Trend and Value

3 minutes after I tell @realDonaldTrump and a few of his supporters to fuck off

2017-04-06T21:08:00.000-05:00

I have been an explicit pro-Trump guy for over a year, but this Syria shit cannot stand.

my note to the President Elect

2016-11-15T20:00:00.003-06:00

the Boss DJ ain't nothin' but a man

2016-08-05T23:18:00.000-05:00

to my man Trump, I hope you get your groove back soon.

Trump Campaign Song

2016-02-12T21:57:00.001-06:00

Clinton Campaign Song

2016-02-10T22:56:00.002-06:00

S&P Goldman Sachs Commodity Index - Total Return ($GTX)

2016-02-02T19:24:00.000-06:00

the commodities-as-an-investment ("alternative" "asset" "class") bubble has fully deflated (or will have soon). this chart is the perfect, textbook example of a full-cycle Elliot-Wave chart. I don't need to annotate it with numbers and letters, do I?

(click to view full size)

I know this blog has, over the years, been sparse and unhelpful (at best), but I am working on some really interesting stuff, both at my employer and independently. if you are interested in what's in the works, drop me a line. (accredited investors only please, thanks in advance.)

Gov. Bush

2015-12-15T19:57:00.001-06:00

During the debates I always go to the bathroom when JEB is up.

Climate Change Warrior

2015-12-06T11:38:00.001-06:00

source

For the Record:

2015-04-02T19:18:00.001-05:00

Trend & Value does not provide wedding services of any type.

"ISIS is Fake"

2015-01-17T19:08:00.000-06:00

so my girlfriend works as a substitute teacher in an undisclosed region. last week a sixth grade boy asked her repeatedly if he could make a speech in front of the class on how "ISIS is fake." she said no, we don't have time for that.

perhaps not as awkward as the day before when a girl asked her what pronoun to assign to transgender folk. (she recommended to ask she/he what they prefer.)

the chain of coincidence

2014-10-17T00:06:00.003-05:00

some inquiring North Dakotans wonder if the recent slide in oil prices isn't contrived to clear our man-camps of roughnecks in order to convert the facilities to Ebola quarantines.

ISIS FAQ

2014-09-22T19:23:00.000-05:00

Where are you located?

ISIS' headquarters is located in Sierra Vista, Arizona, with a satellite location in downtown Washignton, D.C. Currently, ISIS employs personnel in Arizona, Washington D.C., Colorado, Texas, Oklahoma, Georgia, Iraq, Afghanistan, Qatar and Kuwait, with plans for growth in the immediate future.

S&P 500 Total Return Index / Gold Ratio ($SPXTR:$GOLD)

2014-08-02T15:22:00.001-05:00

the recent high in this ratio closely matched the geometric mean of the 1999 top and the 2011 bottom of 2.771 (actual high was 2.821).

so that is a 50 per cent retracement on a logarithmic scale.

I also see some similarity in the chart pattern over the last year and a half and the topping pattern from 1997 to 2000. obviously the time frame and magnitudes are different, but structurally they look similar.

I've received a handful of emails this year asking me for my outlook on the stock market. I try to point out that I haven't made an accurate call on stocks since the Fall of 2011, so I'm not sure why anyone would take anything I say regarding the broader market seriously. but, still, I've had a numerological target in mind for some time: 2004 on the $SPX. recent highs have come to within less than a per cent of that number, so the recent weakness doesn't surprise me. but a retest or even minor new highs wouldn't surprise me either. plus, what I am looking for at this point is a sizable correction, not necessarily the advent of a full-on bear market. that remains to be seen.

title

2014-06-19T19:57:00.001-05:00

ok like a 5 per cent move for gold stocks today, seems to have everyone excited. so for all you clamoring for an update on the PM complex charts:

so I bought some bottoms the last few months, got the entire account in FSAGX, overall cost basis of 19.51. don't have a clue what's next, but I'd sure like to keep moving the next couple months, didn't figure I'd have to continue updating this trade and fucking charts this long as it is. I'll let you know when we start selling.

random poem generator

2014-05-06T22:05:00.000-05:00

he's too lazy

to be abusive

she's gone crazy

and so allusive

PMC charts update

2014-03-26T20:21:00.000-05:00

here I am just going to update some of the precious metals complex charts we've introduced over the past months.

