Searching for the EM/Commodity Turn

Searching for the EM/Commodity Turn

Below I plot the ratio of the PCAC Index (Producer Price Index – All Commodities) vs. the USD Index (DXY) over time along with a ~43-year support line dating back to 1973. While not at support, the ratio is very…...

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Gold Update

Gold Update

In my last piece on gold I suggested we could eclipse ~$1,400 by 8/12. That thesis was predicated on some work initially presented in February where, during the second week of that month, we noted gold had managed to rally in…...

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Recent Renewal in Gold Upside Fits Our Historically Bullish Framework but Metal Faces Major Near-Term Test

Recent Renewal in Gold Upside Fits Our Historically Bullish Framework but Metal Faces Major Near-Term Test

On 1/18/16 I declared in this post that gold’s cycle low was in and only the path, duration and magnitude of any upside move was in question.  Prior to that declaration, we emphasized over and over during the latter parts of…...

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SPX Upside to Resume with USD Break-Down

SPX Upside to Resume with USD Break-Down

We first broke this chart out a few weeks ago in this post and have updated it below. Without reinventing the wheel, here’s what we said about the chart in that original post: “Per the plots below, note that the SPX’s…...

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With White House Geopolitics Out of the Way the Fed Can Now Resume Blowing Asset Bubbles

With White House Geopolitics Out of the Way the Fed Can Now Resume Blowing Asset Bubbles

In early March I discussed the heightened prospects of the past year’s worth of VOL simply being a mid or late cycle pause into what would turn out to be a blow-off, bubble inducing rally over some period of ensuing years…....

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How the Fed Abdicated its Independence to White House Geopolitical Strategy on Russia For Nearly Two Years

How the Fed Abdicated its Independence to White House Geopolitical Strategy on Russia For Nearly Two Years

In the chart below I plot crude, the Russian Ruble (RUB) and OPEC production. From 2012 through mid-2014 all three print sideways. However, to the day beginning on 7/29/14, crude and RUB begin to collapse while OPEC production soars. Why such…...

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USD Rallies in a Historical Persepctive

USD Rallies in a Historical Persepctive

Below I’ve analoged the three major rallies the USD (trade-weighted USD vs. major currencies) has enjoyed since the 1970s when the US abandoned the fixed-rate exchange system and linkages to gold that had been employed since Bretton Woods. As mentioned,…...

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Should History Hold, USDMXN at Multi-Decade Channel Resistance Signals Potential for Pivot Higher in Risk Assets, Inflation

Should History Hold, USDMXN at Multi-Decade Channel Resistance Signals Potential for Pivot Higher in Risk Assets, Inflation

In the first chart below I show USDMXN (USD vs. Peso). For nearly two decades back to the latter part of the 90s USDMXN has traveled in an upward-sloping channel b/t lines (1) and (2). Over time it has reached…...

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Massive Break-Out in Trade-Weighted USD vs. SPX Signals Intensification of Global Financial Stress

Massive Break-Out in Trade-Weighted USD vs. SPX Signals Intensification of Global Financial Stress

In the first chart below I show a scatter plot of the weekly returns in the trade-weighted USD (USTWBROA; y-axis) vs. gold (x-axis) dating back 20 years into 1995. The red dot is this week’s data point.  Note that this…...

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CRB vs. USD Has Reached 40 Year Support, But Can it Hold?

CRB vs. USD Has Reached 40 Year Support, But Can it Hold?

On 12/17/15 in this post we highlighted this chart which showed that the ratio of the CRB Index vs. USD was fast approaching a 30-year support line. In reality, if we extended that support line left into the early 70s…...

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