• Category Archives Trading Strategies
  • Interview: Louise Yamada on Stocks, Tech, and Interest Rates

    While we normally see markets face pressure around this time of the year, it appears we may have dodged a bullet. This time on Financial Sense, we spoke with technical analyst Louise Yamada of LY Advisors about her take on equities, the tech sector, and what she looks for to determine market direction.
    Markets Healthy
    From the long-term perspective, markets appear to be healthy, Yamada stated. The advance-decline lines are confirming the new highs, she noted.
    Some indicators have been showing negative divergence over the year, such as new highs versus new lows. While these have come back into positive territory recently, they haven’t exceeded the readings of the past year, leaving the negative divergences in place to possibly be overcome if things improve, Yamada noted.

    This post was published at FinancialSense on 09/21/2017.


  • Apple Stock Slump Continues – Tests Key Technical Support

    Apple share price continues to tumble since it unveiled the iPhone 8 and X, following yesterday’s triple whammy of bad news.
    Back at it lowest since August 1st’s after-hours spike on earnings, AAPL is now testing the key 100-day moving average…
    And as goes AAPL, so goes the Nasdaq.. again

    This post was published at Zero Hedge on Sep 21, 2017.


  • Gold Investment ‘Compelling’ As Fed May ‘Kill The Business Cycle’

    Gold Investment ‘Compelling’ As Fed Likely To Create Next Recession
    – Is the Fed about to kill the business cycle?
    – 16 out of 19 rate-hike cycles in past 100 years ended in recession
    – Total global debt at all time high – see chart
    – Global debt is 327% of world GDP – ticking timebomb…
    – Gold has beaten the market (S&P 500) so far this century
    – Safe haven demand to increase on debt and equity risk
    – Gold looks very cheap compared to overbought markets
    – Important to diversify into safe haven gold now
    ***
    by Frank Holmes via Gold.org
    Global debt levels have reached unprecedented levels, pension deficits are rising and the US interest rate cycle is on the turn. Frank Holmes, chief executive of highly regarded investment management group US Global Investors, believes that investing in gold is a logical response to current, unnerving conditions.
    For centuries, investors and savers have depended on gold in times of economic and political strife, and its investment case right now is as compelling as it’s ever been.

    This post was published at Gold Core on September 21, 2017.


  • Gold Ownership: A Golden Wave

    Several weeks ago, I surprised most investors by issuing my ‘Book Profits Now!’ call for the precious metals asset class. When I did so, head and shoulders top formations immediately formed on gold and GDX, and prices have swooned. Rumours of a sudden drop in Indian dealer demand appeared to become a concern for commercial traders on the COMEX. India’s monsoon season has turned out to be a bit of a ‘bust’, with both flooding and drought. Farmers buy gold with a portion of their crop profits. With only another week or two left in the monsoon season, crop sales may not be very good. Of further concern to me was the fact that the demand drop was occurring as gold arrived at the $1352 resistance zone. That resistance was created by Modi’s cash call-in that took place in November of 2016. The upcoming Fed meeting will probably mark the end of the decline related to those concerns, but there could be additional weakness until the next US jobs report is released. Please click here now. Double-click to enlarge. For investors, this gold chart tells the entire tactical story. The $1270 – $1260 area is the target of the H&S top pattern. Investors should use a two-pronged strategy to profit from the coming rally that should take gold back to the ‘Call-In Day’ resistance around $1352. I’ve outlined the $1315 – $1295 price area as the first key buy zone. Eager accumulators can buy right now.

    This post was published at GoldSeek on 19 September 2017.


  • My 2017 Silver Price Prediction Is Extremely Bullish Thanks to the U.S. Dollar

    The silver price has been looking extremely bullish the past two weeks.
    After hovering near the $17 level from Aug. 17 to Aug. 25, silver prices pushed all the way to a five-month high last week. Between Friday, Sept. 1, and Friday, Sept. 8, the metal climbed 1.7% to $18.12 – the highest settlement since April 19.
    That was 6.1% above the 200-day moving average of $17.08, which has served as a sort of resistance level. By surpassing $17.08, silver looks poised to go higher.
    But first, I expect we’ll see the price of silver retreat from here in the short term. A pullback following a 14.4% rally in just two months would be healthy at this juncture.
    In fact, I think we have already seen a start to this move, as a possible bounce for the U. S. dollar may be in the cards. The U. S. Dollar Index (DXY) – which tracks the dollar against other currencies like the yen and the euro – is already up from 91.35 to 92.07 today (Tuesday, Sept. 12).

    This post was published at Wall Street Examiner on September 12, 2017.


