Blogs

INVESTRAC'S FORECASTING MODEL SAYS DJIA TO FALL IN JUNE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

WTI CRUDE SHOULD SOON MAKE A MOVE

WTI CRUDE made a peak in early March, dropped back and then attacked the March top in mid April which failed and once more it has failed at the barrier across the tops...this time it has dropped back to its short term uptrend which leaves two critical levels as highlighted below...one of which will give way fairly soon. The InvesTRAC daily Direction Indicator is rising but could turn down today if price closes weaker and the forecaster shows a top in place with another stab on the upside into Tuesday and then it drops away until June 24th.

RUSSEL 2000 TO BEAT THE DOW 30 OVER NEXT FEW WEEKS

The daily chart below shows the DJIA on top and the Russel 2000 beneath plotted daily ...now it is good to know that the Dow is comprised of the 30 biggest cap stocks whilst the Russel 2000 measures the performance of the small-cap segment of the U.S. equity universe.

DOW'S CURRENT WORST PERFORMER

In my last blog I was anticipating that the Nasdaq Comosite index would push higher beating the Dow but that the Dow could make a new high....and I pointed out specifically that Google and Facebook would be top performers. In the event these are the gains since then: Dow +0.9%, Nasdaq Comp +2.6%, Google +5.0% and Facebook +4.9%....clearly the InvesTRAC comparative performance model can select winners but what about losers? Well the model is saying that in the short term two stocks likely to behave poorly are Walmart and AT&T.

RALLY IN NASDAQ COULD LEAD TO NEW HIGH IN THE DOW

Whilst we have been watching the InvesTRAC short term model to see if the Dow is going to give a sell signal, the Nasdaq Composite index has given a short term buy signal which could have an interesting knock-on effect. Have a look at the chart below and you will see that Nasdaq's drop in March was so much greater than the Dow's...the Dow is holding support which looks like staying intact whereas the Nasdaq should beat 4155.1 (if technicals to be believed) and continue higher.

GOLD TO MAKE SHARP MOVE SOON

This is an alert. The gold price has formed a triangle type pattern and is dropping out of it, plus the moving averages have converged with price. This type of action invariably precedes a sharp move

 

 

 

 

 

 

 

 

 

 

 

DJIA TO BE WEAKER THAN TBONDS

When we ran the short term comparative performance model this morning we got a "buy Tbonds sell Dow" signal...so we ran the weekly/medium term view to see if this model is giving the same signal as the short term...it is. The 34 week OB/OS indicator declining, Direction Indicator declining with RSI not oversold at 49.1...the InvesTRAC forecaster shows declining trend until week ending July 1st.

WTI CRUDE TO OUTPERFORM NATURAL GAS

The InvesTRAC comparative performance model is showing that in both the short and medium term trends, Natural Gas is the weakest of the energy complex. So I thought it would be good to look to see what the WTI Crude/Nat gas ratio looks like...the ratio's 34 day OB/OS indicator is rising at 17.6 with the Direction Indicator rising and the InvesTRAC forecaster showing a rising trend until july 31 ....there could be a minor top June 4 and after brief setback the rise should continue.

IS WTI CRUDE ABOUT TO OUTPERFORM CRB INDEX?

When we ran the comparative performance models yesterday we noticed that the OB/OS indicator for the WTI CRUDE/CRB INDEX ratio which had been dropping from 100 had reached 76.8 and then turned up and is now rising at 86.9. In addition the short term Direction Indicator is rising and the InvesTRAC forecaster shows a rising trend into the second half which means that the ratio should move higher as WTI Crude outperforms the CRB index in relative  terms.

GOLD/USD INDEX RATIO TO GO LOWER

Gold bugs are looking for the gold price to recover and believe that it is just a matter of time before we witness the demise of the US dollar. Over the past few days our short term comparative performance model has been signalling that we ought to see gold weaken relative to the US dollar which is the opposite scenario to what the gold bugs are wishing for. The ratio's short term direction indicator is declining and the InvesTRAC forecaster is shwoing weakness until June 24. But what does the chart show us?