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Gold’s strength isn’t a one day, one week, or one month thing. The king of precious metals has outperformed equities over every meaningful time horizon. If the media presented the stock market in real money terms (that is to say, gold) the interest in the stock market would be 10% of what it is today, because people would realize that stocks peaked in late 1999 and haven’t revisited those highs since!
I’ll start off with a simple fact: on an intraday basis, today was the highest price level in the history of the Milky Way Galaxy on almost every major index. Also, today my entire portfolio was 25 short positions, and of those, 19 closed down and 6 closed up. Added to which, some of the downs were much meatier than the ups, the largest of which was 1.59% (versus -6.05% for the biggest down). The point I am trying to make is that carefully-selected charts can sometimes defy the market.
It was a devilish quarter out there for any surviving equity bears (fittingly, the SPY closed at 666). Let’s go through a dozen charts on a monthly basis (as opposed to the more typical daily) to see what we can see.
We begin with the “diamonds“, the Dow Industrial ETF, which closed at a record high. It has slightly violated its uptrend (anchored to the April 7th bottom) but, as with almost everything else, this is the fifth green monthly candle in a row.
In my last post on the US Dollar on 26th June I was looking at the very big inflection point forming here on USD that will likely ultimately resolve into a rally back into a retest of the 2022 high at 114.78, or a break down towards the 78-9 area.
Since my last post, on the monthly chart below, USD delivered a small move down to test the rising megaphone support from the 2011 low, rallied and then retested the low, slightly breaking that rising megaphone support.
What would that generally mean? Well the slight break of the rising megaphone support means that my working assumption is now that USD is in an topping process for the move up from the 2011 low, so I am looking for a topping pattern to form, and the retested low has set up a shorter term double bottom that may now deliver a strong rally.
(more…)Sounds like the world’s worst bedtime book for kids, doesn’t it? What I’m referring to, however, is the Russell 2000. See, back in November 2021, as the spasms from the Covid-19 multi-trillion-dollar bailout was hitting its apex (chart below, left circle), the Russell 2000 hit its highest point in history. Three years later, almost to the day (right circle), the $RUT beat its prior record by a tiny, tiny, tiny amount, and the press celebrated that, at long last, the curse was broken, and the “breakout” could user in a sustained bull market.