  • Reverse Head-and-Shoulders Pattern in Gold

    Last week, we received quite a few messages in which readers asked about the long-term reverse head-and-shoulders pattern in gold and related ratios. In today’s alert we discuss this in greater detail.
    Let’s jump right into the gold chart (charts courtesy of ***
    The shape of the head and shoulders may not be evident on the chart, so we marked it with grey rectangles (one for the head and two for the shoulders). Generally, there are several characteristics regarding the reverse head and shoulders pattern that either makes it reliable or rather insignificant. We’ll discuss the less important ones first.
    The pattern should be characterized by U-shaped bottoms, it should be symmetric and it should be confirmed by volume. Neither of the above bottoms (head or shoulders) are U-shaped. Is the pattern symmetrical? Somewhat – the distance between the head and each of the shoulders is rather similar, but the head itself is not symmetric.

    This post was published at GoldSeek on Monday, 11 September 2017.


  • Equities Topping – Breakdown Ahead?

    With the S&P 500 at 2464, it continues to hover within 1% of a new all-time high. Yet, internally, the market is deteriorating with more and more stocks moving below their 50-day and 200-day moving averages.
    Throughout 2017, the story of the rise in the S&P 500 has been a story of a fairly narrow list of very large-cap stocks that have contributed to nearly half of the index’s strong advance. Many of those stocks are very close now to breaking down through key support with the S&P Index also flirting above key levels. For the S&P 500 (last at 2463.36 as we pen this update), a couple of key levels to watch are the 2458 level, which is close in support, and then just below that is the 50-day average at 2454.50.

    A break below 2454.50 would be short-term bearish and would turn up the credibility on the potential that the S&P 500 has been moving in a large distribution top over the last few months. It is potentially a head and shoulders pattern, but would still need a downside break down to confirm that outcome. Until the S&P breaks below the 100-day average (at Point c on the chart above) at a reading of 2431.15 AND key horizontal support at approximately 2410, it would be too soon to call a top is in place. Mind you, that does not mean that the entire structure right now looks incredibly vulnerable. In addition, any time we are talking about the potential for a serious break down in the stock market, we always want to watch several different indices for confirmation.

    This post was published at FinancialSense on 09/08/2017.


  • Gold is Headed to $1,500 by Year End

    A confluence of factors has been pushing the price of gold higher over the past few weeks and I believe it is headed for $1,500 by the close of 2017. After hitting a low around $1,200 in July, the price of gold has since advanced by more than 10% or $140 to $1,340.
    The chart shows a significant breakout through both the 100 and 200-day moving averages over the past month. More importantly, gold pierced trend-line resistance that had been in place for over a year.

    This post was published at GoldSeek on 6 September 2017.


  • Dow Industrials Warned – Nasdaq Answered

    If you have been listening to our weekend show, I’ve covered some topics weekly that suggested we were anticipating some seasonal performance issues ahead in August with the month typically being a month we’ve seen volatility in the past. Considering the US equity markets were at all-time highs in July, it wasn’t so far-fetched an idea. Then the divergences began with the Dow Jones Industrial Average being the only index that was still going up. That’s typically a warning that breadth (or participation) was waning and a correction was due. The dip came and went and despite the natural disasters and missile shot across Japan’s bow, the market surprised everybody and rallied strong driven by technology and other growth areas. The Dow warned, but the Nasdaq answered.
    After reaching fresh highs in July, the Russel 2000, the Nasdaq Composite, and the Dow Jones Transports began to consolidate. Meanwhile, the Dow Jones Industrial Average continued to climb into August. Whenever large cap companies outperform against small cap or the energy-sensitive transport index, it’s typically a leading indicator that investors are shifting risk out of the market.

    This post was published at FinancialSense on 09/01/2017.


  • SPX: Morphology 101

    Below is a daily chart for the SPX which shows you a good example of a morphing rising wedge. As you can see there was a false breakout above the top rail and then an equal false breakout below the bottom rail, symmetry false breakouts, red circles.

    This post was published at GoldSeek on 31 August 2017.


