Tag: technical analysis

Will 2021 Prompt A Big Rotation In Sector Trends?

Posted on by Chris Vermeulen

An interesting question was brought to my research team recently related to sector trends in 2021 and what may shift over the next 10 to 12+ months. We took the effort to consider this question and to consider where trends may change over time.

The one thing my research team and I kept returning to is “how will the global economy function after COVID and how much will we return to normalcy over the next 12 to 24+ months?”

We believe this key question will potentially drive sector trends and expectations in the future.

When COVID-19 hit the globe, in early 2020, a forced transition of working from home and general panic took hold of the general public. Those individuals that were able to continue earning while making this transition moved into a “protectionist mode” of stocking, securing, preparing for, and isolating away from risks. This shift in our economy set up a trend where certain sectors would see benefits of this trend where others would see their economies destroyed. For example, commercial real estate is one sector that has continued to experience extreme downside expectations while technology and Healthcare experienced greater upside expectations.

Longer-Term Sector Trends– What's Next?

When we look at a broad, longer-term, perspective of market sectors, we can see how many sectors have rallied, some are relatively flat, and others are still moderately weak compared to pre-COVID-19 levels. The top row of these charts, the $SPX (S&P500), XLY (Discretionary), XLC (Comm Services), and XLK (Technology) sectors have all shown tremendous rallies after the COVID-19 lows in March 2020. We can also see that XLI (Industrials), XLB (Materials), and XLV (Healthcare) have all started to move higher recently. Continue reading "Will 2021 Prompt A Big Rotation In Sector Trends?" →

Can You Imagine Bitcoin At $103,000?

Posted on by Aibek Burabayev

Some investors believe that the price of Bitcoin could hit $100k. In this post, I'll share some measurements I made in the bitcoin chart to see if there is some evidence for such strong optimism.

There is a logarithmic (log) monthly chart of bitcoin below. I chose the log scale to show you the coin's relative performance. It will reveal the different angle of view on the price dynamics for you.

Monthly Bitcoin Chart

We can highlight two completed large moves to the upside marked with numbers accordingly. On the right side of each move, there are light blue statistics windows showing how much, how long, and how sharp the move was. Continue reading "Can You Imagine Bitcoin At $103,000?" →

Treasury Yields Suggest A Top Is Near

Posted on by Chris Vermeulen

Historically, whenever the Treasury Yields fall below zero, then recover back above zero, the US/Global markets reach some peak in price levels within 3 to 8+ months. My research team and I believe the actions of the global markets may be setting up for a future peak in price levels sometime in the next 6 months. We believe this will start when the Treasury Yields cross above the “Breakdown Threshold”.

Expect a continued rally as long as yields stay below certain levels.

In 1998, a very brief drop below zero in yields prompted a minor pullback in the markets before the bigger top setup in 2000. This pullback in price aligned with what we are calling the “Breakdown Threshold” level on Yields near 1.20. After the Yields crossed this Threshold, briefly, in 1999, they fell back below this level and the US stock market continued to rally toward an ultimate peak in 2000.

In late 2000, Yields collapsed well below the zero levels and recovered back above zero in early 2001. Just 3+ months later, Yields had rallied above the Breakdown Threshold level (1.2) and the US stock markets had already begun to breakdown as well. This instance, the 2000-01 peak, took place after an Appreciation cycle phase prompted an Excess Phase Rally (the DOT COM bubble). The “Rollover Top” that took place near this top may be similar to what we see happen in 2021 if our research is correct. Continue reading "Treasury Yields Suggest A Top Is Near" →

The Rebels From Reddit Favor Silver

Posted on by Aibek Burabayev

The internet is still one of the most revolutionary things invented. The new level of communication and coordination it gives us is just amazing. Hedge funds could not imagine a sudden coordinated attack that started as a post on Reddit could impact them so hard. The next market in their crosshairs? Silver!

The GameStop frenzy just let the dogs out. Lately, the retail investors from the famous Reddit chat Wallstreetbets started looking towards the iShares Silver Trust ETF (SLV) as they are looking forward to profiting from the same strategy of short squeeze earlier mastered on GameStop shares. They chose SLV ETF because its shares are backed with physical silver.

I prepared two silver charts to show you how the retail market force changed the structure and its outcomes.

Silver

There is an optimistic scenario depicted in the chart above. It implies the completion of the entire corrective structure. The red leg 2 down is considered to be done as it traveled only 0.618 of the red leg 1 distance. As you may remember, it is the Fibonacci ratio. The joint between legs 1 and 2 looks weird but is yet possible. Continue reading "The Rebels From Reddit Favor Silver" →

Can The Silver Bugs Alter The Macro?

Posted on by Gary Tanashian

As to the post’s title, they sure are trying. Despite doubts that the stodgy old likes of me may have.

Silver

But for two days at least dem bugz is successfully battlin’ dem boyz on da COMEX. The result is that the Silver/Gold ratio (weekly futures chart) has been rammed to a new high for the post-crash move. If we back completely away from the #silversqueeze punchbowl, this is an indicator guiding the way for forward inflation.

silver gold ratio

So again, can the silver bugs alter the macro? Are the silver bugs altering the macro or is silver just doing what it has been technically capable of doing all along? Since well before #silversqueeze (a ‘me too!’ operation to the famous Reddit plays of late) was promoted by its originator, gold had been trending down vs. silver. Continue reading "Can The Silver Bugs Alter The Macro?" →