Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21
Stock Maket Trading Lesson - How to REALLY Trade Markets - 26th Nov 21
SILVER Price Trend Analysis - 26th Nov 21
Federal Reserve Asks Americans to Eat Soy “Meat” for Thanksgiving - 26th Nov 21
Is the S&P 500 Topping or Just Consolidating? - 26th Nov 21
Is a Bigger Drop in Gold Price Just Around the Corner? - 26th Nov 21
Financial Stocks ETF Sector XLF Pullback Sets Up A New $43.60 Upside Target - 26th Nov 21
A Couple of Things to Think About Before Buying Shares - 25th Nov 21
UK Best Fixed Rate Tariff Deal is to NOT FIX Gas and Electric Energy Tariffs During Winter 2021-22 - 25th Nov 21
Stock Market Begins it's Year End Seasonal Santa Rally - 24th Nov 21
How Silver Can Conquer $50+ in 2022 - 24th Nov 21
Stock Market Betting on Hawkish Fed - 24th Nov 21
Stock Market Elliott Wave Trend Forecast - 24th Nov 21
Your once-a-year All-Access Financial Markets Analysis Pass - 24th Nov 21
Did Zillow’s $300 million flop prove me wrong? - 24th Nov 21
Now Malaysian Drivers Renew Their Kurnia Car Insurance Online With - 24th Nov 21
Gold / Silver Ratio - 23rd Nov 21
Stock Market Sentiment Speaks: Can We Get To 5500SPX In 2022? But 4440SPX Comes First - 23rd Nov 21
A Month-to-month breakdown of how Much Money Individuals are Spending on Stocks - 23rd Nov 21
S&P 500: Rallying Tech Stocks vs. Plummeting Oil Stocks - 23rd Nov 21
Like the Latest Bond Flick, the US Dollar Has No Time to Die - 23rd Nov 21
Cannabis ETF MJ Basing & Volatility Patterns - 22nd Nov 21
The Most Important Lesson Learned from this COVID Pandemic - 22nd Nov 21
Dow Stock Market Trend Analysis - 22nd Nov 21
UK Covid-19 Booster Jabs Moderna, Pfizer Are They Worth the Risk of Side effects, Illness? - 22nd Nov 21
US Dollar vs Yields vs Stock Market Trends - 20th Nov 21
Inflation Risk: Milton Friedman Would Buy Gold Right Now - 20th Nov 21
How to Determine if It’s Time for You to Outsource Your Packaging Requirements to a Contract Packer - 20th Nov 21
2 easy ways to play Facebook’s Metaverse Spending Spree - 20th Nov 21
Stock Market Margin Debt WARNING! - 19th Nov 21
Gold Mid-Tier Stocks Q3’21 Fundamentals - 19th Nov 21
Protect Your Wealth From PERMANENT Transitory Inflation - 19th Nov 21
Investors Expect High Inflation. Golden Inquisition Ahead? - 19th Nov 21
Will the Senate Confirm a Marxist to Oversee the U.S. Currency System? - 19th Nov 21
When Even Stock Market Bears Act Bullishly (What It May Mean) - 19th Nov 21
Chinese People do NOT Eat Dogs Newspeak - 18th Nov 21
CHINOBLE! Evergrande Reality Exposes China Fiction! - 18th Nov 21
Kondratieff Full-Season Stock Market Sector Rotation - 18th Nov 21
What Stock Market Trends Will Drive Through To 2022? - 18th Nov 21
How to Jump Start Your Motherboard Without a Power Button With Just a Screwdriver - 18th Nov 21
Bitcoin & Ethereum 2021 Trend - 18th Nov 21
FREE TRADE How to Get 2 FREE SHARES Fractional Investing Platform and ISA Specs - 18th Nov 21
Inflation Ain’t Transitory – But the Fed’s Credibility Is - 18th Nov 21
The real reason Facebook just went “all in” on the metaverse - 18th Nov 21
Biden Signs a Bill to Revive Infrastructure… and Gold! - 18th Nov 21
Silver vs US Dollar - 17th Nov 21
Silver Supply and Demand Balance - 17th Nov 21
Sentiment Speaks: This Stock Market Makes Absolutely No Sense - 17th Nov 21
Biden Spending to Build Back Stagflation - 17th Nov 21
Meshing Cryptocurrency Wealth Generation With Global Fiat Money Demise - 17th Nov 21
Dow Stock Market Trend Forecast Into Mid 2022 - 16th Nov 21
Stock Market Minor Cycle Correcting - 16th Nov 21
The INFLATION MEGA-TREND - Ripples of Deflation on an Ocean of Inflation! - 16th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

What Is The Next Big Move In The Markets?

Stock-Markets / Financial Markets 2015 Jun 16, 2015 - 05:52 AM GMT

By: GoldSilverWorlds


Markets typically move in waves. For secular investors, the long waves with a duration of 6 months to 6 years are important. However, the 3 to 6 months waves convey information about the secular strength, and that is why we focus on the multi-month trends.

