Pull the trigger with confidence.

One of the not too surprising correlations in the financial markets is shown in this week's chart.  There is a strong positive correlation between the dollar price of crude oil and the Canadian dollar to US dollar exchange rate.  The relationship is not surprising because Canada is a major oil producing country, and so as goes the price of oil, so go the fortune's of Canada's currency.

But as we see in this week's chart, while there is usually a very strong positive correlation, the two do... Read More

The proponents of Bitcoin and other crypto currencies have long argued that it is like gold, serving as another venue for storing your wealth and not having it subject to the vicissitudes of fiat currencies.  They also argue that it is a great medium of exchange, although that latter part still really has not taken off yet.

The curious point about this comparison of Bitcoin to gold as another currency alternative is that prior to 2022, the value of Bitcoin and the price of gold were not... Read More

Back in March 2023, I wrote a piece here titled, "Three Signs Employment Is Going to Take a Hit".  It looked at 3 different leading indication relationships that were all calling for a rise in the unemployment rate.  This week's chart takes a closer look at one of those, the message from the inflation rate.

The key insight for understanding this relationship is that the plot of the CPI inflation rate has been shifted forward by 2 years to reveal how the unemployment rate tends to follow in... Read More

There are fishhook structures forming in several indicators, and here is why we get excited about that. 

A fishhook structure forms in a Price Oscillator or Summation Index chart when there is a brief reversal of trend that does not persist.  It can happen in either direction, and this week's lead chart of the McClellan Price Oscillator for the SP500 shows several examples of it happening in both directions.  A fishhook says that the effort to reverse course has failed, and that opens the... Read More

Some analysts talk about seasonality in gold prices, but this does not make sense because of a very important factor.  Gold prices have a dominant 13-1/2 month cycle, not an annual cycle, and so looking at annual seasonality does not make for reliable projections.

This 13-1/2 month cycle was due for its major cycle low in July to August 2023.  I always speak of its due dates in extremely approximate terms, because gold's actual bottoms can arrive a month or two early or late versus the... Read More

The latest data just out on the monetary aggregate known as M2 showed a continued shrinkage of the money supply.  M2 in nominal terms is now down 3.7% from a year ago.  But at the same time, nominal GDP (not adjusted for inflation) for Q2 of 2023 is up 6.3% from Q2 of 2022.  That means the larger size of the economy is having to get by with less money circulating around to keep everything lubricated.

Money supply is like oil in an engine.  You need a certain amount to keep everything coated... Read More

ETF investors who are interested in gold have long been able to turn to products like GLD and IAU as ways to invest in gold.  Those ETFs buy and sell gold as needed to back the shares of the ETFs, and the amount of their holdings vary with investor demand, which keeps the share price of those ETFs pretty close to their net asset value (NAV).

A much older product, which is still around, is the Sprott Physical Gold and Silver Trust (CEF).  It holds the CEF symbol because it was formerly known... Read More

If you are a really long term investor, then you want to buy stocks when everyone is unhappy, and no one likes the stock market or the economy.  And when everyone is elated, that is the time to eschew stocks and turn to other assets.

This week's chart looks at the DJIA/Gold Ratio going back a few decades.  And for comparison it shows the University of Michigan's "Survey of Consumer".  That sentiment survey data just hit an all-time low reading in 2022, when inflation was really high and... Read More