Comments on: So Is It Risk-on or Risk-off?

By: manookhan

manookhan — Tue, 20 Aug 2019 15:51:51 +0000

Don’t see the indexes making any big moves before Jay Powell’s opening remarks at Jackson Hole

By: bryrune

bryrune — Tue, 20 Aug 2019 15:26:48 +0000

I’m also noticing a slight dip in the dollar and a down dollar usually lifts oil prices but it’s not, again just noticing that inverse patterns don’t seem to be working right now and wondering if that is a pattern itself.

By: bryrune

bryrune — Tue, 20 Aug 2019 15:23:21 +0000

I am watching /NQ grind sideways no gap up or down just grinding between 7740.36 and 7700. It is very odd that gold, treasuries, and stocks are all edging higher at the same time, I am thankful for the quick and useful analysis as I would be pulling my hair out as nothing seems to be following it’s usual patterns. Has anyone else noticed that oil and wheat are lower, and could there be anything to that?

By: rsotc

rsotc — Tue, 20 Aug 2019 13:47:11 +0000

In reply to rsotc. Fixed it. I had only had to update the chart of /GC as I had stated the scenario correctly on /ZB (T-bonds). I had accidentally inverted the likely outcome for gold based on either the bullish & bearish stock market scenarios & then I changed the color of the text to red & green to match the scenario arrows afterward. Fixed now, sorry for the confusion.

By: rsotc

rsotc — Tue, 20 Aug 2019 13:40:49 +0000

In reply to rsotc.

Oh wow. Now that I look at my charts wondering why you asked for clarification, I can see that I incorrectly listed the scenarios on both gold & Treasuries depend on what the stock market does. I stated the scenarios correctly in the first paragraph (“I’m leaning towards the bullish (green) scenario, which would most likely entail the stock market reversing & moving lower soon”) but had a chart dyslexia moment when I was adding the scenarios to those charts of /GC & /ZB.

Glad you ask the question as I now see the confusion. I’ll correct the typos on those charts asap. Thanks.

By: rsotc

rsotc — Tue, 20 Aug 2019 13:35:02 +0000

In reply to rsotc. @Roberts_Matthews is correct, I had just glanced your question & assumed that you meant gold goes down (not up) if the stock market goes up & vice versa. My preferred scenarios on the charts above were: Stocks down, gold & Treasuries up.

By: rsotc

rsotc — Tue, 20 Aug 2019 13:31:46 +0000

Yes, typically (although not always) gold will rise when the stock market is falling as gold and US Treasury bonds are the two primary “flight-to-safety” assets. As such, if the stock market continues to rally much above yesterday’s highs, we would likely see gold move lower as the market returns to a “risk-on” environment that favors risky assets like stocks over safe-havens such as gold & gov’t bonds.

The title of this post was pointing out the fact that both gold & Treasuries haven’t sold off as much as I would have expected during the recent fairly strong rally in the stock market, especially considering the technical posture of Treasuries & gold, both of which recently put in some pretty clear & solid negative divergences on the 60-minute charts while overbought on the longer-term charts. That indicates to me that the smart money (i.e.- institutional investors) and maybe even a good percentage of the dumb money (retail investors) are not buying into the recent rally & are still putting money into, or at least not pulling out of, the safe-haven assets such as gold & T-bonds.

By: Robert_Matthews

Robert_Matthews — Tue, 20 Aug 2019 13:27:15 +0000

In reply to kfbfnet. Opposite. Gold up when market down and vice versa

By: kfbfnet

kfbfnet — Tue, 20 Aug 2019 13:21:22 +0000

Randy,

re: your /GC analysis above. Am i reading it right. Gold goes up if the stock market goes UP and down if it sells off. I would have thought the reverse