Blogs

GOLD TO BEAT DJIA

This morning the InvesTRAC short term BIG 7 comparative pperformance model confirms that gold is going to outperform the Dow. All technical indicators show that gold is on track to beat all of the 6 other components of the model. Have a look at the chart of the gold/DJIA ratio below...the long term downtrend from the top at 1.746 is still intact...the recent weakness held above the 0.725 low and the ratio has now pushed up through the first downtrend which opens the way for an 11 percent rally to the next visible resistance at 0.860.

GOLD TO BEAT US DOLLAR INDEX

The short term run of InvesTRAC's BI 7 comparative performance model shows that gold has signalled that it is going to beat the US dollar iindex. The gold/USD index ratio is rising at 0.8 on the OB/OS indicator as it comes off oversold (scale 0-100) which gives it plenty of upside potential especialyy as the Forecaster is showing rising trend with tops on Aug1 and September 10.

GOLD TO BEAT TREASURIES

The bond market responded well to Janet Yellen. Gold and silver didn't fare too badly. So what to do going forward...hold gold or treasuries? On running the BIG 7 short term comparative performance model I noticed that gold has signalled it is going to beat the 30 year TBond price. The gold/tbond ratio's OB/OS indicator has just come off oversold 0 and now rising at 1.7 (scale 0-100) which allows it to go higher and the InvesTRAC forecaster is showing a rising trend until early September.

IS IT TIME FOR GOLD TO STRENGTHEN RELATIVE TO PALLADIUM?

It would have been a great trade to have bought palladium at $584 and have sold gold at $1710 in equal value back in October 2012 because the ratio palladium to gold doubled in that time. But what to do now? The daily chart of the ratio below shows that the long term uptrend is still intact but the short term uptrend has been reversed. Next visible support is at 0.600 ...the ratio's short term OB/OS indicator has dropped from 100 to 93.3 which allows scope for lower levels especially with the InvesTRAC forecaster pointing to a declining trend until July 30.

IS IT TIME TO SWITCH FROM US STOCKS TO CHINESE?

Is it time to switch out from US stocks into Chinese stocks? After all, the S&P 500 index is up 20.8 per cent over the past year whereas the Shanghai index is up just 6.8 per cent. The InvesTRAC comparative performance model is suggesting that appropriate action could be to favour Chinese over US stocks at this time with the forecaster indicating that we could see strong SSE and weak S&P500 until mid July.

WTI CRUDE CAN GO HIGHER

We last looked at WTI Crude relative to Natural gas and concluded that crude would be outperformed by natural gas. Today we look at the weekly price of WTI Crude and as you can see it has broken up through resistance around the $105 level which allows it to test 112.20 and 114.80 and if it beats the latter it could move up to test the previous eak at 147.30. Also interesting is that on the InvesTRAC short term Big 7 Comparative Performance model crude is beating the other other six components namely DJIA, TBONDS, USD INDEX.

GOLD AND SILVER SHARES TO BEAT PRICE OF THE METALS?

The XAU index rises faster than rising prices of gold and silver and falls faster than declining prices of gold and silver. And over the fast week or so the metals and the XAU have been rising with the XAU rising faster.

PLATINUM PRICE CAN GO LOWER IN SHORT TERM

It's hard to believe that the platinum price has not gone higher given that the South African platinum mining industry has been brought to a standstill since the strike started January 23.Now InvesTRAC's short term model is suggesting that price can go lower  with the forecast showing lows June 30 and July 21. The daily chart below shows that price has been locked in a trading range between 1403 and 1484 for the past few months...currently it is encountering a measure of support from its 200 day moving average but looks like it is on its way to test the 1403 support level.

NATURAL GAS UP AND WTI CRUDE DOWN

In a recent blog it was pointed out that WTI Crude was expected to weaken and now when we run the InvesTRAC comparative performance model on the Energy sector we get a buy for natural gas and a sell for all the other components. So let's look at the WTI crude/ Natural gas ratio...but first the technicals...the short term system has turned down with the InvesTRAC forecast model showing a declining trend until June 26-30....now for the daily chart below which shows that after falling almost 50 percent in 28 weeks the ratio then clawed back 42 percent of the decline over the past 12 weeks.

US 30 YEAR TBOND PRICE MAY HAVE PEAKED

Curse or not, we are living in very interesting times...living during the greatest and riskiest financial experiment ever. And now the markets are building for something which suggests that something is going to break. Right now InvesTRAC's Big Seven model is showing that the Dow is overbought, US Tbonds too, with gold oversold and Crude oil and CRB commodity index giving sell signals...there seem to be a lot of interesting moves underway. Could these moves be triggered by a rise in US interest rates?