Saturday, 26 November 2016
USDX chart from March 2013 with Price objective of 102!
USDX point and figure chart from March 2013 with Price objective of 102! This target flipped to 75 near the end of 2013 for just a little while, then became back in early 2014, when the dollar was in the low 80s and then what happened? The dollar has gone to 102!
Thursday, 27 October 2016
CPI has informative correlation with energy prices.
The CPI index for all items, year over year, has a remarkable correlation with energy prices over the past 16 months.
So much so, that one can take the year over year energy price changes as given by the Bureau of Labor Statistics (BLS) in their inflation reports and track the All Items inflation rate to within about +/- 0.3%.
In the following chart, I have used the energy price changes, scaled them by a weighting and overlaid it on the CPI all items index graph. EC on the charts stands for Energy (price) Contribution. Energy typically contributes about 7% of the CPI with slight month to month variations in the BLS data. Here is the basic comparison between CPI and energy price changes (Energy sector, gasoline and the WTIC oil contract):
In the second chart the energy price changes have been scaled by the weighting that energy has in the CPI calculation.
Blue line is CPI All Items index year over year for each month reported.
Red, green and purple lines are calculated from changes in energy prices using three slightly different weighting models:
I believe that this shows that inflation is critically dependent on energy price changes as the energy bear market might be starting to flatten out and turn up. This has big implications for interest rate policy and gold prices going forward.
I have prepared a more comprehensive report showing the methodology and covering a wider time frame. It uses my own proprietary model to attempts to forecast the Feb 2017 and Mar 2017 inflation figures that will be published by the US government on 15 March and 14 April respectively. I am currently refining this model in an attempt to forecast inflation directly from commodity price changes, particularly crude oil which is traded on a daily basis and appears to have predictive value.
Once the Feb inflation figures are announced, further refining of the model will be possible and I intend to publish a second report later in march modelling the prospects for price inflation until then end of 2017.
So much so, that one can take the year over year energy price changes as given by the Bureau of Labor Statistics (BLS) in their inflation reports and track the All Items inflation rate to within about +/- 0.3%.
In the following chart, I have used the energy price changes, scaled them by a weighting and overlaid it on the CPI all items index graph. EC on the charts stands for Energy (price) Contribution. Energy typically contributes about 7% of the CPI with slight month to month variations in the BLS data. Here is the basic comparison between CPI and energy price changes (Energy sector, gasoline and the WTIC oil contract):
In the second chart the energy price changes have been scaled by the weighting that energy has in the CPI calculation.
Blue line is CPI All Items index year over year for each month reported.
Red, green and purple lines are calculated from changes in energy prices using three slightly different weighting models:
I believe that this shows that inflation is critically dependent on energy price changes as the energy bear market might be starting to flatten out and turn up. This has big implications for interest rate policy and gold prices going forward.
I have prepared a more comprehensive report showing the methodology and covering a wider time frame. It uses my own proprietary model to attempts to forecast the Feb 2017 and Mar 2017 inflation figures that will be published by the US government on 15 March and 14 April respectively. I am currently refining this model in an attempt to forecast inflation directly from commodity price changes, particularly crude oil which is traded on a daily basis and appears to have predictive value.
Once the Feb inflation figures are announced, further refining of the model will be possible and I intend to publish a second report later in march modelling the prospects for price inflation until then end of 2017.
I have posted a rehearsal of a presentation on this subject on YouTube at:
https://www.youtube.com/watch?v=0UMa0Fh7YmM (please forgive the shaky hand held camera!)
Monday, 10 October 2016
Target for Pound $1.11, gold $1170 or $1100, gold might still be near £1000/oz.
My charts as of last week:
Target for Pound $1.11, gold $1170 or $1100, gold might still be near £1000/oz.
