Pull the trigger with confidence.

The Fed’s rate hiking at the short term end of the maturity spectrum is outpacing the rise in long term yields, which is resulting in an inverted yield curve.  The term “yield curve” refers to the yield on every maturity from 1-week to 40 years, which is difficult to portray in its entirety, especially as it changes over time.  This week’s chart looks at one snapshot out of the whole yield curve, the spread between the rates on 10-year and 1-year T-Notes.  It is now negative, meaning that the... Read More

This week’s chart is the one I have been watching very closely the past few days, and sharing in my Daily Edition.  It has multiple things all going on at the same time, and presents a great lesson on a couple of important chart analysis principles.

The first and more elementary point is that the SP500 just recently formed a classic head and shoulders (H&S) top structure.  A H&S is important not because it is a top (or if inverted, a bottom), but because it provides us with a measuring... Read More

I like sentiment indicators of all types, and I like the more obscure ones even better, the kind that almost nobody watches.  This week’s chart shows one such sentiment indicator for gold prices.

The Sprott Physical Gold Trust trades under the symbol PHYS, and it is a special type of investment vehicle that is different from an ETF like GLD.  It does own physical gold, and has very specific rules about redeeming shares for that gold.  Its shares generally trade at a slight discount to the... Read More

Gold prices bottomed on July 15, 2022, and moved up nicely to a top on August 12.  That up move in prices was accompanied by an up move in the McClellan Price Oscillator, which is the difference between a 10% Trend and 5% Trend (19 and 39 EMA) of closing prices.  It is a cousin of the McClellan A-D Oscillator, which is based on the daily difference between Advances and Declines.

The Price Oscillator has a fun trick that it shows us every so often when it creates what we call a “fishhook”... Read More

The CPI inflation rate ticked downward very slightly in July, from 9.0% to 8.5% per year.  That is good, but 8.5% is still too darned high.  And no, the just-passed “Inflation Reduction Act” does not get any credit for this small downtick in the annual inflation rate.

What does deserve some credit is the natural cycle in the inflation rate data depicted in this week’s chart.  It shows a 5.31-year cycle which is evident in the CPI data, and which has been working since shortly after World... Read More

In the Investors Intelligence survey of newsletter writers and investment advisors, the bulls are back to outnumbering the bears once again, as fears of a further bear market are abating quickly.  This week’s chart shows just the percentage categorized as bears, and it is plotted on an inverted scale in order to correlate better to the price action.  Bears this week are down (up in the chart) to 27.8%, versus 30.1% last week, and 44.1% at the extreme point in late June 2022.  And bulls (not... Read More

Everyone wants to be a contrarian, and to go against the crowd.  So the constant quest is to know what the crowd is thinking and doing, so that one can go against it. 

This week’s chart shows the total combined assets held by GLD and IAU, which are the two largest ETFs that are backed by gold bullion.  Normally these asset levels move up and down in step with gold prices.  It gets much more interesting when there is a disagreement, like what we are seeing now.

The pop higher in gold... Read More

Starting in December 2000, the Bureau of Labor Statistics has published what it calls the Job Openings and Labor Turnover Survey (JOLTS).  In simple terms, it is a measure of how many job openings there are. 

It has been showing astounding growth ever since the Covid Crash in the spring of 2020.  But just recently, it saw a peak in March 2022 at 11.8 million job openings, and as of May it is down to 11.2 million.  The next JOLTS release is scheduled for August 2, 2022.

The point of this... Read More