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The fear trade has come to life the last few weeks and the above chart from Technician Cory suggests fear may well be here to stay for the next several weeks.

Here he shows the US long bond index “TLT” as a ratio over the Canadian dollar Index “FXC”.   When the TLT moves up more than the FXC we see the deflation fear trade has the upper hand over growth or inflation prospects.  The TLT ratio came up to resistance in August last summer and then rolled over on the euphoric hopes that QE2 would revive growth.  Lately as this hope has been dashed, the TLT/FXC ratio has broken out just as it did in the fall of 2008.  Harbinger of things to come?

Mark Leibovit of VRTrader: Mark Leibovit is on a Stock Sell Signal. “The S&P 500 plummeted from 1230 (precisely my forecast rally point) to 1170 late Friday.”  If we’ve truly entered a bear market, then as I’ve told you, we could ultimately see a move back to the 800s”

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