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VIX Open Interest Says This is Not a Top

 
weekly Chart In Focus

The VIX futures contract is a comparatively new product in the financial markets, first traded in March 2004.  It has come to be an important product, especially for hedge funds who like to make bets with VIX futures.  And in 2020, it is behaving in a way that is quite unusual, and thus worthy of comment.

VIX futures first traded in 2004, but did not catch on as a meaningful part of the financial markets until 2012.  That was when VIX futures first exceeded 200,000 contracts, and so it is a... Read More

Gold Prices Lead Interest Rates

 
weekly Chart In Focus

Gold prices are important not just to traders of gold coins, but also as a great leading indicator of lots of things that will happen in the future.  This week’s chart shows one of the messages we can take from gold prices, which concerns long-term interest rates. 

In this chart, the plot of gold prices has been shifted forward by 20-1/2 months, in order to help reveal how the dance steps that gold prices make tend to get repeated by long term interest rates.  The Treasury Yield Index (TYX)... Read More

Presidential Cycle Pattern Calls for Choppy October

 
weekly Chart In Focus

The SP500 has been correlating very strongly with its Presidential Cycle Pattern (PCP) over the past 5 months.  It does not always correlate so strongly, so to see this current strong correlation gives greater confidence for how prices should behave forward from here.  The key message is that October should see a lot of sideways chop, as it normally does in an election year, as investors worry about the outcome of the upcoming presidential and congressional elections.

One curiousity is that... Read More

Gold and Small Caps, A Broken Relationship

 
weekly Chart In Focus

Can this marriage be saved?  The normal condition for the past 3 decades has been for gold prices to generally move in step with the Russell 2000/1000 relative strength ratio shown in this week’s chart.  When the two disagree, it is usually the relative strength ratio which ends up being right about where both are headed. 

Since 2018, however, that normal relationship has not been working right.  The Fed’s efforts to boost economic growth, especially in the wake of the March 2020 Covid... Read More

Is QE Good For Gold Prices?

 
weekly Chart In Focus

The total Fed holdings of Treasury debt and mortgage backed securities (MBS) held by the Fed are now up to $6.4 trillion, and up by $68.8 billion this week for the weekly data reported on Sep. 16.  All of that money-printing is adding to the total money supply, and it has assuredly helped to lift stock prices up out of the February to March 2020 Covid Crash. 

A lot of analysts believe that all of this money printing is bullish for gold prices.  That belief system actually makes a lot of... Read More

Circling Back to a Recent Non-Divergence

 
weekly Chart In Focus

Back on June 4, I wrote about how “Non-Divergences Are Better Than Divergences” in terms of seeing confirmations that there is more trending movement ahead.  Analysts get excited about marking the turning points for prices, but trends are where the money gets made.  So if you can get a message to not let go of a strong trend, and to not get shaken out on suspected trend change signals, that is a wondrous message to receive.

In that article, I shared the indicator which is featured again in... Read More

COT Report Data on Copper

 
weekly Chart In Focus

Many analysts believe that high copper prices are a bullish statement about the future of economic growth generally.  I would amend that slightly to say that rising copper prices make that statement.  But prices which are too high, especially without support, represent a problem, and a warning.

Copper prices fell during the Covid Crash in March 2020, along with everything else.  And they have rebounded nicely since then, going well above the January 2020 high and giving a bullish vote for... Read More

Rainbow Convergence In T-Bond Prices

 
weekly Chart In Focus

Back in February 2019, I gave a brief lesson on a bit of charting magic known as a “rainbow convergence”.  T-Bond prices this month have given us another great opportunity to examine this topic.

This week’s chart is one which has been featured frequently this month in our Daily Edition.  What we are seeing is a textbook example of what we call a Type 2 rainbow convergence.  But I am getting ahead of myself.

My father Sherman McClellan and I coined the name “rainbow convergence” back in... Read More

 
Daily Timing Chart

 

10/23/2020 IssuesVolume(000s)
McC OSC 36.102 154334
Sum Index 2066.208 1862129

More Data

The McClellan Oscillator

 

OscillatorCreated 1969, the McClellan Oscillator is recognized by technical analysts as the essential tool for measuring acceleration in the stock market. Using advance-decline statistics, it gives overbought and oversold indications, divergences, and measurements of the power of a move.