Once $1250 region is breached, $1170 and $100 come into play at the lower ines of the Andrews pitchforks:
As for you Britush pound, $.11 target would just need a duplicate of the Brexit fall in a typical Trident Trading ABCD pattern (not marked):
1st move $1.48 to 1.30, next move 1.29 to 1.11. It could be worse. It could be taken from 1.50 to 1.28 then 1.29 to 1.07:
Target for Pound $1.11, gold $1170 or $1100, gold might still be near £1000/oz.
Once $1250 region is breached, $1170 and $100 come into play at the lower ines of the Andrews pitchforks:
As for you Britush pound, $.11 target would just need a duplicate of the Brexit fall in a typical Trident Trading ABCD pattern (not marked):
1st move $1.48 to 1.30, next move 1.29 to 1.11. It could be worse. It could be taken from 1.50 to 1.28 then 1.29 to 1.07:
Target for Pound $1.11, gold $1170 or $1100, gold might still be near £1000/oz.
My charts as of last week:
Target for Pound $1.11, gold $1170 or $1100, gold might still be near £1000/oz.
Once $1250 region is breached, $1170 and $100 come into play at the lower ines of the Andrews pitchforks:
As for you Britush pound, $.11 target would just need a duplicate of the Brexit fall in a typical Trident Trading ABCD pattern (not marked):
1st move $1.48 to 1.30, next move 1.29 to 1.11. It could be worse. It could be taken from 1.50 to 1.28 then 1.29 to 1.07:
Target for Pound $1.11, gold $1170 or $1100, gold might still be near £1000/oz.
Once $1250 region is breached, $1170 and $100 come into play at the lower ines of the Andrews pitchforks:
As for you Britush pound, $.11 target would just need a duplicate of the Brexit fall in a typical Trident Trading ABCD pattern (not marked):
1st move $1.48 to 1.30, next move 1.29 to 1.11. It could be worse. It could be taken from 1.50 to 1.28 then 1.29 to 1.07:
20 months EMA on gold being tested - Twins?
Looking at the monthly gold chart posted by FullGold crown on goldtadise, the 20 months EMA on gold is being tested. Do we have twins? For bears there probably needs to be a little end run around this average before the plunge. For bulls, the 20EMA had better hold.
Thursday, 25 August 2016
GDX return to base?
GDX has returned to the breakout point of a pitchfork structure (click to enlarge):
Wednesday, 6 July 2016
Gold price in GBP sterling has retraced 61.8% of its losses and more.
I just posted this on www.goldtadise.com in reply to Mark's post.
Mark was looking at gold's move to $1369 and saying that in USD that is very close to a 38.2% retracement of the entire downmove from $1900+ to $1045 and possibly a point for resistance. I replied:
Actually I have taken a closer look and it is very close to 61.8% in sterling. Close enough still to be resistance. Also, today's sterling price (£1057) has just broken above the upper end of the support zone during the market topping process (2011-2013) which was from about 960 to 1015 BP. Last week's close price was about 1013 but today's is 1057 GBP. I don't know why the $GOLD:$GBPUSD chart is not giving me any of this week's prices but there you go! Here is the chart:
Mark was looking at gold's move to $1369 and saying that in USD that is very close to a 38.2% retracement of the entire downmove from $1900+ to $1045 and possibly a point for resistance. I replied:
It is now $1368.70 / $1369.70 Bid/Ask on Kitco, right where your lines meet (1369.90).
High so far today was $1371.90, low $1364.00 (6 July 2016 10,00 BST UK time).
I guess you are looking at the 38.2% retracement of the entire downmove from $1920 to $1045 approx coming in around $1369, approx.
I am looking at gold in GBP and I can tell you that the retracement of the downmove is now more than 61.8% in sterling. Not that it is the most important price but it is interesting to note.
Actually I have taken a closer look and it is very close to 61.8% in sterling. Close enough still to be resistance. Also, today's sterling price (£1057) has just broken above the upper end of the support zone during the market topping process (2011-2013) which was from about 960 to 1015 BP. Last week's close price was about 1013 but today's is 1057 GBP. I don't know why the $GOLD:$GBPUSD chart is not giving me any of this week's prices but there you go! Here is the chart:
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