Friday, 14 April 2017

Gold jumps over $1250 and $1264 resistances to land around $1280

Gold jumped over $1250 and $1264 resistances to land around $1280, back in the black pitchfork and therefore back into the initial uptrend channel of the potential new bull market:


$1145 target still in play despite bullish move in gold.

In my previous gold analysis, I proposed bullish and bearish targets:

Bearish potential target: $1145 at bottom line of blue pitchfork.
Bullish potential target: $1250 to resistance at bottom line of black pitchfork.

After hitting resistance at $1250 it looked possible that gold would resume its way down towards $1145. However gold has now popped above $250 and also above the $1264 resistance shown on the second chart to land near $1280, inside the black fork (3rd chart).






CPI inflation forecasts for March and April 2017

Here are my inflation model forecasts for March and April USA CPI:
The weakest model is Oil9. The others are quite consistent, using current oil and gasoline price action combined with EIA forecasts for oil and gasoline:

Month Oil8 OIl9 Oil10 Gasol11 Gasol12 CPI BLS actual
Feb'17 2.80 2.75 2.76 2.78 2.81 2.7
Mar'17 2.62 2.29 2.90 2.46 2.51 TBA
Apr'17 2.28 2.12 2.40 2.33 2.38 TBA

March CPI is to be announced any minute now.

US CPI Inflation forecasts for Mar and April 2017. Recorded 13 Apr 2017. These geometric and polynomial forecasts give lower inflation figures than purely linear (striaght line formula forecasts and match Feb's inflaiton well (2.7-2.8% against actual published 2.7%). They indicate figures of 2.5-2.9% for March and 2.3-2.4% for April, except for one outlier.
Linear forecasts for Feb and Mar were around 3.1-3.2 and 3.3-3.5 approx). I have modeified the models therefore to geometric models especially in the light of the bureau of Labor Statistics' US  Consumer Price Index inflation figures using geometric weightings for almost all of its components.

Video here explaining models with charts:
https://www.youtube.com/watch?v=dd5SeKGaX8M

Website:
https://www.patreon.com/bellamyresearch





Thursday, 23 March 2017

My first geometric oil models for forecasting US CPI in 2017.

I have a new geometric oil model (well, 3 variants, models 8, 9 & 10) that have come up with slightly lower inflation figures than I had forecast before. I was looking into the possible uncertainties in the regression line analysis that undelies the models and there is some, due to the scatter in the data. Anyway, the best estimates are now shown on the following chart until July 2017:

This incorporates oil price data to February 2017 and also EIA forecast prices for the months up until July 2017.

I am now looking at models based on retail and wholesale gasoline prices (including current price action and EIA forecasts)

Also, the two videos are here (that were recorded in advance of the CPI report on 15 March):

Inflation Forecasting and Energy Prices Introduction to Concepts
https://www.youtube.com/watch?v=uZwvaUnwppI

and

CPI inflation forecast models for USA February and March 2017.

https://www.youtube.com/watch?v=F30FOs42J34

Saturday, 18 March 2017

Videos on inflation modelling February-March 2017.

I have made two YouTube videos, one on the relationship between energy prices, oil prices and inflation as measured by the Consumer Price Index (CPI) published in the USA and a second one that made forecasts for Feb 2017 and Mar 2017 CPI inflation figures using oil price data alone.

The estimate for Feb 2017 turned out to be a little high at 3.06% versus the 2.7% quoted by the Bureau of Labor Statistics. I still feel that the energy price change which is fuelled by a +100% move in oil year over year from the Feb 2016 low to the Feb 2017 high has not been fully factored in (the oil price change is +75% of you use monthly average prices). I am now developing a new gasoline based model that looks promising as an alternative to the oil price based model.

The two videos are here:

Inflation Forecasting and Energy Prices Introduction to Concepts
https://www.youtube.com/watch?v=uZwvaUnwppI

and

CPI inflation forecast models for USA February and March 2017.

https://www.youtube.com/watch?v=F30FOs42J34

Wednesday, 15 March 2017

Gold analysis shows $1145 target still in play.

The $1145 gold target that I have mentioned on my recent post is still in play. Gold is struggling to hold $1200 over the past couple of days and has already slipped back below the key level of $1224, which was the yearly high as far back as 2009! I need an eight year chart to look at that old price action, so gold has gone nowhere for nearly 8 years. That has been an undeniable bear market.



Note how the gold price action has fallen out of smaller black pitchfork. Support along the bottom line is now resistance (orange circles). The bearish move came after Trump's election victory (red circle). 

Along the larger and perhaps more significant blue pitchfork, price hit $1124 along the bottom line as I suggested was possible many weeks ago. Is it going to that line again at $1145?

Possible factors:
Rising inflation (US CPI report today) - bullish?
US Interest rate hike possible this week - bearish or not?
Dutch general election.
US Debt Ceiling issue.

Bearish potential target: $1145 at bottom line of blue pitchfork.
Bullish potential target: $1250 to resistance at bottom line of black pitchfork.







Wednesday, 8 March 2017

Inflation projection based on EIA current WTIC oil data and forecasts.

No explanations: here is a sneak peek of the chart.

Inflation to Dec 2019 might look like this if the EIA oil price forecasts prove correct (i.e. stationary to very slightly climbing oil prices for the next 21 months.





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