so the PMC weighted index has indeed fallen back to the former neckline we highlighted. however, prior to the current retracement, it popped above that old shoulder resistance. so now I'm in the position of seeing a downside target met, but one that had been contingent on a resistance target that didn't hold. what to do? well, I already did it, before even updating this chart this evening: I bought more FSAGX -- a lot yesterday and another lot today. So now the account is 80 per cent invested in gold mining stocks.

here's an update on the PMC WI CROC*

the CROC had flirted above the neutral line for a bit there, but has since fallen back below the previous resistance. that's ok with me; it just that sentiment in the complex has backed off. I look for the upward trend line to hold.

the major area of concern should be the rapid deterioration of the PMC ratio index:

this has fallen all the way back to December levels. something like a 70 per cent retracement of the rally. that's alright, the recent fall has a capitulatory look to it. that kind of decline often transitions into a 'V' shaped rally. I'm sinking into subjective visual 'analysis' here, but I don't apologize.

so yeah, I've bought more gold stocks, might buy a little more, depending. the complex isn't behaving particularly badly in my mind -- it raced up quite fast and now stepping back. I'll get concerned if silver hits a new low and/or our ratio index does.

*Consolidated Rate of Change

John Denver International Airport

2014-03-13T20:48:00.001-05:00

as we are flying through Denver tomorrow, I joked to Lisa that they should name the airport "John Denver International Airport", after he passes away of course. Lisa's like, I think he's already dead, didn't he die in a plane crash?

Precious Metals Complex charts

2014-03-01T19:52:00.002-06:00

the metals complex had quite a thrust higher since we last looked. Here's a chart of the PMC Weighted Index:

(the weighted index is similar to the PMC Index I introduced last year, but instead of being equal parts GLD, GDX, SLV, it consists of three parts GLD, two parts GDX, two parts SLV, and one part GDXJ.)

it is interesting how we appear to have met resistance right at the level of the two shoulders during the previous bearish sequence. Perhaps the complex will find support near the former neckline? don't know, aside from my initial entry in early December I haven't done very well micro-managing this trade, so I better just go about my business. however, I will buy more FSAGX if this complex chart retraces to that old neckline.

here's an update on that PMC ratio chart I posted a few weeks ago:

not that I was paying attention at the time, but at the height of the recent rally you'll note the divergence on the ratio chart compared to the weighted index up top. I am not swing trading these markets, so minor tells like that don't concern me much, but for those who are trading more actively, little indications like that can prove quite valuable. (or they can screw everything up if you don't know what yer doing.)

and now for my favorite chart, a combination of the weighted index and the ratio index (it's just the geometric mean of the two series):

Breadthalyzer + chart

2014-02-16T18:47:00.001-06:00

Precious Metals Complex Ratio Index

2014-02-08T11:32:00.000-06:00

allow me to introduce an additional indicator used to track the health of the precious metals complex: the PMC Ratio Index.

it's simple really, I just combined into a single series the three ratios that Everyone uses to analyze the metals:

SLV:GLD (the ratio of silver to gold)

GDX:GLD (the ratio of gold stocks to gold)

GDXJ:GDX (the ratio of junior golds to major gold stocks)

it is generally agreed that the stronger each of these ratios, the more favorable the outlook for the precious metals complex as a whole. but often each of these ratios, when viewed separately, will lead to conflicting outlooks. and that's fine for analysts who enjoy reconciling the divergences with nuanced interpretations. but I don't have time for so much confusion anymore. I'd prefer to look at a consolidated picture from the start and reserve the underlying components for the occasional indulgence.

but how does one combine three such ratios into a single series? just take an average of the three? yes... but.. a regular arithmetic average won't produce anything very useful. sure you could rebase each one to 1 or 100 at common point in the past and then average them out, but eventually your combined series will get so distorted that it becomes useless. no, the best and most truthful way of averaging non-commensurable series is by using the geometric mean (=GEOMEAN in excel)*.

so with that explanation of method out of the way here's a chart of the PMC Ratio Index going back a few months:

looking back, that handle that formed in December proved to be a positive indication, especially since it formed as the underlying ETFs were testing or hitting new lows. since then the index developed into a defined (albeit broad) uptrend.

