It should not be lost on anyone that this is the same analysis I presented in the Gold Cycle, but on the other side of the equation. The trend for equities is up, so we should expect a continuation. But as with Gold, there’s a lot of evidence that suggests that the long term trend might be changing. More importantly, we should see the potential for long term Gold and equity market trend changes as symbiotic. Equity market weakness and Gold relative strength are inextricably linked. Continue reading
The Bond market has hit both the price and time targets I outlined here 2 weeks ago (see trend-line). And if we look at the technical for some clues, we see a negative divergence has formed. Based on the timing and out-performance of the Cycle to date, I expect bonds have possibly now topped for this Cycle, therefore an immediate decline into the next DCL should begin overnight. Continue reading
Gold benefited this week from the surprise announcement that the Swiss franc would no longer be pegged to the Euro. This unexpected move created immediate demand for Gold, with traders looking to precious metal as a safe haven. The decoupling highlights the very real possibility that next week, the ECB will announce a significant and full-scale quantitative easing program. Although clearly positive for the Dollar, the possibility of Eurozone QE is also bullish for Gold.
The end-of-week moves were exciting, but we need to avoid getting wound up emotionally by a couple of good trading sessions. The spike higher, though obviously constructive, is well within expectations for the upward thrust of a 2nd Daily Cycle. To date, the rise has not been statistically different from those seen during other Investor Cycles, including those in the bear market of the past 3 years. Continue reading
In my opinion, it’s only going to be a matter of time before the current world-wide deflationary pull and economic weakness begins to directly impact the US economy. Considering the FED has tapered all QE programs, in an interconnected and dependent world, the US economy has not healed enough to withstand this weakness, let alone continue to “carry the world” on its back. Continue reading
This is why I’m declaring that Gold is at its “judgment day” – the point where the natural reflex rally out of the last ICL is over, as is any short covering. Gold now must fend for itself by attracting new, organic buyers to push it higher. For the bull case is to play out, the current 2nd Daily Cycle needs to gain momentum and deliver a clean break of the resistance line, followed by a sustained run higher. If Gold’s bear market is over, this is exactly what I expect to happen. Continue reading
This is fast becoming yet another Right Translated Daily Cycle, highlighting the recent “rush to safety” tone which the markets have adopted. This is a sign of the increasing market distress and concern that is beginning to creep into investor’s focus. The risks appear to come from the European periphery and the ECB’s perceived lack of a mandate to correct the deflationary spiral that is beginning to gain momentum. Continue reading
1-2 Equities DailyI know there is a natural tendency to dismiss this market as simply a speculative bubble that is approaching a grand top. Of course, I too don’t doubt this market is on that path. But if we’ve learned anything from these past 2 years, we know that markets can and do remain irrational for extremely long periods of time. Just like the extended and extreme move lower we’re witnessing within the Crude Oil market, all speculative extremes take on the same characteristics. Continue reading
Fortunately for gold followers, this holiday period does not align well with an expected Investor Cycle Low, as it did the last couple of times it fell sharply into the New Year. The combination of an ICL with light holiday trading, occurring within the “heart of a bear market”, in past years resulted in some speculator declines.
This time around, we’re only scheduled for a Daily Cycle Low, and just a milder, 1st DCL at that. In addition, gold is already 9 days into a cycle decline and likely close to that Cycle Low turn. I did mention this past weekend that members should not be surprised if gold fell to start the week, and that’s exactly what we’ve seen so far. A few more sessions lower is certainly possible, but I’m now on the lookout for a turn higher at this point. As bearish as the recent action appears, this is actually “very average” in terms of 1st Daily Cycle’s, although maybe a few days past due. Continue reading
What a crazy equity market this has become. The swings are just insane. I know in this business what’s “normal” is often tough to define, with the markets fully capable of a variety of wild but still-acceptable swings. Still, I have no qualms in calling the current market “irrational”. It’s a condition often found near major market lows and highs.
It was just two weeks ago that we witnessed the largest weekly selloff in over two years. That 5% decline occurred in a single week and sent the S&P tumbling below 2,000. What followed was a pair of 2% daily gains, packaged in a 3 day rally that added an amazing 100 points. This level of volatility and price fluctuation is indicative of a market controlled by speculative forces. Equities have been divorced from fundamentals for at least 3 years, leaving the market at the mercy of speculative actors: under-performing funds, speculative traders, hedge funds, and programmed bots designed to perpetuate the trend for as long as possible. Continue reading
The size and strength of this Daily Cycle indicates to me that the bull market trend is alive and powerful, with much more room to move higher. However, all good moves are a process, and this one is in need desperate need of some back-filling first. It’s also far too overbought and more importantly, easily due for a DCL. We’re at the point now where we could see bonds fall through to the end of the month. Then next Cycle should make new highs though, sometime near the end of Jan. Continue reading