Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
Gold Bull Market Ultimate Upside Target - 17th Sep 19
Gold Spikes on the Saudi Oil Attacks: Can It Last? - 17th Sep 19
Stock Market VIX To Begin A New Uptrend and What it Means - 17th Sep 19
Philippines, China and US: Joint Exploration Vs Rearmament and Nuclear Weapons - 17th Sep 19
What Are The Real Upside Targets For Crude Oil Price Post Drone Attack? - 17th Sep 19
Curse of Technology Weapons - 17th Sep 19
Media Hypes Recession Whilst Trump Proposes a Tax on Savings - 17th Sep 19
Understanding Ways To Stretch Your Investments Further - 17th Sep 19
Trading Natural Gas As The Season Changes - 16th Sep 19
Cameco Crash, Uranium Sector Won’t Catch a break - 16th Sep 19
These Indicators Point to an Early 2020 Economic Downturn - 16th Sep 19
Gold When Global Insanity Prevails - 16th Sep 19
Stock Market Looking Toppy - 16th Sep 19
Is the Stocks Bull Market Nearing an End? - 16th Sep 19
US Stock Market Indexes Continue to Rally Within A Defined Range - 16th Sep 19
What If Gold Is NOT In A New Bull Market? - 16th Sep 19
A History Lesson For Pundits Who Don’t Believe Stocks Are Overvalued - 16th Sep 19
The Disconnect Between Millennials and Real Estate - 16th Sep 19
Tech Giants Will Crash in the Next Stock Market Downturn - 15th Sep 19
Will Draghi’s Swan Song Revive the Eurozone? And Gold? - 15th Sep 19
The Race to Depreciate Fiat Currencies Is Accelerating - 15th Sep 19
Can Crypto casino beat Hybrid casino - 15th Sep 19
British Pound GBP vs Brexit Chaos Timeline - 14th Sep 19
Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - 14th Sep 19
War Gaming the US-China Trade War - 14th Sep 19
Buying a Budgie, Parakeet for the First Time from a Pet Shop - Jollyes UK - 14th Sep 19
Crude Oil Price Setting Up For A Downside Price Rotation - 13th Sep 19
A “Looming” Recession Is a Gold Golden Opportunity - 13th Sep 19
Is 2019 Similar to 2007? What Does It Mean For Gold? - 13th Sep 19
How Did the Philippines Establish Itself as a World Leader in Call Centre Outsourcing? - 13th Sep 19
UK General Election Forecast 2019 - Betting Market Odds - 13th Sep 19
Energy Sector Reaches Key Low Point – Start Looking For The Next Move - 13th Sep 19
Weakening Shale Productivity "VERY Bullish" For Oil Prices - 13th Sep 19
Stock Market Dow to 38,000 by 2022 - 13th Sep 19 - readtheticker
Gold under NIRP? | Negative Interest Rates vs Bullion - 12th Sep 19
Land Rover Discovery Sport Brake Pads and Discs's Replace, Dealer Check and Cost - 12th Sep 19
Stock Market Crash Black Swan Event Set Up Sept 12th? - 12th Sep 19
Increased Pension Liabilities During the Coming Stock Market Crash - 12th Sep 19
Gold at Support: the Upcoming Move - 12th Sep 19
Precious Metals, US Dollar, Stocks – How It All Relates – Part II - 12th Sep 19
Boris Johnson's "Do or Die, Dead in a Ditch" Brexit Strategy - 11th Sep 19
Precious Metals, US Dollar: How It All Relates – Part I - 11th Sep 19
Bank of England’s Carney Delivers Dollar Shocker at Jackson Hole meeting - 11th Sep 19
Gold and Silver Wounded Animals, Indeed - 11th Sep 19
Boris Johnson a Crippled Prime Minister - 11th Sep 19
Gold Significant Correction Has Started - 11th Sep 19
Reasons To Follow Experienced Traders In Automated Trading - 11th Sep 19
Silver's Sharp Reaction Back - 11th Sep 19
2020 Will Be the Most Volatile Market Year in History - 11th Sep 19
Westminister BrExit Extreme Chaos Puts Britain into a Pre-Civil War State - 10th Sep 19
Gold to Correct as Stocks Rally - 10th Sep 19
Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - 10th Sep 19
Stock Market Sector Rotation Giving Mixed Signals About The Future - 10th Sep 19
The Online Gaming Industry is Going Up - 10th Sep 19

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Key Trends for Trading Markets 2018: This Will be a “Gold”en year

Stock-Markets / Financial Markets 2018 Jan 26, 2018 - 04:56 AM GMT

By: Submissions

Stock-Markets

Abalgorithm: Inflation around the world is starting to pick up. Only a matter of time before policy makers will start to get nervous. All the bond market money is about to pour into commodities and stocks. Gold is pushing the envelope. Charts below.



