April 2, 2021

Market Update 4/1 – The Copper/Gold Ratio and Inflation Trends

The copper/gold ratio is churning at 8 year trendline resistance. A pullback/consolidation of gains over the last year (the ratio bottomed in April 2020) ‘makes sense’ from this level. This is an important ratio to watch for clues on interest rates (Gundlach often references this ratio) and trends in inflationary/deflationary assets (notice the deflationary crash into the 2009 low and recent inflationary rally for example). I prefer to look at the 30 year bond rate rather than the 10 year note because the long end is more indicative of inflation. The copper/gold ratio and U.S. 30 year bond yield are shown in the chart below. So…pullback in the ratio from resistance…and pullback in rates (also from resistance…see 2 charts down)…which may mean a deeper pullback in the ‘inflation trade’. In FX, this would mean higher USD (already underway), lower commodity currencies (getting started), and lower Yen crosses (waiting on the turn).
April 1, 2021

Market Update 3/31 – Gold Turning?

Action in PMs is interesting following today’s turns higher in gold and silver. Silver turned up from beneath the early March low but gold never broke the early March low. This non-confirmation is typical at turns. I’m watching gold with a closer eye right now due to the trendline from the January high (the 2021 trendline). A break above would indicate a behavior change and shift focus to the center line of the channel from the August 2020 high near 1780.
December 17, 2020

Market Update: December 17

old pulled back to 1819 before resuming higher. The next level of interest is 1921/30. This is the 2011 high, 2 legs up from the low, and a slope confluence (short term bullish upper parallel and medium term bearish upper parallel).
December 7, 2020

Scandex Technical Weekly: 12/06/2020

Interestingly, a daily volume reversal triggered on Friday from a 2 year high in EURUSD. There have only been 4 instances of this happening since inception of the euro (see chart below). If a top is in place at Friday’s high, then impulsive weakness likely extends towards 1.2040 before a bounce. That bounce would present the opportunity to short.
December 3, 2020

Market Update: December 2

Gold is one of the only things I’ve gotten right recently. Watch for resistance and a reaction near 1849. If price pulls back from there then I’d keep 1800 in mind for support and a higher low against the 11/30 low.
November 29, 2020

Scandex Technical Weekly: 11/29/2020

Right on cue. Bitcoin plunged last week before bouncing back. This is the 2nd weekly volume reversal in the last 3 years. The other one was in June 2019. Watch for resistance from daily reversal resistance at 18732
November 23, 2020

Market Update: November 23

Gold tagged proposed resistance on Friday and dumped today…beautiful. Price is quickly approaching the long held support near 1780. This level is an important parallel and the lower channel line from the bearish channel off of the August high. I’ll be paying close attention to 1780 for reversal evidence.
November 19, 2020

Market Update: November 19

Assets prices were down in early U.S. trading as the USD rallied but everything reversed course when the magical U.S. session got underway (stocks up, metals up, USD down, etc.). I still like gold lower but a bit more strength may be in order to test resistance near 1876.
November 18, 2020

Market Update: November 18

Neither SPX or the Nasdaq have broken above their reversal day highs from last week (11/9). What’s more, SPX has reversed yet again from the line that connects highs since 2018. Don’t forget that this line crosses major pivots for the last 88 years (monthly chart is below). U.S. equity valuation is at a peak as well (see 2 charts down).