Waiting for the gap fill

Mid-week market update: The decline in the S&P 500 seems to have been arrested at its 20 dma (blue line). The next question is which price gap gets filled first. A fill of the upside gap (in grey) would be positive for the bull case, while a fill of the downside gap (in pink) would indicate that the bears have seized control of the tape.

 

 

As investors await the market's verdict, here are some clues on how the future may develop.

The full post can be found here.

2025 high conviction idea: Gold

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

 

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). Subscribers receive real-time alerts of model changes, and a hypothetical trading record of the email alerts is updated weekly here. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 is shown below.

 

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Neutral (Last changed from “bullish” on 19-Jul-2024)*
• Trading model: Bullish (Last changed from “neutral” on 15-Oct-2024)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

Update schedule: I generally update model readings on my site on weekends. I am also on X/Twitter at @humblestudent and on BlueSky at @humblestudent.bsky.social. Subscribers receive real-time alerts of trading model changes, and a hypothetical trading record of those email alerts is shown here.

Subscribers can access the latest signal in real time here.

Why gold will beat stocks

Looking ahead to 2025, I am reiterating my bullish call on gold from a long-term viewpoint. The recent pullback represents a buying opportunity in the metal from an asset allocation perspective.

Going back to 1980, we can see several distinct gold bull-bear cycles. Gold topped out at 850 in early 1980 and began a bear market that bottomed in 1985. It traded sideways and made a second bottom in 1999 and broke out to new recovery highs in 2004 and topped in 2011. It subsequently broke out again at 2,100 in early 2024. More importantly, it is tracing out saucer-shaped multi-year bases against different regional equity indices. The gold/Dow ratio is the weakest owing to the strength of U.S. stocks, but it is nevertheless distinctive. The Gold/EAFE ratio (all ratios are in USD) is about to stage a relative breakout, and the gold/EM ratio has marginally broken out of a 12-year base.

These technical patterns argue for a bullish commitment to gold for 2025 and beyond for all investors in all major currencies from an asset allocation perspective.

 The full post can be found here.

Can Trump Make Equities Great Again?

U.S. equity prices rose strongly in the wake of Trump’s victory. As the accompanying shows, both the S&P 500 and NASDAQ 100 surged on a relative basis, while other regions tanked.

 

Donald Trump promised to Make America Great Again. While he may have accomplished that task in the short run for U.S. stocks, can he do the same for all equities?
 

The full post can be found here.

How far can the post-election rally run?

Mid-week market update: The latest BoA Global Manager Survey shows that institutions have stampeded into U.S. equities in the wake of Trump's victory. The apparent crowded long position is concerning from a contrarian viewpoint.

I had suggested on the weekend that it was time for the S&P 500 to pause and take a breather. The market duly consolidated and trade sideways this week. How far can the post-election rally run?

The full post can be found here.

How to trade the Trump euphoria rally

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

 

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). Subscribers receive real-time alerts of model changes, and a hypothetical trading record of the email alerts is updated weekly here. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 is shown below.

 

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Bullish (Last changed from “neutral” on 11-Oct-2024)*
• Trading model: Bullish (Last changed from “neutral” on 15-Oct-2024)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

Update schedule: I generally update model readings on my site on weekends. I am also on X/Twitter at @humblestudent and on BlueSky at @humblestudent.bsky.social. Subscribers receive real-time alerts of trading model changes, and a hypothetical trading record of those email alerts is shown here.

Subscribers can access the latest signal in real time here.

A cloudy crystal ball

As a quantitative equity manager, I employed diversified and uncorrelated groups of factors to pick stocks, including technical analysis, earnings expectations, valuation, growth and growth at a reasonable price. During my tenure, different markets would experience external shocks, such as financial crises (Asian Crisis) and natural disasters (Fukushim). The quantitative factor response playbook would always follow the same script. 

It begins with a price shock as everyone scrambles to assess the market implications. During this period, none of the stock picking factors worked because of the new information that isn’t reflected in the factors. 

 

As the market begins to settle down, technical analysis factors would show alpha. This would be followed by estimate revision. That’s because company analysts don’t revise their earnings estimates until they can quantify the effects of the shock. This would be followed by the fundamental factors, such as value and growth. As an example, I flattened all my positions in an equity market-neutral portfolio in the wake of 9/11 as I knew I would only be trading on noise until there was greater clarity on fundamentals.

While the Trump victory doesn’t qualify as a disaster in the manner of Fukushima or 9/11, it does represent a discontinuous external shock to market expectations whose effects are difficult to quantify. While the direction of policy changes are known, the magnitude of their effects are difficult to estimate without knowing the exact details.

It is in that spirit I would assert the only guidance investors can rely on are market price signals, or technical analysis. That’s why it’s difficult to predict how the markets are likely to behave under the Trump Administration before he takes office.

