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 THE END OF LOWER FOR LONGER?

• The UST 10-year yield is rising above the upper-line of the 30-year channel - further progress
could have broad implications for the global financial and commodity markets.  
• Combined with the downturn in the U.S. dollar’s 15-year cycle, accelerating global reflationary
forces and the massive liquidity created by many years of central bank money-printing could
trigger one of the most dangerous and opportunistic climate for investors in several decades.

@RealVision @WhatILearnedTW
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 US 10 YEAR YIELDS
– ACTUAL VS. EXPECTED

• How distorted are long term US yields? MI2 Partners model, which worked consistently from
the early 90’s until 2014, suggests “fair value” for US 10 year yields is over 3.75%. What has
caused this mispricing?
• Firstly, ongoing ECB and BoJ QE combined with Negative Interest Rate Policy (NIRP) has driven
a feeding frenzy of capital outflow looking for yield. The US was a natural recipient.
• Secondly, accelerative dollar weakness has finally reversed the collapse in global reserve
accumulation we saw from 2014-2016. In 2017, the IMF estimates that global reserve growth
was approximately $500bln and a lot of that ended up in US Treasuries!

@RealVision @mi2partners
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 BIG DEFICITS – LOW TERM PREMIUM…WHAT GIVES?

• The term premium for 10-year Treasuries is at its lowest level since the early 1960s.
• Higher budget deficits have historically been associated with term-premium widening.
• Looking at Trump’s tax plan and additional spending measures likely in the coming years, the
sharp reversal of the budgetary consolidation since 2010 should revert the term premium to
more normal levels and push yields higher on a sustained basis.

@RealVision @jsmian
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 SPEAKING OF FISCAL, HOW DID THOSE TRUMP TAX
PLANS GO?

• Oh yeah, the republicans figured out in conference that corporations cannot vote in the
midterm elections….

@RealVision @sommacro
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 BUT THE TAX CHANGE CASH COULD BRING HOME
THE BACON….

• Corporations holding huge amounts of cash overseas will get a tax break so they can “repa-
triate” the money and bring it to the U.S. Companies from Apple (which has over $250 billion
overseas) to Oracle ($48 billion stashed internationally) could bring enormous amounts of
capital back into the U.S.
• This chart shows a list of U.S. companies and the amount of capital they hold outside of the
country. Could this drive up the dollar?

@RealVision @KatusaResearch
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 WOULD CASH REPATRIATION BE ENOUGH TO PREVENT
A MAJOR DOLLAR BREAK DOWN?
Long cycle and short cycle DXY chart

• The long term trend suggests a new cycle of decline is beginning for the USD regardless.

@RealVision @NautilusCap
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 EVEN THE BELEAGUERED BRITISH POUND IS ON
THE MOVE AGAINST THE DOLLAR…
USD/GBP 5 Year Chart

• Dollar weakness has pushed cable toward the 50% retracement of its fall from £1.72 to the
post Brexit low of £1.20.
• That retracement level of £1.45 matches resistance in the 2016 consolidation.
• Cable is trading toward the high of the recent move after a positive fourth quarter GDP
number. Two possible hikes from the BOE this year are likely, despite the post Brexit trend
of slower growth.

@RealVision @TgMacro
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 THE DOW CONTINUES SHOOTING FOR
THE MOON!

• The log chart of the Dow Jones Index since inception (with regression lines) shows that,
by this measure, we are already firmly in bubble territory!
• But the rally may well hit 2 standard deviations overbought and that would see the Dow hit
31,250 before it finally reverses. It would also complete a 5-wave advance from inception
(using Elliot Wave).

@RealVision @RaoulGMI
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STOCK VALUATIONS ARE OFF SCALE WHEN COMPARED
TO CORPORATE PROFITABILITY
The cyclical PE ratio as a multiple of corporate profit margins

• Most astute investors know that stock valuations are at or near historical highs.
• Even these investors, however, may be unaware that today’s valuations, when adjusted for the
secular trend of economic growth and the cyclical nature of profit margins, defy comparison with
any prior period since the Great Depression.

@RealVision @michaellebowitz
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 IF YOU THOUGHT FANGS WERE EXPENSIVE…MEET
THE MCBM’S OF THE ’OLD’ ECONOMY!

