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Stock Market Still Following Path of 4 Years Ago

weekly Chart In Focus

Investors have been cheering the election of Donald Trump as the 45th U.S. president, thinking that he is going to bring a beneficial change for business, the economy, and investments.  But thus far, what he has brought since the election is just a carbon copy of what happened exactly 4 years before. 

I addressed this pattern correlation here a few weeks ago, as foreshadowing of what we should all expect depending on the election’s outcome.  The key point to this chart is just how similar... Read More

Debt or DJIA: Who Gets to 20* First?

weekly Chart In Focus

I got to wondering about all of the NYSE traders on CNBC sporting their “Dow 20,000” hats.  Hitting that level seems elusive, but they keep them at the ready.

Interestingly, if they would do just a tiny bit of embroidery modification, they could be assured of making those hats useful.  Instead of “Dow 20K”, how about “Debt 20T”?  It may be just a fun numerical coincidence that the DJIA is approaching 20,000 while the total federal debt is approaching $20 trillion, but there it is anyway. 

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Copper Leads The Way Lower for Bond Yields

weekly Chart In Focus

Just a week ago, China was facing a banking system crisis that necessitated an injection of 375 billion yuan ($53 billion) into the money market, and that was after the prior week’s injection of 250 billion yuan ($36 billion).  But now, after Christmas has passed, the crisis seems to be abating.  That is good news for bond prices worldwide, including in the U.S. 

And the resolution was foretold by copper prices, which is the really cool part of this. 

This week’s chart compares spot... Read More

SPY Assets Zooming Higher

weekly Chart In Focus

During the post-election stock market rally, there has been a huge push into ETFs, and especially into SPY.  It is the largest of the ETFs tied to the SP500 Index.  It is normal to see fluctuations over time, with total shares outstanding rising and falling as prices do the same.

This is a normal function of investor sentiment.  Rising prices get people more bullish, and so they pile into the market.  Falling prices scare people away, and they sell.  The sponsoring firm of SPY, State... Read More

Lumber’s Message For Interest Rates

weekly Chart In Focus

The FOMC is now finally allowing interest rates to start moving where the market has already said they should have gone.  The 2-year T-Note Yield is already up to 1.27%, and the Fed is lagging behind in making an adjustment.  I have shown before that this can be a problem, having the Fed lag behind the message from the 2-year T-Note yield. 

The important message that the Fed apparently does not have any awareness of is that there are many more rate hikes in store.  This week’s chart shows... Read More

Bonds and Gold in Unusual Correlation

weekly Chart In Focus

Gold prices have shown an unusually strong correlation to bond prices this year.  This is not normal, and the two are not usually marching in lockstep like this. 

The strong correlation began around May 2016.  It may just be a coincidence that May 2016 was when Saudi Arabia started selling off the holdings of T-Bonds from its sovereign wealth fund, an effort to fund their governmental expenditures in an era of low profits on oil sales.  See http://ticdata.treasury.gov/Publish/mfh.txt

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