October 18, 2016

Weekly Update 14-Oct-2016

This was a mixed week in all asset categories, but much less violent than last week, with the largest gains and losses in the commodities. Cotton and coffee made the biggest gains, rising 5.9% and 5.6% respectively, while palladium and platinum saw the largest declines, falling 4.2% and 3.8%.

Among the currencies, Bitcoin once again made the largest gains, rising 4.1%. The Chinese Renminbi was the weakest currency, giving back 1.1% of the prior week's 5.5% gain. The strongest government-issued currency was the Canadian Dollar, which gained 1.1%. Short term treasuries rose 0.5% while long term treasury bonds lost 1.2%; once again, both were out-performed by USD cash, which closed 0.6% higher.

Major stock markets were little changed this week, with the weakest being the the Euro STOXX (off 0.8%) and the strongest being the HUI gold stocks, which gained 0.7%. The S&P 500 dropped 0.4%, while the Dow Jones Industrials were unchanged.

After last week's big drop, silver recovered 1.4% this week. As previously mentioned, platinum and palladium weren't so lucky; platinum closed the week at 23.1 grams/oz, just 1.5% above it's all-time low. Copper gave back most of last week's gains, falling 2.5%, while crude oil continued it's rally, adding another 1.6%.

From 2011 to 2015, stocks were in a mighty uptrend, with the DJIA rising from 184 grams to a high of 523 grams. In 2016, however, they have broken down through that uptrend line, and have closed below their 36 month moving average in each of the last two months. This is a strong sign that stocks are now entering a prolonged downtrend, and any extended rallies will be selling opportunities. I would recommend taking profits and positioning for the bear market that we are now entering. Cash (in the form of physical gold) should be a large part of any portfolio. For potential gains without counter-party risks, physical platinum looks very attractive at these prices. Silver will eventually be a bargain as well, but it is still 40% above it's lows, and too risky for me at this point.

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October 9, 2016

Weekly Update 7-Oct-2016

This was a very strong week for everything except precious metals and gold stocks. Crude oil made the biggest gains, rising 8.5%, while gold stocks saw the largest decline, falling 9.4%.

Among the currencies, Bitcoin once again rose the most, adding 6.5%. The Chinese Renminbi rose 5.5%, and even the weakest currency, the Japanese Yen, gained 2.6%. Short term treasuries rose 4.9% while long term treasury bonds gained 2.5%; neither one could match plain, old USD cash stuffed into your mattress, however: that rose 5.1%.

Major stock markets were all higher this week, led by the Nikkei, which gained 5.2%; the Dow Jones Industrials and the Euro STOXX each added 4.7%. Only gold stocks were lower, and were they ever! The HUI dropped 9.4% to close below its 200 day moving average for the first time in 8 months.

Commodities were divided into two camps: precious metals, and everything else. All of the precious metals declined, led by silver, which fell 5.9%. Crude oil continued its outstanding performance, rising 8.5% on top of last week's 9.8% gain. Copper rose 3.4%, while cotton and coffee gained 3.4% and 2.6% respectively.

I would suggest that you take advantage of these updrafts to take profits and move some of your assets to the safety of gold. I don't know how long they will last, but once the US election is complete the fed will take the safety off of its monetary machine gun, and with Italian and German "too big to fail" banks on the very brink of failing, I think this is the time to be moving calmly but forcefully towards the exits – before everyone else smells the smoke and panics.

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October 3, 2016

Weekly Update 30-Sep-2016

Currencies and bonds rose this week, while stocks and commodities were mixed. The strongest asset class was crude oil, which gained 9.8%, while the weakest was silver, which lost 1.2%.

Among the currencies, Bitcoin made the largest gains, rising 2.4%. The USD and EUR rose 1.2% each, and even the weakest currencies, the CNY and CAD, gained 0.8%. Short term treasuries tracked the dollar's 1.2% gain while long term treasury bonds gained 1.7%.

Stock markets reversed course this week, with US markets rising and Euro and Japanese markets falling; the Dow Jones Industrials and the S&P 500 added 1.5% and 1.4% respectively. The Japanese Nikkei lost 0.8%, while the Euro STOXX fell 0.6%.

Both the strongest and weakest asset classes were commodities. Crude oil dominated, rising 9.8%, followed by palladium, which gained 5.8%. Silver fell 1.2% and platinum lost 0.8%.

Many commodities have recently made new all-time lows, including wheat, copper, and uranium. The latest IMO Food Price Index also set a new all-time low. Financial markets may be inflating (especially when priced in government-issued currencies), but real goods are priced at or below depression-era levels. And even stocks, like the Dow Jones Industrials, have now closed for 2 months below their 36 month moving average, which in the past has been a reliable indicator of a long-term bear market. This is the time to get defensive, holding cash in the form of physical gold and lightening up on speculative currency and equity positions.