While higher inflation might, in the short run, be positive for record-breaking stock markets — with wage pressures still modest, greater pricing power for companies should juice profit margins — ultimately it poses a threat to earnings if wage rises become broad based.


Core US inflation — which excludes food and energy — stands at 1.8 per cent, below the Fed’s 2 per cent target, and the eurozone’s core inflation rate remains lower still at 0.9 per cent. Real yields, calculated by subtracting inflation expectations from Treasury yields, remain dormant. That means despite inflation beginning to tick upward, financial conditions remain more or less unchanged. Money is staring to move into assets which can protect against inflation, EPFR shows above.

Given the trend to inflation, we believe this is the year for Gold and other commodities.


GOLD IS BREAKING OUT. GO LONG AT 1360 IS OUR CALL AND DO NOT GET OUT TILL PRICES CLOSE UNDER 100 DMA. HENCE REMAIN LONG TILL FURTHER UPDATE

GOLD weekly is above last week highs and is above 2017 highs. The essentials for a breakout are now satisfied. Prices are touching the 2 SD of the 20 MA of the weekly. The fact its nowhere near the 3 SD gives us comfort that it is not overbought

Bond Market Crash starting
One of the key reason for commodities to rise in 2018 is the money pouring out of bond markets. Yields on Germany 10 year are now breaking out to multi week highs. See below.


The Germany 10 yield is now above 0.61%. The breakout need to be carefully observed for followup moves.


The German 10 y minus the UST 10 Year yield is picking off the lows. This is often relevant for EURUSD trading. However EURUSD has already hit 1.25 and is expected to range trade in a 300 pip range.


The Dow Jones commodity index confirms what we know and we have been suggesting to clients. Be long commodities with Gold having the highest weightage. The index is at new highs.

F-indicator
abalgorithm uses the Fundamental F Indicator to find the strength of an economy.

The F Indicator has been rising all thru 2017. The EU economy is moving north and growing much faster and better than a year years before. While earlier it was Germany that was leading the pack, but all countries are now doing well within the EU market.


The F- Indicator for GBP is falling. The UK economy has been worsening. The latest jobs data show further slide in employement. However average earning was at 2.5% which was meeting expectation. This is an indication of higher inflation and lack luster job less growth.


The F Indicator for New zealand economy is worseing with no sign of improvement. However the New Zealand being a commodity economy will pick up this year as dairy prices will rebound in keeping with money flodding into commodities.


The SPY index is at new highs. There is no respite and consolidation.


The SPX has been rising above due to the insatiable hunger for junk yield. Money that is flowing into SPX is chasing higher and higher yield. The Fidelity high income fund is composed of high yield and high risk instruments. Investors has been chasing it and just explains the internal nature of the current market rise. We do not need to tell you how this will end. Last time there was a chase for yield was in 2007 and then the 2008 crash happened. Keep a watch on this...It is a leading indicator.

About Us
abalgorithm.com is a quant based research and trading firm. We operate a high performance FX trade copier service which uses Machine Learning as its core. You can check the results here: TRADE COPIER 3 MONTHS REPORT: +53%
More performance reports
In addition, we operate a LIVE TRADE ROOM along with daily indepth research and manual trade calls. Clients and guests can have a lively discussion of the state of the world economy and trading opportunities.

To join our trade copier: Fill the form

About Abalgorithm.com
Abalgorithm operates an automated quant forex trade copier and a live trade room for clients who trade forex. We also provide daily research on equities, bonds, ETF, commodities. We are located at http://abalgorithm.com

© 2018 Copyright Abalgorithm - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules