Mixed trend signals between equity indices and bonds

The trend environment has changed over the last month. Bonds continue a strong up trend around the globe although equity indices have moved off lows and have started to trip buy trend signals. This pattern of buy signals for both stocks and bonds is not what is usually expected. 

Rates markets are now suggesting that central banks may not be as tight with funds. Eurodollar futures are starting to move higher based on greater disagreement on Fed action. Currencies are still showing weakness although the global macro story of strong US growth, Fed tightening, and flight to quality seems to have weakened. Gold is moving higher although the precious complex is not moving in tandem. The weakness in base metals has also fallen and now shows more mixed signals. Energy prices are still trending lower although there is greater uncertainty on further trend continuation. Natural gas prices have moved higher. Grain markets are moving higher albeit these commodity market prices are generally still flat. Broader commodities show more mixed signals.

Liquidity starts to decline quickly as we move closer to the holiday season and after the Fed meeting. The general pattern is that markets become more range-bound for the last two weeks of the year.