Blogs

GET READY FOR SOME EXCITEMENT ACCORDING TO VIX

Get ready for some excitement...it is time for the S&P500 to start moving in a determined fashion. It has traded between 1972 and 2118 over the past four months and yet it is trading where it last was on November 20. So the index has covered a lot of ground but has been marking time....going nowhere. But now VIX is telling us that there is about to be some excitement...have a look at the daily chart of VIX below....notice how the price and moving averages have converged which invariably precedes a sharp.

GOLD/SILVER RATIO TO DECLINE WHICH IS BULLISH FOR PRECIOUS METALS

The gold/silver ratio rises and precious metals fall and conversely when the ratio declines the precious metals complex risies. Now InvesTRAC's medium tterm OB/OS indicator has started to fall, the weekly Direction Indicator is declining and the weekly price Forecaster shows an erratic trend until week ending April 17 then a sustained decline until the end of November.

US INTEREST RATE COULD WELL DROP FROM HERE

A little while ago I showed you the Dow/Tbond ratio and pointed out that there is going to be a big break one way or the other. Could it be strong bonds, weak Dow which causes the sharp move in the ratio?

TIME FOR DOW/TBOND RATIO TO MAKE A MOVE

The Dow/Tbond ratio is poised for a big move. Have a look at the weekly chart of the ratio below and you can see that there has been a some volatile action since the top made on December 27, 2014 at 12.84...over the past 61 weeks the ratio has had some sharp swings and is now just 3 percent lower. Interesting that the decline from 13.00 to 5.15 lasted a mere 86 weeks whereas the subsequent recover has taken a little less than five years, and now the ratio is buiding for another sustained move.

BULL MARKET IN DOW JONES 30 INDEX STILL INTACT

Who would have believed in 1974 that the bear market low in the Dow Jones 30 index would see the start of an almost 30 year bull market which would peak at the beginning of 2000? Perhaps Warren Buffet had that confidence. And who would have believed that the low in 2009 would be the start of another wave higher which would last into 2015? Not me!

SILVER WHEATON POISED FOR SHARP MOVE

Silver Wheaton has been in a short term sell situation for a couple of weeks but it is still positive on InvesTRAC's weekly system or medium term model. And it is about to do something which may prove to be quite startling. Have a look at the daily chart below ...the rally has lost traction and yesterday price dropped to support from the rising trendline and at the same time price and moving averages are converging which often precedes a sharp move. InvesTRAC's forecast model is showing that we should expect a move to the downside which will imact the precious metals complex adversely.

WILL GOLD BE ECLIPSED BY THE DOLLAR UNTIL OCTOBER 2016?

The strength in the US dollar has amazed some...certainly many hard core gold bugs have found it hard to swallow, especially if they believe that the dollar ought to be weakening and gold strengthening in these days of fiat money. But take a look at the monthly chart below which shows the gold price/USD index ratio (using InvesTRAC's USD index)...From a low of 1.252 in March 2001, the ratio rose over eleven times to reach 14.57 in October 2011 as gold pulverised the dollar.

HAS THE DOLLAR REACHED THE TOP OF ITS RISE AGAINST RUSSIAN RUBLE?

The Russian ruble has taken a double whammy with sanctions on the one hand and collapsing oil price on the other. Interesting too is that the timing couldn't have been worse because the dollar has been universally strong. The dollar is overbought and the oil price is trying to recover which should go a long way to give some respite for the Russian currency.

USDOLLAR: SHORT TERM OVERBOUGHT. LONG TERM JUST GETTING STARTED

The US dollar can't keep going up, can it? Many analysts are finding it hard to comprehend the continued dollar strength. Afterall the US is a basket case situation they say. Yes, but the rest are worse basket cases. Have a look at InvesTRAC's monthly chart of its USD index showing 45 years of history with today's levels used as a January month end close. Clearly the rise off a 12 year base is meaningful and suggests that there is huge upside potential in the long term.

WHAT IS BRITISH POUND GOING TO DO AGAINST THE EURO?

Between July 31 last year and September 30 this year the GBP/EUR rose by 12.5 percent. From an exporters point of view the Brits can't be too happy with the rise coming at a time when exporters would rather devalue their currency than see it appreciating in value. Have a look at the chart below and you can't help being impressed how the support across the lows and the uptrend stayed intact. The big question now: is this a platform to fire an advance to a new high or is it a top? There is going to be some action!