Pull the trigger with confidence.

The McClellan Price Oscillator for gold futures prices has reached a pretty high level, equivalent to what it did at the price top in March 2022, and it has just now turned down.  This is a bearish signal and could set off a pretty big pullback. 

The McClellan Price Oscillator is a cousin of the more famous McClellan A-D Oscillator.  My parents created both of these back in 1969.  That research grew out of their desire to get a better signal than could be gotten from looking just at moving... Read More

The 2-year T-Note yield says that the Fed should be all done raising rates now.  But the PhDs running Fed policy think that they know better, and insist that they are not done raising short term rates.  This week’s chart agrees that there are still more months of rising short term rates ahead.

This leading indication relationship employs data from the CFTC’s weekly Commitment of Traders (COT) Report.  The lower plot represents the net position of the “commercial” traders of eurodollar... Read More

Price pattern analogs are fun to find and track, as long as one understands that the correlation is never going to be absolutely perfect.  And the additional point that must be understood is that every pattern analog breaks correlation eventually.  They most often do that at a point in time when you are most counting on them to keep working.

This week’s chart shows a pretty thorough breaking of correlation with a prior pattern, in this case the bear market of 2007-09.  It has been working... Read More

Gold prices are breaking out here in January 2023 after chopping sideways for all of December 2022.  That is getting precious metals investors excited.  But there is a problem with this strength by gold: it is not being confirmed by one of gold’s fellow travelers.

TIP is the iShares ETF which owns various maturities of Treasury Inflation Protected Securities (TIPS).  These are special U.S. Treasury Bonds, issued by the Department of Treasury with terms of 5, 10, or 30 years.  What makes... Read More

Now that the November 2022 mid-term elections are behind us, the stock market is now in year 3 of the 4-year presidential cycle pattern. Some analysts look at that on a calendar day basis, but I prefer to count the years as beginning on November 1 for this purpose, since the stock market typically responds to whoever gets elected president as soon as it knows the outcome.  Usually that is right away, although back in the year 2000, it took all the way until mid-December to settle things.

The Fed boosted the size of the money supply in a huge way because of Covid, exacerbating an upswing that was already underway in the ratio of M2 to GDP featured in this week’s chart.  The cool thing about this ratio is that it tells us what is ahead for the stock market about a year ahead of time.  It does so imperfectly, but it is still a useful message to listen to.  And now this ratio is falling, faster than it ever has before, so we are going to get to find out what that means.

When... Read More