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Bonds and gold historically have a positive correlation; they tend to move together. But that’s been breaking up as of late, and that’s what happened today. Whether they’re breaking up for good is a different story.
Treasuries saw their biggest rally since August, but gold had its biggest drop since the beginning of the month. The U.S. dollar index (DXY) had its worst day since early November, too.
But I’m looking around the corner, at pre-move pulses that signal the next big move…
Right now, it looks like that move will be coming out of China. (Interestingly, I’m not alone in thinking this; Don Kaufman sent an alert out for a long option trade on EEM last week, and Chinese stocks account for 25% of that fund’s weight. A rally in EEM typically occurs as the greenback weakens.)
So, a potentially massive move in Chinese companies could be in the offing. Let’s talk about why – and what we can do about it…
