Blogs

30 YEAR US TBOND YIELD TO RISE

Short term signals can take our focus off the bigger trend but it is worth pointing out that the 30 year US TBOND yield's short term OB/OS indicator which has a range of 0-100 was falling and got down to 31.8 three days ago and now it has swung around and is rising at 48.0 ...this is unusual behaviour stopping before reaching the bottom. In addition, the InvesTRAC forecaster is showing a rising trend into tops due June 9 and 16. So what's the chart telling us?

EURUSD HAS GIVEN MEDIUM TERM SELL SIGNAL

When we ran our weekly data this morning we saw that EURUSD had given a medium term sell signal with the indicator dropping from overbought 100 to 88.5...all 15 of the EUR cross rates we monitor we find no evidence of strength. So have a look at the daily chart of the EURUSD below...notice how it ran into the overhead resistance line and has turned down quite sharply...a dip through 1.3785 would likely open the way for further weakness which could well continue for weeks.

NASDAQ COMPOSITE SO MUCH WEAKER THAN THE DOW

The Nasdaq composite index is behaving so much weaker than the Dow...right now the Nasdaq is down just over 7% from its peak whereas the Dow is just 1/2% lower...look at the weekly chart below which highlights Nasdaq's weakness. You will notice that the decline in recent weeks in the Nasdaq has dropped it to the parallel lower channel line where it has found support...in the process you will notice that the lower part of the chart shows the Nasdaq relative to the Dow...see how it violated its uptrend week of April 4th and has dropped sharply highlighting the relative weakness.

IS THE SILVER PRICE CHEAP COMPARED TO GOLD?

Is silver cheap when compared to the gold price based on long term history? I ask this because I recently read a report which says that silver is cheap and based on historical norms should be selling at least at $80 an ounce compared to under $20 with gold around $1300. If this is true it would make sense to buy silver and sell gold in equal values and it would not matter one bit whether the precious metals are in a bull or bear market.

US DOLLAR INDEX TO STRENGTHEN

The US dollar index (USDX) is little changed from where it was in September last year. Many analysts have been forecasting its demise as a consequence of QE. But instead of going down it has now given indication that iit is going higher, at least in the short term. InvesTRAC's overbought/oversold indicator (scale 0-100) has come off the bottom and is risingat 1.1 with the Direction Indicator rising and the forecaster shows a rising trend until May 30.

DJIA/GOLD RATIO TO RISE

I continue to read advice from many experts that one needs to protect oneself from a collapse in the DJIA by buying gold and gold shares. And yet the Dow remains in an uptrend with the rally in the gold price fizzling out. So I had a look at the DJIA/GOLD ratio...the InvesTRAC short term indicator has started to rise from oversold 0 to now 8.0 (overbought 100) with the Direction Indicator rising and InvesTRAC's forecasting model indicating that the ratio could continue to rise until June 23rd.

US 30 YEAR TBOND YIELD TO RISE

You are aware that InvseTRAC's models are based on relative performance...the main model measures the seven components agaisnt one another and in processing yesterday's closings we get signals buy DJIA/sell TBONDS and buy EURUSD/sell TBONDS which prompted us to have a good look at the US 30 year TBOND yield to find that the short term indicator has lifted off the zero level and is now rising at 2.7 on its way higher to 100...the InvesTRAC forecast model sh

WEAKEST AND STRONGEST OF THE DOW 30 STOCKS

I decided to check through the 30 stocks in the DJIA in order to find the potentially relative weakest and strongest and then run them against each other as an exercise for a hedging strategy. The market direction is irrelevant as the idea is to buy the one with the most upside potential and sell the one with least upside potential ...in theory whether the market rises or falls the hedged position should make a profit.

US DOLLAR IS IN TROUBLE

The US Dollar index (USDX) is in trouble! The short term InvesTRAC model shows USDX weakening against the other 6 components and its 34 day indicator has dropped from 100 overbought to 87.3 as it heads towards the zero level where it will become oversold...the InvesTRAC forecaster is indicating that this weakness could continue until April 17-23 when a meaningful low may occur.

US DOLLAR IS IN TROUBLE

The US Dollar index (USDX) is in trouble! The short term InvesTRAC model shows USDX weakening against the other 6 components and its 34 day indicator has dropped from 100 overbought to 87.3 as it heads towards the zero level where it will become oversold...the InvesTRAC forecaster is indicating that this weakness could continue until April 17-23 when a meaningful low may occur.