My crystal ball is cloudy beyond a few weeks, but I can still take a look at the price response to the news.

 

The full post can be found here.

Europe, alone?

Perhaps it is fitting that this report is being published just before November 11, Remembrance Day, the day commemorating the end of World War I. It was on the 11th hour of the 11th day of the 11th month the guns fell silent. 

Lest we forget the sacrifices of many and the terrible carnage of both World Wars.
 

As a reminder, it was the American-led geopolitical architecture in the wake of World War II, backed by an American nuclear umbrella, which contained the Soviet Union and ensured no major wars erupted after 1945. Now Trump’s America First isolationist policies are dismantling U.S. security guarantees and the possible removal of the nuclear umbrella. How U.S. allies react from the viewpoint of foreign and economic policy will be of enormous consequence for the world for the next generation.
 

A major issue in the current geopolitical environment is the Russo-Ukraine War. As Trump has shown a high degree of antipathy to NATO, Europe is becoming increasingly alone. How the EU reacts to U.S. isolationism and Ukraine will be of utmost importance to the outlook for Europe.

Here are the bull and bear cases.

 

The full post can be found here.

How to trade the post-election melt-up

Mid-week market update: I pointed out on the weekend (see A final update on the Trump Trade: Tail-risk assessment) that the term structure of the VIX had inverted, indicating high levels of market anxiety. The market was hedging for a catastrophic outcome that turned out to be nothing. Today's post-election rally is mainly attributable to a positioning unwind of an over-hedged position. "Bloomberg reported that "Wall Street Quants Set to Buy $50 Billion in Stocks as Volatility Falls".

What's next?

The full post can be found here.

A final update on the Trump Trade: Tail-risk assessment

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

 

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). Subscribers receive real-time alerts of model changes, and a hypothetical trading record of the email alerts is updated weekly here. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 is shown below.

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Bullish (Last changed from “neutral” on 11-Oct-2024)*
• Trading model: Bullish (Last changed from “neutral” on 15-Oct-2024)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

Update schedule: I generally update model readings on my site on weekends. I am also on X/Twitter at @humblestudent. Subscribers receive real-time alerts of trading model changes, and a hypothetical trading record of those email alerts is shown here.

Subscribers can access the latest signal in real time here.

 

A Trump Trade update

Just ahead of the U.S. election, here is an update on the polls and the Trump trade. The polls show a very tight race. As a matter of perspective, here is a sensitivity analysis of what would happen if the polling errors were the same as they were in 2020 and 2022.

My view is that the election has been a referendum on Trump. Trump has always had a base support of about 40% of the electorate. Against that, the Democrats have their base and a coalition of never-Trumper Republicans. Opinions on both sides have been substantially dug in. What really matters in the end is the effectiveness of each side’s “get out the vote” efforts.

 

As a reminder, each of following charts of Trump factors is designed so that a rising line denotes rising favourability for a Trump victory. 

• Trump Media & Technology Group: It’s a proxy for Trump enthusiasm as it’s the holding company for Truth Social, Trump’s social media vehicle.
• Domestic Revenue Stock ETF vs. S&P 500: One of Trump’s main platforms is to use tariffs to bring manufacturing back to the U.S.
• Inflation Expectations: Trump’s tariff policies are expected to be inflationary.
• Poland vs. Euro STOXX 50: Poland has been a surprise growth engine in the EU, but it neighbours Ukraine and the relative performance of its market is a measure of Ukrainian anxiety.
• Gasoline Price: Gasoline can be thought of as an anti-incumbent trade. Rising prices depress consumer sentiment and it’s negative for the incumbent.

Each has its idiosyncrasies. Even though Trump factors have taken a last-minute wobble, the general trend in the Trump trade has been up.

The full post can be found here.

Revisiting the Trump trade

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

 

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). Subscribers receive real-time alerts of model changes, and a hypothetical trading record of the email alerts is updated weekly here. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 is shown below.

 

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Bullish (Last changed from “neutral” on 11-Oct-2024)*
• Trading model: Bullish (Last changed from “neutral” on 15-Oct-2024)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

Update schedule: I generally update model readings on my site on weekends. I am also on X/Twitter at @humblestudent. Subscribers receive real-time alerts of trading model changes, and a hypothetical trading record of those email alerts is shown here.

Subscribers can access the latest signal in real time here.

 

The Trump trade

The Trump trade seems to be making a comeback in the markets. While the betting markets have seen Trump's odds of winning rise and Harris' odds fall, it has been marred by suspicions of manipulation (see articles in WSJ and Financial Times). Less difficult to manipulate are the factors in the financial markets, shown in the chart below. Each of these charts is designed so that a rising line denotes rising favourability for a Trump victory.