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September 25, 2016

Weekly Update 23-Sep-2016

Currencies, bonds, and US stocks fell this week, while precious metals, gold stocks, and European stocks rose. The strongest asset class was palladium, which gained 3.4%, while the weakest was Bitcoin, which lost 3.0%.

The USD was the weakest government-issued currency, off 2.3%. The Japanese Yen was the "least weak" currency, falling 1.2%. Short term treasuries tracked the dollar's 2.3% decline while long term treasury bonds fell 0.8%.

Stock markets were lower in the US; the Dow Jones Industrials and the S&P 500 were off 1.5% and 1.1% respectively. The Japanese Nikkei rose 0.2%, while the Euro STOXX gained 1.2%.

Commodities were mostly higher, led by the precious metals. Palladium made the largest gains, rising 3.4%. Silver gained 2.4%, while platinum added 1.9% to close at 24.5 grams per ounce. Crude oil also had a good week, rising 1.0%. The only falling commodities were copper, down 0.4%, and coffee, off 0.3%.

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September 11, 2016

Weekly Update 9-Sep-2016

This week was mostly lower for bonds and equities, but mostly higher for currencies and commodities. The strongest asset class was Bitcoin, which rose 7.8%, while the weakest asset class was gold stocks, which fell 4.4%.

The Chinese Yuan was the weakest currency, off 1.8%. The Japanese Yen was the strongest government-issued currency, gaining 0.6%. The USD lost 0.5%, and long term treasury bonds fell 2.7%.

Stock markets were mostly lower, led by the HUI gold stock index, which dropped 4.4%. The Dow Jones Industrials and the S&P 500 were off 2.7% and 2.8% respectively. The Japanese Nikkei was the only rising stock index, gaining 0.9%.

Commodities were all higher except for coffee, which fell 0.6%. Silver made the largest gains, rising 3.0%. Crude oil gained 2.8%, while platinum rose 1.5% to close at 25.1 grams per ounce.

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September 5, 2016

Weekly Update 2-Sep-2016

Another mixed week, with currencies and bonds mostly lower, equities higher, and commodities both mixed and volatile. The largest gains were in coffee, which rose 4.1%, while the largest losses were in crude oil, which pulled back 7.1%.

The Chinese Yuan was the only rising currency, up 0.7%. The JPY fell the furthest, losing 3.2%. The USD lost 0.4%.

Stock markets were all higher, led by the Euro STOXX, which rose 2.1%. The Dow Jones Industrials rose 0.1%, but remain below their 36 month moving average.

Metals were all lower except for silver, which was unchanged at 0.44 grams per ounce.

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August 21, 2016

Weekly Update 19-Aug-2016

Another mixed week, in many ways a reversal of last week's trends. Currencies were mostly higher, while stocks were higher in the US, but lower in Japan and Europe. Commodities were volatile: crude oil again made the biggest gains this week, rising 9.5%, and the largest losses were once again in cotton, down 3.3%.

The only falling currencies were the Chinese Yuan, which lost 0.5%, and Bitcoin, which fell 1.7%. The biggest currency gains were in the Euro, which rose 1.9%. Bonds were mixed, with the short term SHY gaining 0.3% (a bit less than USD cash, which rose 0.4%) while the long term TLT fell 0.6%, giving back all of the previous week's gains.

Aside from the gold stocks, equities were little changed. In the US, the S&P 500 gained 0.4% and the Dow rose 0.3%, While the Euro STOXX fell 0.4%, and the Japanese Nikkei 225 lost 0.3%. Gold stocks pulled back this week, losing 3.2% to close at 6.2 grams – just below its long-term resistance.

Crude oil, which rose 5.5% last week, rocketed 9.5% higher this week. The week's largest losses were once again in cotton, off 3.3%. Metals were mixed, with platinum falling 3.1% and silver dropping 1.9%, while palladium rose 2.9% and copper gained 1.7%.

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August 14, 2016

Weekly Update 12-Aug-2016

Another mixed week, with currencies mostly lower, and stocks lower in the US, but higher in Japan and Europe. Commodities were volatile: crude oil made the biggest gains this week, rising 5.5%, while the largest losses were in cotton, off 8.7%, and coffee, down 4.8%.

The only rising currencies were the Chinese Yuan, which gained 1.6%, and Bitcoin, which rose 1.0%. The biggest currency losses were in the JPY, which fell 1.2%. Bonds were mixed, with the the short term SHY losing 0.8% (roughly tracking USD cash) while the long term TLT gained 0.6%.

Equities were split between the US, where the DJIA dropped 0.7% and the S&P 500 fell 0.8%, and the Euro STOXX, which gained 2.2%, and the Japanese Nikkei 225, which rose 2.8%. Gold stocks rose 0.6% to close at 6.41 grams, right on their long term resistance line. The HUI is now up 86% from one year ago, putting gold stocks and Bitcoin neck and neck as the best performing asset classes over that period.