  • Gold Stocks Portfolio Fuel

    SPDR fund tonnage (GLD-NYSE) has recaptured the 800 ton mark, and rose to 814 yesterday. This is happening as a steady wave of institutional money managers embrace gold as an important portfolio component. It’s also occurring as Indian dealers begin buying for Diwali. The result of this overall ramp-up in demand is a beautiful surge higher in the gold price! Please click here now. Double-click to enlarge this important gold chart. I call this my ‘Road To $1392’ chart. When the price of an asset arrives at major resistance in a huge chart pattern, a real upside breakout and sustained move higher can only occur if market fundamentals are aligned with the technical set-up. The good news is that for gold, this appears to be the case. Please click here now. Double-click to enlarge this monthly gold chart. The $1377 – $1392 price range is the resistance zone of a huge inverse head and shoulders bottom pattern. It is the neckline of the pattern. Note the tremendous rise in volume that is occurring as gold makes a beeline to that neckline. The Indian gold market has completed its restructuring, and Western money managers are lining up to add gold to their portfolios. The managers are not just making a one-time purchase. They are adding gold as a percentage allocation. That allocation seems to be averaging around 5%. As the funds gather new assets, they buy more gold to maintain that 5% allocation. Asian fund managers typically give gold an even higher allocation to gold in their funds than Western managers. As China and India become the main economic empires, Western money managers will tend to play ‘follow the Chindian leader’. That means the current Western money manager allocation to gold that is about 5% could easily rise to 10% or 15% in the coming years. Clearly, all liquidity flow lights for gold…are green!

    This post was published at GoldSeek on 29 August 2017.


  • Gold Stocks: Good Times Are Near

    After rallying almost $100 an ounce from the July lows of about $1210 (basis December futures), gold is consolidating its gains. Fundamentally, there isn’t much immediate time frame news from either the fear trade or the love trade. That’s the root cause of this sideways price action, and its healthy. To get some technical perspective on the consolidation, please click here now. Double-click to enlarge this short term gold chart. A small head and shoulders top pattern has appeared, and it suggests more consolidation will occur before the upside action resumes. This scenario would see gold move down towards $1272, and then rally towards $1330. Please click here now. Double-click to enlarge. On this chart, a slightly bigger head and shoulders pattern is apparent. It suggests a deeper correction to about $1250 may occur. I’ve outlined the $1300 – $1330 price zone as a good place to book some light profits on positions bought into my $1220 – $1200 buy zone. From here, investors should be viewing the $1275 – $1245 price zone as a fresh buy zone. Please click here now. Double-click to enlarge this important dollar versus yen chart. The world’s biggest liquidity movers are major bank FOREX departments, and they tend to aggressively buy the dollar versus the yen when global risk is declining. When global risk rises, they will aggressively sell the dollar against the yen.

    This post was published at GoldSeek on 22 August 2017.


  • Short-Term Improvement, Long-Term Concerns

    Most averages are creeping higher today, but the last couple of weeks of volatile price action has caused some significant damage to the charts. In particular, there are concerns developing in the S&P, the small-caps and the Transports.
    Let’s begin with the S&P.
    Below you can see a daily chart of the S&P 500 showing the development of a possible head and shoulders top. The left shoulder and head have been completed, with this latest downswing taking prices back to the neckline, near 2420. The index has also fallen below its 50-day moving average, which is starting to roll over.

    This post was published at FinancialSense on 08/22/2017.


  • Stocks and Precious Metals Charts – Weekend Edition – Violent Delights

    “These violent delights have violent ends
    And in their triumph die, like fire and powder,
    Which, as they kiss, consume.”
    William Shakespeare, Romeo and Juliet
    Stocks bounced back a bit on Friday after the big selloff, while the metals continued their upward push into what could be some fairly stiff resistance.
    The task for told this week is to take out the psychological 1300 resistance and stick a close above it.
    As for silver, the 18 handle looms above.
    I have been noticing a bigger than usual divergence between the spot price of gold from Kitco, for example, and the quotes I am receiving live from the Comex.
    For example, the Kitco spot price quote right now is 1288, whereas the Comex gold continuous contract and December contract quote is 1294.
    Well, it would be more of an issue if I was striking a price for a physical sale.

    This post was published at Jesses Crossroads Cafe on 13 AUGUST 2017.


  • Are Internal Market Cracks Turning Into Chasms?

    Recently noted deterioration in market internals appears to be getting worse, as evidenced by this rare divergence in the Nasdaq market.
    One of the hallmarks of our intermediate-term Risk Model that helps orient our investment posture toward equities is breadth, a.k.a., internals. Internals measure the level of participation in the stock market, e.g., how many stocks are advancing versus declining, the number of new highs versus new lows, etc. The more participation there is, the broader the foundation for a market rally – and the more comfortable we feel being aggressively invested.

    This post was published at Zero Hedge on Aug 11, 2017.


  • Why Art Cashin Is Nervous: “10% Of The Dow Has Provided 50% Of The Gains”

    From Art Cashin of UBS:
    We’ve noted over the last two weeks that the Dow Industrials have been diverging from most other indices and particularly the Dow Transports. An important part of the divergence has been the relative narrowness of the rally in the Dow. In today’s WSJ, Justin Lahart took note of the narrowness:
    Americans cheering the U. S. stock market’s latest milestone should pause to thank the rest of the world for making it possible. The Dow Jones Industrial Average breached 22000 Wednesday after rising more than 2000 points so far this year. Boeing counted for 563 points of that gain. About 60% of its sales come from overseas.
    No. 2, contributing 283 points, is Apple, which gets two-thirds of its sales abroad.
    No. 3 is McDonald’s, contributing 239 points; foreign sales count for about two-thirds of its total.
    Indeed, while there are notable exceptions (hello, International Business Machines ), the greater the share of a company’s sales come from overseas, the better its stock has tended to perform this year.