• Trump Media & Technology Group: It’s a proxy for Trump enthusiasm as it’s the holding company for Truth Social, Trump’s social media vehicle.
• Domestic Revenue stock ETF vs. S&P 500: One of Trump’s main platforms is to use tariffs to bring manufacturing back to the U.S.
• Inflation Expectations: Trump’s tariff policies are expected to be inflationary.
• Poland vs. Euro STOXX 50: Poland has been a surprise growth engine in the EU, but it neighbours Ukraine, and the relative performance of its market is a measure of Ukrainian anxiety.
• Gasoline Price: Gasoline can be thought of as an anti-incumbent trade. Rising prices depress consumer sentiment and it’s negative for the incumbent.

Each has its idiosyncrasies, but taken as a whole, the Trump trade seems to be winning.
 

 

It’s time to consider the effects of Trump’s economic policies should he win the White House.

A focus on trade policy

The results of the latest BoA Global Fund Manager Survey could be setting the tone for the market’s reaction to the U.S. election. Respondents are most concerned about changes in trade policy as a result of the election.

In that context, it was stunning that Donald Trump, in an interview with Bloomberg editor in chief John Micklethwait, doubled down on his protectionist leanings and characterized “tariff” as “the most beautiful word in the dictionary”.

 

What are the effects of Trump’s economic policies should he win the White House?

The full post can be found here.

What I am and what I am not worried about

Publication notice: I will be starting a two-week holiday this weekend, and here is my planned publication schedule. Weekend publications will be condensed from two publications to one. Barring significant market volatility, there will be no mid-week market update. Regular service will resume after the U.S. election.

 

Mid-week market update:  We are in the heart of Q3 earnings season. Based on the number of companies in the S&P 500, this week is peak earnings reporting week.

But by capitalization, next week will be the peak. Tesla is only Big Tech stock that reports this week.

By its very nature, daily market volatility during earnings season will react to the headline reports of the day. So far, these are the trends that I am worried about, and what I am not worried about.

The full post can be found here.

Some preliminary thoughts on Q3 earnings season

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

 

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). Subscribers receive real-time alerts of model changes, and a hypothetical trading record of the email alerts is updated weekly here. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 is shown below.

 

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Bullish (Last changed from “neutral” on 11-Oct-2024)*
• Trading model: Neutral (Last changed from “bearish” on 19-Sep-2024)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

Update schedule: I generally update model readings on my site on weekends. I am also on X/Twitter at @humblestudent. Subscribers receive real-time alerts of trading model changes, and a hypothetical trading record of those email alerts is shown here.

Subscribers can access the latest signal in real time here.

 

Diversity wins

As the S&P 500 continues to grind upwards, it’s been led by a trio of sectors, financials, industrials and technology, which has becoming an emerging leader. I interpret this as a constructive sign, as the diversity of both value and growth stocks indicate the bull move.

The full post can be found here.

An ominous sign for stock returns?

Goldman Sachs recently reported that the allocation to equities as a percentage of household assets had risen to levels last seen at the height of the NASDAQ Bubble. Is this an ominous sign of a crowded trade? Are investors in a crowded long that stocks are about to enter a painful 2000–2002-style bear market?

 The full post can be found here.

A buy signal. but with a *

Mid-week market update: Further to my last post (see A buy signal setup), the 14-day RSI of the S&P 500 Intermediate Term Breadth Momentum Oscillator (ITBM) flashed a buy signal when it recycled from oversold to neutral. By the book, this is a legitimate buy signal.

Under the current circumstances, I have some doubts and I am putting a * next to the buy signal. Here's why.

The full post can be found here.

A buy signal setup

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

 

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). Subscribers receive real-time alerts of model changes, and a hypothetical trading record of the email alerts is updated weekly here. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 is shown below.

 

   

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Bullish (Last changed from “neutral” on 11-Oct-2024)*
• Trading model: Neutral (Last changed from “bearish” on 19-Sep-2024)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

Update schedule: I generally update model readings on my site on weekends. I am also on X/Twitter at @humblestudent. Subscribers receive real-time alerts of trading model changes, and a hypothetical trading record of those email alerts is shown here.

Subscribers can access the latest signal in real time here.

 

Did you buy Yom Kippur?

The stock market is setting up for a buy signal. The accompanying chart shows the S&P 500 with the usually reliable Intermediate Term Breadth Momentum Oscillator (ITBM). Its 14-day RSI has become oversold. A buy signal is triggered when RSI recycles to neutral.

 
While I am near-term cautious on the stock market, I believe a strong upside breakout is just around the corner. You just have to be patient.

 

The full post can be found here.

Near term volatility ahead, but don't fret

Is the U.S. progress on inflation a case of two steps forward, one step back? Even before the stronger-than-expected September CPI report, bond prices were declining in the wake of the Fed’s jumbo half-point rate cut decision.

