Pull the trigger with confidence.

Gold prices have moved up by almost $200 off of the October lows.  Ordinarily that would bring a response by investors to start buying into GLD and IAU, the big gold bullion ETFs.  But they are not doing that (yet), and that is really interesting.

The normal behavior by investors is to buy into these ETFs when gold is rising, and sell out of them when gold prices fall.  Extremes of either buying or selling can be useful indications of a sentiment extreme, worthy of a top or bottom for... Read More

After trending downward since the summer of 2020, T-Bond prices have seen a small upturn here in November 2022.  That price rise for T-Bonds had coattails, helping to boost the prices of investment grade corporate bonds.  One effect of those corporate bonds moving higher is that the Advance-Decline (A-D) data for them has also seen a sharp upturn, which has resulted in a really high reading for the McClellan Oscillator in this week’s chart.

The classic McClellan A-D Oscillator that my... Read More

A lot of market analysts like to use Pearson’s Correlation Coefficient, because it is included in their software, and it is pretty easy.  You can use it quite easily in any spreadsheet program.  But just because a tool is accessible and easy to use does not mean that it is the right tool, or even a useful tool.  By failing to understand how a correlation coefficient calculation works, an analyst can reach some bad conclusions.  What follows is a brief course on what correlation coefficients... Read More

I like getting the answers ahead of time, and one of the fun relationships that does this is shown in this week’s chart.  The movements of gold prices tend to get echoed almost 20 months later in corresponding movements of oil prices.  This relationship works really well, most of the time, but it admittedly went haywire for a while in February 2022 when Russia invaded Ukraine.  We should forgive gold for not knowing that was going to happen. 

Since that event, and its delivery of a brief... Read More

We have all heard that an economic recession is imminent, because after all the Fed is tightening aggressively, and we have an inverted yield curve.  On top of that, the stock market has fallen all during 2022, an indication which economist Paul Samuelson famously quipped back in 1966 had, “forecasted 9 of the last 5 recessions.”  But the unemployment rate in September 2022 was still low at 3.5%, and the latest preliminary GDP numbers out for Q3 2022 show that the economy is still growing. ... Read More

I want to introduce you to a really old indicator created a few decades ago, but which still has relevance today.

This week’s chart shows an indicator that technical analysts for years have referred to as the “Coppock Curve”.  Developed years ago by the late E.S.C. Coppock, who called it his “Very Long Term (VLT) Momentum indicator”, this is a super slow and super long term indicator.  Its purpose is to pick out the really juicy long term bottoms, when it shows a deeply negative reading, ... Read More

As stock prices were rebounding strongly on Oct. 13 from an initial bad reaction to CPI data, there was no confirmation of that price strength from the bond-related closed end funds (CEFs) which trade on the NYSE.  These issues are often blamed for supposedly contaminating the composite Advance-Decline (A-D) data, but that criticism only comes from people who have not looked at the actual data. 

I generate these data myself, because I find that they are terribly useful.  The Bond CEFs are... Read More

The data that the CFTC publishes in its weekly Commitment of Traders (COT) Report tell us about the positioning of the different types of traders that they track.  That can provide useful sentiment indications for a variety of futures markets, if interpreted correctly.  This week, I look at how the COT data on Bitcoin futures go against how things normally work.

The “commercial” traders are the ones who use the subject commodity in their trade or business.  And usually, they are the smart... Read More