Commodities were also mixed. Crude oil, which dropped 7.4% at the end of July and was little changed in the first week of August, finally showed a significant gain, rising 5.5% this week. The week's largest losses were in cotton, off 8.7%, and coffee, down 4.8%. Metals were all lower, led by silver, which dropped 2.6%.

Although not one of the assets I track weekly, it is worth noting that uranium ended July by setting a new all-time low of 0.59 g/lb. (My data goes back to 1988.) Is this the time to buy? Or is it the time to sell? And in either case, what's the best way to do so? I'm working on a report now that will give my answers to these questions.

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August 3, 2016

Weekly Update 29-July-2016

This was a mixed week, with currencies mostly lower, and stocks lower in the US, but higher in Japan and Europe. Crude oil had the biggest drop, falling 7.4%, while the largest gains were in the Euro STOXX, up 5.9% and the gold stocks, which rose 4.2%.

The only rising currency was the Japanese Yen, which gained 0.9%. The biggest currency losses were in the USD and CAD, which fell 1.6% each. Bonds were mixed, with the the short term SHY losing 1.5% (roughly tracking USD cash) while the long term TLT gained 0.4%.

Equities were split between the US, where the DJIA dropped 2.3% and the S&P 500 fell 1.6%, and the Euro STOXX, which gained 5.9%, and the Japanese Nikkei 225, which rose 0.5%. The UK FTSE was off just 0.2% after a huge 7.8% rally the previous week. Gold stocks rose 4.2% to close at 6.36 grams, right at their long term resistance line. The HUI is now up 97% from one year ago, making gold stocks the best performing asset class over that period.

Commodities were also mixed. The big news here was in crude oil, which dropped 7.4%. Platinum and palladium were the strongest commodities, gaining 1.7% each. Silver was almost unchanged, up 0.1%, while copper lost 1.8%.

The Dow Jones Industrials have started their second month below the 36 month moving average level. This has been a reliable indicator marking the start of a long term downtrend for stocks. This is not to say that stock prices (especially as measured in US Dollars) may not go higher from here; but it is very likely that a year or two from now, US stocks in general will be far below their current gold value. There will be exceptions, particularly among the gold mining stocks, but unless you are a short-term trader, I would strongly suggest exiting most US stock positions.

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July 18, 2016

Weekly Update 15-July-2016

This was a generally up week, with all asset classes rising except for the Japanese Yen, which dropped 2.9%, and the long term bonds (TLT), which fell 1.6%. Cotton, up 15.2% and palladium, up 9.0% were especially strong this week.

The strongest currencies were the Pound Sterling, which rose 4.2%, the Canadian Dollar, which gained 2.9%, and the Euro, which added 2.5%. In spite of its drop this week, the JPY remains the only government-issued currency that is up from one year ago – though by just 1.0%. Bonds were mixed, with the the short term SHY gaining 1.8% (considerably less than USD cash, which gained 2.1%) while the long term TLT fell 1.6%.

Equities were all in the black, led by the Euro STOXX, which gained 6.6%, and the Japanese Nikkei 225, which rose 6.1%. The weakest markets were gold stocks, which rose just 0.6%, and the S&P 500, which added 3.6%.

Commodities were all higher. Cotton showed the largest rise, gaining 15.2%, but the metals also performed well, with palladium up 9.0% and copper up 7.2%. Platinum was the weakest commodity, rising a respectable 3.0%.

Although not part of the weekly asset chart, interest in the UK's exit from the European Union, and what that will mean for Great Britain economically, has prompted me to start following the GBP and FTSE 100 Index, and I have added pages for these to the site for your viewing pleasure.

Pound Sterling Since 2011

The Pound hit it's 25 year low of 26.3 mg in late 2011, and rallied only slightly during 2012. In 2013Q2, it began to rise strongly, and added to those gains throughout 2014 and 2015 to finish 2015 at 43.3 mg, about 65% above the 2011 low. 2016, however, has been pretty much a downhill slide, with the GBP losing 23.3% so far YTD. The recent drop due to concerns over "BREXIT" continued this trend, leaving the Pound roughly where it was back in 2012. The only other currency I follow that is in a similar position is the Canadian Dollar. Although the Euro, Swiss Franc and US Dollar are all down hard so far in 2016, they are all still well above their 2011-2012 levels; in fact they are roughly at their 2013Q2 levels.

The FTSE 100 has certainly been volatile lately, but has not been particularly hard-hit. Although down for the year to date, it is trading at about the level of 2013Q1, well above its 2011 lows.

It will be interesting to follow the British experiment with independence from the EU. It will certainly bring challenges, but it will also bring many opportunities. And the British people have historically been pretty good at recognizing and seizing on economic opportunity.