    This post was published at Zero Hedge on Aug 3, 2017.


  • 2017 Bull Market:Testing the Boundaries of History, Has TIME Run Out?

    For the U. S. Equity market, the advance in recent days to yet another string of new all-time highs is outwardly so impressive that it makes it difficult for many market observers to even question the robust nature of the stock market. Through last Thursday, for example, the NASDAQ Composite had seen 14 of the last 16 days with a positive close. As winning streaks go, that kind of one-sided market action is a fairly rare phenomenon. For the NASDAQ Composite, this has only happened 15 times in its 46-year history. With the likes of Facebook and Amazon and other FANGS seemingly on an unending roll, it’s enough to make one wonder whether stocks will ever go down again?
    Yet it is precisely this kind of one-sided feeling that often creates and denotes the presence of a major market turn. In his recent Weekly Technical Update, veteran technician James E. Welsh zeroes in on this mentality:
    ‘Will Stocks Ever . . . If you type ‘Will stocks ever’ into your browser, Google will auto-fill this question with ‘go down again’. This is the mentality that results when the S&P trades beyond 2 standard deviations as it has in 2017 and discussed last week. Since 1928 (89 years) the S&P has averaged a decline of 11.2% in the first half of the year. The largest decline in the S&P has been 2.9% in 2017, about one quarter of the average and the second lowest ever. The S&P has not experienced a decline of 5% in more than a year.

    This post was published at FinancialSense on 08/01/2017.


  • A Market Paradox: Unprecedented Cluster Of New All Time Highs On Negative Volume

    By Dana Lyons of J. Lyons Fund Management
    Stocks have recently witnessed an unprecedented cluster of new highs occurring on negative volume.
    A number of stock bears have pointed to the supposed thin nature of the rally in justifying their skepticism. That is, the rally has been led by a relatively small number of stocks as opposed to broad participation. While we have seen anecdotes of such a condition, we can’t say that we fully subscribe to this concern. Factors such as the NYSE advance-decline line hitting new highs along with the various market cap indices, from small-caps to large-caps, also at new highs undermine the argument, in our view.
    We will say that some of our proprietary breadth measures have not supported the recent rally. When such divergences have occurred in the past, stocks have eventually dropped, confirming the signals of our indicators. However, the timing of such a reckoning can be difficult. Outside of that condition, as we said, concerns about breadth have been mainly of an anecdotal nature.
    Today’s Chart Of The Day is also best classified in the anecdotal category, though perhaps a little more alarming than some of the recent ‘warnings’ that we’ve seen. It deals with a recent odd spate of new 52-week highs in the S&P 500 on days in which declining volume on the NYSE actually exceeded that of advancing volume. There have actually been 6 such new highs in the past 3 months.

    This post was published at Zero Hedge on Jul 29, 2017.


  • Weekend Reading: Vacation Head

    Ah…yes. It is FINALLY that time of the year when I take a week off with the family for our summer vacation.
    Don’t worry, I have been fiendishly writing for the past two weeks and have blog posts all ready to go for next week. You won’t left hanging.
    However, let me just leave you today with one parting thought.
    The chart below is the S&P 500 on a WEEKLY basis going back to 1992. While it is clear the bullish trend is currently intact, which suggests the markets could indeed rise further, the deviation from the 1-year moving average is pushing more historical extremes.

    This post was published at Zero Hedge on Jul 28, 2017.


  • Internal Cracks Are Showing In The Market – Low Volume Highs

    Via Dana Lyons Tumblr,
    Stocks have recently witnessed an unprecedented cluster of new highs occurring on negative volume.
    A number of stock bears have pointed to the supposed thin nature of the rally in justifying their skepticism. That is, the rally has been led by a relatively small number of stocks as opposed to broad participation. While we have seen anecdotes of such a condition, we can’t say that we fully subscribe to this concern. Factors such as the NYSE advance-decline line hitting new highs along with the various market cap indices, from small-caps to large-caps, also at new highs undermine the argument, in our view.
    We will say that some of our proprietary breadth measures have not supported the recent rally. When such divergences have occurred in the past, stocks have eventually dropped, confirming the signals of our indicators. However, the timing of such a reckoning can be difficult. Outside of that condition, as we said, concerns about breadth have been mainly of an anecdotal nature.

    This post was published at Zero Hedge on Jul 28, 2017.