In the next post we will compare this ratio index to the PMC ETF Index.

*incidentally, geomean is the only valid way to average a group of ratios. unfortunately this fact isn't widely known among market analysts and amateur statisticians, often leading to embarrassing (if comical) errors.

Precious Metals Complex -- Consolidated Rate of Change (351)

2014-01-28T21:29:00.002-06:00

a retrace would be nice before we break the blue neckline. maybe we'll get that retrace then break the blue neckline and the downtrend line concurrently. that'd be way cool. beyond that, moving above the neutral line will indicate that this is all something more than a fool's errand.

precious metals complex -- still in play

2014-01-25T12:13:00.000-06:00

the precious metals complex has shown some signs of life since the updates I provided in early December. While I did initiate the buying program laid out for FSAGX (the Fidelity gold fund), so far I've only managed to allocate 60% of the portfolio into the fund. the remainder is still in cash. a couple purchases were made right about the lows but over-cautiousness and/or professional distractions prevented me from pulling the trigger enough times when the fund lingered below 18. a few more buys I made after mining stocks entered their rally this month. in any case, I'm happy with the cost basis of the position we have so far, but hesitant to add more in the absence of a consolidation.

furthermore, I haven't completely dismissed the possibility of gold itself making a final plunge to that long-standing target of 1145. perhaps the opportunity passed when the spot price held 1180 over the holidays, but it would be premature to assume that gold has fully escaped its downtrend.

such a pretty channel, no? we'll find out soon enough, but a single candle peeking above a trendline doesn't confirm a breakout.

silver, even though it showed so much courage last month amid gold's weakness, remains well within its downtrend channel.

but on the bright side, mining stocks have seen motivated buying, with the HUI more definitively breaching its corresponding channel.

while it's a positive development, we shouldn't get too excited about a violation of a simple trendline. nevertheless, even if the complex takes another hit, I would expect HUI to hold at least the 200 level.

to wrap up, I am positive on precious metals and encouraged by the price action the last several weeks. if prices drop from here I'll add to the mining stocks position, but since we have a decent amount already, continued appreciation won't bother me at all.

Correlation of gold stocks and gold bullion price movements

2013-12-08T13:59:00.000-06:00

gold mining stocks and gold itself tend to rise and fall together. everyone knows this. in fact there have only been two periods in the last 20 years when the 21-week correlation coefficient of gold stocks and gold went negative.

but my how important did these periods prove to be! the early-2001 drop signaled the massive bull market in precious metals, while the negative correlation in mid-2011 coincided with the great reversal we continue to endure.

even though I anticipate a very tradeable rally in metals any time, the complete lack of a waning (let alone negative) correlation right now gives me another reason to remain skeptical that we are on the verge of a primary turn of trend in the precious metals complex.

Gold -- multi-year trendline

2013-12-08T12:52:00.000-06:00

since I hardly ever look at linear charts, I almost didn't notice this. gold's primary trendline here approaches $1200/oz which coincides well with my prospective low of $1145. (my target is based on intraday extremes while the chart above uses the five-day moving average of closing prices -- hence the apparent discrepancy.)

I assume many other observers have been highlighting the same trendline recently, but I have no idea who even blogs or whatever about metals anymore.

the line itself is fairly interesting in that it has gold's baseline appreciation rising at about $100 per year.

edit: here's an arguably more important long-term trendline on the log chart:

that line ascends at a rate of about 12.5 per cent a year.

Moving into Mining Stocks

2013-12-05T22:28:00.000-06:00

we (okay, I) continue to monitor the chart highlighted in the previous post. the Precious Metals Complex has indeed dropped below 36, as anticipated.

yet spot gold remains at least $75 above the $1145 target while silver declines to show any relative strength. so even if they haven't yet been invalidated, the parameters aren't quite aligning as neatly as hoped. but how creepy would it have been if they did? markets sometimes develop according to one's precise whim, but such ego stimulations prove brief. at a major turn I'd prefer the pocketbook to inflate.

so from here we are moving from a cash position into gold stocks (buying FSAGX). space it out into five or 10 purchases until fully invested. try to buy on down days.

if this develops too far beyond last month's parameters we'll look for an exit, but for now I think we are on the right track.