The Treasury market is exhibiting signs of anxiety from a technical analyst’s perspective. The 7–10-year Treasury ETF (IEF) has declined to test a key rising trend line. The long Treasury bond ETF (TLT) has already violated its trend line.

While the technical violations may only be temporary false breakdowns, these technical signals compel me to explore their asset return implications.

The full post can be found here.

Survive October

Mid-week market update: Ryan Detrick has been correctly bullish during the rally from late 2023. He recently pointed out that it may be time for the stock market to take a breather, "October higher only once out of six times it was up 30% or more going into Q4 and Q4 below avg returns as well".

 

I am similarly intermediate-term bullish. Though at this point, I am just trying to survive October without any significant drawdowns.

The full post can be found here.

Thinking the unthinkable: Israel-Iran War

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

 

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). Subscribers receive real-time alerts of model changes, and a hypothetical trading record of the email alerts is updated weekly here. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 is shown below.

 

   

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Neutral (Last changed from “bullish” on 26-Jul-2024)*
• Trading model: Neutral (Last changed from “bearish” on 19-Sep-2024)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

Update schedule: I generally update model readings on my site on weekends. I am also on X/Twitter at @humblestudent. Subscribers receive real-time alerts of trading model changes, and a hypothetical trading record of those email alerts is shown here.

Subscribers can access the latest signal in real time here.

 

The drumbeats of war

Oil prices have risen in response to rising tensions in the Middle East, but the year-over-year change is still negative. While war isn’t in our base-case scenario, investing is about pricing risk. I argue that the market is underpricing the risk of a conflict.

 The full post can be found here.

A powerful buy signal, with caveats

There is an adage on Wall Street that investors shouldn’t fight the Fed (or central banks in general), but the devil is in the details. 

Callum Thomas of Topdown Charts that global central banks are engaged in a broad-based easing campaign. The limited sample of the history of such episodes (annotations are mine) show stocks rose on two of the four occasions (blue lines) and fell in the other two (grey lines). This begs the question of whether pivots to widespread rate cuts are equity bullish.

 

My analysis of the latest circumstances is a qualified “yes”, but investors should be aware of the risks.
 

The full post can be found here.

Welcome to October surprise season

Mid-week market update: Stock market price momentum has been strong, but I did warn about possible October surprises in an election year (see S&P 500 breakout or fake-out?). In particular, I highlighted the risks of a port strike and an Israeli incursion into Lebanon, both of which have become reality.

 

Despite plenty of warnings, the share prices of logistics shipping giants FedEx and  UPS didn't react until the strike was announced. A prolonged strike has the potential to devastate the Black Friday and Christmas shopping season and reduce Q4 GDP growth.

Here are some of the other challenges that face the market.

 

The full post can be found here.

The winners and losers from central bank stimulus

Preface: Explaining our market timing models 

We maintain several market timing models, each with differing time horizons. The "Ultimate Market Timing Model" is a long-term market timing model based on the research outlined in our post, Building the ultimate market timing model. This model tends to generate only a handful of signals each decade.

The Trend Asset Allocation Model is an asset allocation model that applies trend-following principles based on the inputs of global stock and commodity prices. This model has a shorter time horizon and tends to turn over about 4-6 times a year. The performance and full details of a model portfolio based on the out-of-sample signals of the Trend Model can be found here.

 

 

My inner trader uses a trading model, which is a blend of price momentum (is the Trend Model becoming more bullish, or bearish?) and overbought/oversold extremes (don't buy if the trend is overbought, and vice versa). Subscribers receive real-time alerts of model changes, and a hypothetical trading record of the email alerts is updated weekly here. The hypothetical trading record of the trading model of the real-time alerts that began in March 2016 is shown below.

   

The latest signals of each model are as follows:

• Ultimate market timing model: Buy equities (Last changed from “sell” on 28-Jul-2023)*
• Trend Model signal: Neutral (Last changed from “bullish” on 26-Jul-2024)*
• Trading model: Neutral (Last changed from “bearish” on 19-Sep-2024)*

* The performance chart and model readings have been delayed by a week out of respect to our paying subscribers.

Update schedule: I generally update model readings on my site on weekends. I am also on X/Twitter at @humblestudent. Subscribers receive real-time alerts of trading model changes, and a hypothetical trading record of those email alerts is shown here.

Subscribers can access the latest signal in real time here.

 

Stimulus!

The market has seen a number of shocks from global central banks. First, the Federal Reserve announced a jumbo half-point rate cut. The bigger surprise was the package of unanticipated stimulus measures from the PBOC. This was followed by a pledge from Beijing to support the economy with fiscal measures.

 

Here is a review of the winners and losers. The biggest winner has been gold, which has benefited from falling real rates. Gold broke out to fresh all-time highs, not only in USD, but also in many other currencies. Most notably, it achieved a new high in Swiss Francs (CHF), which is known to be a hard currency.

 

 

The full post can be found here.