators play an important role.

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Categories:Types, Business/Law
Published by: Alexander Gloy on Aug 18, 2013
Copyright:Attribution Non-commercial

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12/18/2013

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Lighth
Weekly Chart Window - August 19, 
We
ouse Investment Management
 
, 2013
kly Chart Window
August 19, 2013
Page 1
 
 
Lighthouse Investment Management
 
Weekly Chart Window - August 19, 2013 Page 2
Contents
TIPS-derived Inflation Expectations .............................................................................................................. 3Stock Market and TIPS-Derived Inflation Expectations ................................................................................ 4Trend: Moving Averages ............................................................................................................................... 5Trend: MACD ................................................................................................................................................. 6Stocks Above 50-Day MAVG ......................................................................................................................... 7Stocks Above 200-Day MAVG ....................................................................................................................... 8Net New Highs: NASDAQ .............................................................................................................................. 9Net New Highs: NYSE .................................................................................................................................. 10New Highs/Lows Ratio: NASDAQ ................................................................................................................ 11New Highs/Lows Ratio: NYSE ...................................................................................................................... 12Risk-on / Risk-Off ........................................................................................................................................ 13Lighthouse Timing Index ............................................................................................................................. 14Chart Spotlight: Silver ................................................................................................................................. 15
 
 
Lighthouse Investment Management
 
Weekly Chart Window - August 19, 2013 Page 3
TIPS-derived Inflation Expectations
Observations:
 
Inflation expectations are calculated by subtracting real (TIPS) yields from nominal yields
 
Inflation expectations continue to rise
 
The Fed prefers elevated inflation expectations in order to motivate consumers to spend and todeflate the real value of debt. A slowing velocity of money counters the Fed's efforts.
 
Recent talk from Bernanke about possible 'tapering' of QE later in 2013 led to doubts regarding theFed's policy of N-GDP targeting, only adopted in late 2012.
 
CONCLUSION: Global central banks are the only buyers of Treasury bonds with 5yr+ maturity left inthe market. Despite the Fed absorbing more than 100% of net issuance of 10yr+ maturities, yieldscontinue to rise (from 1.65 to 2.85%). If the Fed concludes it has lost control over yields, there areonly two options: increase QE (instead of 'tapering') or announce a yield cap (Fed commits topurchase every T-bond until yield drop below a certain level).

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