Brilliant! Many thanks Orwell. That gold, and copper chart would...

Brilliant! Many thanks Orwell.

That gold, and copper chart would theoretically work with your Harmonic Butterfly thesis, so it all appears to marry up from an EW perspective.  

This also seems to coincide with my preferred scenario (believe it or not), as I think it would result in a far quicker and milder reset than if we were to push on up here on the back of falling yields.  See option 1 here: http://hotcopper.com.au/posts/18249253/single

If US markets continue to ignore the Fed's rate guidance and blow a real bond bubble (bigger than it already is) then the end result would be catastrophic when inflation comes back, or particularly in the event of an inflationary shock (eg oil supply cut via war in Middle east).  See 1986 and 1999, except these would appear extremely mild in comparison.

If on the other hand, the FED continues down the normalisation path, and markets re-price expectations accordingly (rates up for here) then I have no doubt risk markets will come off quite sharply as they re calibrate.


What sort of projection do you look for if that Harmoic Butterfly materialises?