S&P 500 Index trend investing update 07-02-2020

The S&P 500 Index (SPX) going into the close on Thursday (end of trading week), once again the $3,155 price is proving to be serious resistance, as shown on the stock chart below. Today is the 4th time it has tagged $3,155 and failed. The index continues to trade under the benchmark filter of 20% annualized rate of gain over a 200 day average.

Blog comments welcome.

S&P 500 Index (SPX)

Has The Nasdaq 100 Index replaced The Dow 30 Index?

…in terms of where the heavy flow is going, apparently yes. Based on a massive shift in money flow into the Nasdaq 100 (NDX) Index relative to the Dow 30 Index (DJI). We’ll see how long this relationship continues.

We can see depicted in the stock chart below, The Nasdaq 100 Index (NDX) trading at new all time highs today.

Blog comments welcome.

Nasdaq 100 Index (NDX)

Trendanomics Trade Signals report

By Trendanomics Staff
May 31, 2020

The Trade Signals in this report are by way of using our long term trend filter of a 20% annualized rate of growth over a 200 day moving average. This is pure trend investing. No forecasts, no fundamentals, no news.

Blog comments welcome.

  • S&P 500 Index (SPX) crossed from above to below on Dec 24th, trading 5.7% below trend. Signal Bearish.
  • NYSE Fang Index (FANG) crossed from below to above on April 9th, trading 23% above trend. Signal: Bullish.
  • Nasdaq 100 Index (NDX) crossed from below to above on May 5th, trading 7% above trend. Signal: Bullish.
  • Gold (GC) crossed from below to above on April 02nd, trading 7% above trend. Signal: Bullish.
  • Gold Miners Index (GDM) from below to above on April 13th, trading 15.5% above trend. Signal: Bullish.
  • Crude Oil (CL) from above to below on January 8th, trading 305 below trend..

PHLX Semiconductor Index update

The Philadelphia Semiconductor Index (SOX) today has crossed from below to above our long term Trend Investing benchmark. The next major area of resistance is $1,914 shown on the stock chart below. This industry index joins the Nasdaq 100 Index (NDX), The Gold Miners Index (GDM), and several others, in the Long Term Bullish category.

Blog comments welcome.

Semiconductor Index (SOX)

S&P 500 Index Trend Investing update

The S&P 500 Index (SPX) this week is breaking away to the upward side, the consolidation from the April High. The Reversal (support and resistance) area was at $2,957, depicted in the stock chart below. So we’ll look for higher prices in the near term. This is pure Trend investing,.. not a forecast and not a prediction.

S&P 500 Index (SPX)

Trend investing vs. fundamentals – Gold and the US Dollar Index

Like our post last week, here is another, a fundamental rant on Gold. This one deals with the US Dollar. Like all of these types of fundamental articles, they fail to connect the totality of the global flow of capital.

The path to monetary collapse By Alasdair Macleod Goldmoney Insights May 21, 2020 https://www.goldmoney.com/research/goldmoney-insights/the-path-to-monetary-collapse

Once again, this article is tortuously long. It focuses on the fundamental meme of the US Dollar collapse. Busy people do not have the time or energy to read articles like this. Never mind the validity of content of the article. The dollar collapse crowd has been ranting for decades. These rants are fear porn. As if we don’t have enough of fear porn in the mass media at the moment.

The best thing to do, for individuals (and money managers) is to just follow the price action. Filter out all of the rant fear porn articles (and teevee, and tubes and podcasts). One of the fear porn podcasts this AM is droning on and on about Deflation versus Inflation (another fear porn topic going on for decades). They barely mention the price action of Gold. This is almost comical.

To their credit, the Macleod article, does have a chart of Gold with the 50 day and 200 day moving average. We post here a chart of Gold relative to a 50 day and 200 day 20% annualized rate of growth (the bottom indicator). This is a Bullish trend investing trend filter. Almost everything (indexes) else doesn’t come close.

As always, trend investing is not a prediction, and is not a forecast.

Blog comments welcome.

Gold (/gc)

Trend investing vs. fundamentals – Gold and Gold Miners Index

This recent article, reprinted on ZeroHedge, serves as a focal point.

Here’s 5 Reasons Why Gold Miners Have Massive Out performance in the Tank – By Bryce Coward, CFA in Economy, Knowledge Leaders https://www.knowledgeleaderscapital.com/2020/05/15/heres-5-reasons-why-gold-miners-have-massive-outperformance-in-the-tank/

This post departs form our usual news format and goes into as to why fundamental analysis is not only obsolete, but very distractive. From the perspective of individuals trying to make decisions on managing their retirement portfolio. Individuals are faced with looking up into a waterfall of what? .. nonsense?

They make 5 points as to why they like Gold Miners. So, they have the correct posture towards gold miners, which is Bullish, but really muddle the reasoning. They sum the reasons up with five points and associated charts. These points are not only irrelevant, they are very distractive to the price action of gold miners. So we’ll list their 5 points and vastly simplify them.

The article starts with a short mention of history of Colorado mining. Nice stuff, but not needed for DIY (do it yourself) retirement portfolio management (or any portfolio management). Boulder and Denver have long become detached from the original Colorado roots. Some of the small towns over on the western slope are struggling to maintain some thread of their heritage, instead of becoming a Wall Street petting zoo.

The 5 article points are:

  1. United States M2 & 65 Day Rate of Change The problem with this fundamental information, which is sketchy to begin with, is 1) that analysis is obsolete, but, more important, 2. totally unnecessary. No one cares.
  2. Gold Miners vs. Gold Essentially this is the ratio. Totally unnecessary. Again, no one cares.
  3. Gold Miners vs. the S&P 500 Index. The problem is the S&P 500 Index is Bearish. This is like comparing a Porsche vs. a BMW out on a track, and the BMW is broken.
  4. Gold Miners Price vs. EBITDA ratio WTF? No one cares.
  5. Gold Miners Current Ratio Repeat: WTF? No one cares.

These correlations (or non- correlations) do not cause the asset class to do something,
and are distractions from looking at the long term price performance of the asset class. The Fed M2 doesn’t make miners go up or down.

So instead, start with a benchmark of an absolute rate of return over a time segment. Eliminate extraneous noise, such as comparing gold miners to a bearish market (the S&P 500).

Here is Gold Miners Index (GDM) or the Gold Miners Index ETF (GDX) compared to a 20% annualized rate of return over a 200 day average. The GDM is trading 20.4% above the benchmark. The stats are printed in the upper left corner. The Indicator is the bottom panel. Obviously this is Bullish, with no obfuscation from obsolete info from the Fed website. (BTW the Fed is probably the worst forecasting entity in the history of the planet, using their own obsolete information, such as M2, etc).

Gold Miners Index (GDM)

And, the chart of Gold vs. 20 % annualized over 200 days average, Bullish:

And the chart of The S&P 500 index annualized over 200 days average, Bearish.

So all summed up in three charts. no need for The Fed and other extraneous and superfluous and obsolete information.

Why torture ourselves?

Comments welcome.