We believe that markets today are preparing for new trends. We rely on intermarket chart analysis to assess the highest probability moves, because intermarket dynamics sow the seeds for market specific trends.

Consider the key stock markets in the world. In the first chart set we look at the U.S. stock market (with the S&P 500 as proxy for U.S. stocks), European stocks (the Euro Stoxx 600 as proxy for Europe), emerging market stocks and China. The trending moves (up or down) are highlighted with a blue frame. We will discuss the green ovals later.

Stocks in the U.S. trended in 2013 and 2014. Since December last year, however, U.S. stocks have moved sideways. Stocks in Europe had a strong trend higher when QE was announced by the ECB but that rally stalled in April. Emerging markets saw a strong move lower in Q2 2013 and a sharp rally mid-2014. Overall, however, emerging markets are going nowhere. China is clearly the market with the strongest current trend. The rally has been ongoing for 9 months.


Commodities show a totally different picture. We have selected the key segments, softs (cotton, coffee, sugar, etc), grains (wheat, corn, soybeans, etc), base metals and uranium. We excluded oil and natural gas as their trend between last summer and Q1 2015 is so well-known. Gold is not in the charts above but in the currency selection below.


The strongest trends in commodities in the last 2.5 years took place in 2014, starting in April 2014 with softs and uranium, followed by grains and later by base metals.

Currencies have stabilized, after the monstrous rally of the U.S. dollar which started in August last year. Before and after the dollar rally, currencies had been trading mostly sideways, except for the Yen which almost collapsed at the end of 2012. Gold has moved sideways for 2 years, with short term rallies and corrections as indicated on the chart at the right.


The U.S. dollar rally and oil price collapse were the big stories of the second half of 2014 and Q1 2015. Interest rates, however, have been the strongest movers since then. The next chart shows the 10 year yield in the U.S. (left) and Germany (right), the key market in Europe. Interest rates are trending higher, which means that the market is anticipating an interest rate hike by the central bank(s).


So far, the increase in yields has resulted in a limited number of intermarket moves.Yield-sensitive stocks, such as utilities in the U.S., have corrected, which means they fell at least 10%. As a result, the broader stock indexes in the U.S. and Europe remain flat.

Commodities have not been moved by rising interest rates, probably for two reasons: first, with the absence of strong inflation expectations real rates are more or less stable (remember that commodities are inflation-sensitive), and second because of the already strong downtrend in most commodities in previous years (markets do not trend endlessly in one direction).

The different charts and intermarket dynamics show that a couple of strong trending moves take place each year, typically in a 3 to 6 month period. This year we have seen a strong move in yields and in Chinese stocks, apart from some insignificant rallies. We have highlighted the 2015 trends and rallies with the green ovals.

We believe this means strong moves are expected in the second half of 2015! But which markets?

That is the trillion dollar question. We see three scenarios.

First, there is a high probability that U.S. stocks are about to correct. They need a break after a strong 2-year move, appear toppy, and they also lack power. Moreover, the volatility index VIX is forming a descending triangle chart pattern.  If volatility breaks out of this pattern we expect a correction in stocks.


Second, a stable commodity market seems likely, although commodities could see some snapback rallies. Given the sharp correction in most commodity segments in previous years, we do not anticipate stronger corrections. On the other hand, if inflation expectations increase, a sustained move higher is likely.

Third, a continuation of rising interest rates will take place if the U.S. Fed hikes rates, which it will  if inflation increases. Remember the 2% inflation target? There is only a 0.3% inflation rate in the U.S. while Europe stands at a status quo. If central banks raise rates, it will take place in an inflationary environment, which is friendly to commodities, precious metals and stocks.

Gold is entering its strongest season. The months of July and August typically bring a short term rally in the precious metals complex. We will gauge the strength of any short term rally to evaluate its secular trend.

Precious metals miners should lead the metals, both higher and lower, as the miners are at a critical point, shown by the miners to gold ratio (see next chart). The precious metals complex is trading at long term structural support as miners have led the metals lower since 2011.


Typically, in the last several years, shorter term trends have lasted about 9 months. The next BIG move in miners and metals is about to take place. We will be assessing the strength of the summer rally, which will be indicative for the precious metals complex in 2015 and 2016.

Smart investors do not anticipate a particular  move, they prepare themselves for what is likely to happen. That is why the information on the precious metals miners in our Gold & Silver Report will enable you to ride the next trend.

The June edition of the Gold & Silver Report will contain 3 buy tips on excellent companies for the portfolio of secular investors once a sustained rally in precious metals begins: one junior silver miner, one mid-tier gold miner, one junior gold miner. These companies were selected based on interviews with CEO’s of those companies, among other criteria, performed during a recent trip of the analyst team to Canada.

Secular Investor offers a fresh look at investing. We analyze long lasting cycles, coupled with a collection of strategic investments and concrete tips for different types of assets. The methods and strategies are transformed into the Gold & Silver Report and the Commodity Report.
Follow us on Facebook ;@SecularInvestor [NEW] and Twitter ;@SecularInvest

Source -

© 2015 Copyright goldsilverworlds - 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 - 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