• This is now the biggest stock market bubble of all time, driven by an epic reach for yield on
the part of both investors and corporate management.
• Investors, desperate to escape zero or negative yields around the world, have piled into the
equity market to capture dividend income and capital gains.
• Managers, desperate to generate return in an environment where they have been pulled
forward like never before, have resorted to financial engineering via buybacks.
• While the FANG stocks are the face of today’s market, no other foursome epitomizes this epic
reach for yield like McDonald’s, Caterpillar, Boeing and 3M. As a group, their valuations are
twice as high as they have ever been in the past even as their fundamentals deteriorate like
never before.

@RealVision @jessefelder
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 STILL, NO TIME LIKE THE PRESENT
TO GO ALL IN…
Assets in leveraged long ETFs vs assets in leveraged short ETFs

• …and add some more turns of leverage.

@RealVision @sentimentrader
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 BITCOIN IS FOLLOWING THE CLASSIC
BUBBLE PATTERN…HOW LOW CAN YOU GO?

• Bitcoin is currently hovering in ‘return to normal’ – what’s the new normal?

• If Bitcoin follows the classic bubble cycle then investors have yet to experience the great fear
and capitulation stages which end in despair. Time will tell!

@RealVision @ttmygh
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 THINK BITCOIN IS THE ULTIMATE BUBBLE? CHECK
OUT THE ONE YEAR RETURN ON RIPPLE!
Ripple (solid) vs Bitcoin (pink)’ one year price chart

• Centralized cryptocurrency Ripple (XRP) has seen interstellar returns this past year.
• A comparison with the Bitcoin price wave shows that Bitcoin has hardly made, well, a ripple…!

@RealVision
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 BACK DOWN ON EARTH – GREEN SHOOTS ARE
SHOWING IN COMMODITITES

• Close out a month during 2018 at or above $9.88 and soybeans go to bull trend based on
annual momentum. 
• Same momentum situation is pending for corn and wheat.  If grains turn up, then “food price
inflation!” will be headline in 2018. 
• Expect 30-40% surge from grains as first up leg response, if breakout numbers achieved.

@RealVision @olivermsa
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 CRUDE OIL IS BREAKING OUT!
WTI oil price chart

• After a multi-year downtrend, momentum shifted to the upside late last year.
• Waverly expect strengthening crude oil prices will be one of the key themes of 1H 2018, and
look for the uptrend to continue.

@RealVision @AdamHGrimes
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 OIL STOCKS LIKE CONOCOPHILLIPS ARE TRENDING
HIGHER IN TANDEM
COP price chart

• COP been steadily improving earnings; Q2 and Q3 last year had positive EBIT, likely to
continue into Q4 as oil prices have increased.
• COP’s breakeven price is between $40-$50 a barrel.
• If we conservatively project stabilization of their profitability with some breakeven years and
some marginally profitable years the value of their stock jumps to over $100, possibly as high
as $150.
• Modelling for slight profitability and a tax rate of 21%, the valuation of COP indicates significant
potential upside.
@RealVision @aspentrading10
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 GOLD IS THE CLASSIC COMMODITY LEADER
– WILL IT BREAKOUT FROM THIS PATTERN?

• The long-term charts indicate that Gold prices have been correcting from the 2001 to 2011
bull move.
• This correction on the log graph is taking the form of a 54-month inverted H&S bottoming
pattern. H&S bottoms have the tendency for symmetrical construction. The period from the
beginning of the left shoulder in June 2013 to the bottom of the head in December 2015 was
30 months in length.
• A decisive close above $1,400 would complete this H&S configuration and establish upside
targets of $1,792 and $2,637. To remain symmetrical the H&S bottom should breakout before
June 2018.
• A decline below $1,120 would negate this analysis and indicate that the Gold prices have not
yet bottomed.
@RealVision @PeterLBrandt
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 US MONETARY COVERAGE RATIO:
GOLD IS CHEAP!
.

• Over the past decades, the gold-backing of the US Monetary Base is trending down.
• The monetary base (M0), has seen its gold-backing dwindle to levels below 10%.
• One could also conclude that gold became significantly cheaper because of this unrestrained
monetary inflation – have we hit the bottom?

@RealVision @RonStoeferle
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 THE ULTIMATE GOLD CHART?

• This time frame captures the multi-decade secular bull market that began when Nixon
abandoned the Gold-Standard and ‘floated’ the USD.
• Wave 5 is coming, according to WeldonLIVE! Gold at $2,700 within 5 years? A price above
$1,377 would open the door for a serious run at the 2011 high of $1,900…

@RealVision @WeldonLIVE
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