Using good old SlopeCharts, I thought I’d do a little experiment. As you know, stocks are at lifetime highs, but in nominal terms. I wondered what things look like in terms of “real” money (as measured by GLD), so I entered the symbol (SPY/GLD) and got this result:
What jumped out me is that, in these terms, we are actually lower than we were in the pre-financial crisis peak! In addition, the ultimate low for the market wasn’t the famous March 2009 bottom, but instead took place a couple of years later (which makes sense, if you look at bank and financial stocks, which plunged until then). Food for thought.
On August 11 the potential and reasoning for anticipated pivots in the US stock market and the gold sector were noted in this article: Potential Pivots Upcoming for Stocks and Gold
As for the stock market, several reasons were put forward in support of a 2nd half of September through Q4 danger period, for a correction (no need yet to talk bear market because that would be pure promotion of an agenda). Please note that standard technical analysis was not among those reasons. The stock market was then and is now, in an uptrend across all important time frames.
The reasons for the correction view noted in the article ranged from the S&P 500’s 30 month cycle, to the Fed’s Funds cycle and its proximity to the 2yr yield (this has not yet made a bear signal) to the US dollar’s potential to rally (still waiting on that one) to a rough seasonal patch that begins in mid-September. Well, today is September 15, da boyz is back from da Hamptins and the rest is up to the market’s nature to take its course. (more…)