In this post I'm taking a start of the year snapshot by noting the charts I watch that summarize "where we are" and "what's noteworthy". Again, I don't think anyone is reading this blog. Leave me a comment with a favorite investing information source (free or subscription) if you have the time. If nobody is getting any use from my posts, I'll probably change the site to be password protected and see if that evokes any comments.
By way of background, I was leveraged long precious metals all the way to the top in 2011 making outsized gains in the process and have given up most of the gains since then. I have not been really focused on investing the last two years, but I expect at least a modest recovery in precious metals based on renewed imports into India later this year.
Bank stocks are still nicely leading the S&P 500. This indicates that the strong general stock market bull run is intact.
30 year treasury yields have reached the point at which they have turned down for a couple of decades. Will the world change? FWIW, I've looked and haven't seen any real pattern as far as what turning down means to either stocks, gold or commodities, so crossing that red line may not really change anything.
The US dollar is in the middle of a trading range. I'm not expecting any dramatics here.
Japan is worth following as it leads the worlds in terms of aging population, debt / GDP and resource scarcity. Kyle Bass, who had IMO the most impressive investing YOUTUBE presentation of the year, is quite bearish. The above graph, which covers Japanese stocks in USD (no currency hedging) shows that Abenomics has been working (50% gain since his election) but that its now at resistance and needs to break out above $12.25 to be considered a long-term success. Maybe I should join Kyle and buy a long-dated put option?
China may be reaching a decision point, but I think it will just muddle along this year. I'll be wrong if it breaks above 42 or below 30.
The cost of shipping commodities (not oil) had quite a good year last year while no one was watching. Could be a harbinger of global economic good times and inflation. Take a look at the DRYS chart. That would have been a good break-out to buy.
Crude oil seems headed to the bottom of its trading range and I think it might break down a bit as global peace and the fracking engineers stave off Peak Oil another few years. It can't fall too far though because of the high frack'ed oil cost of production.
Commodities, in general are trending lower and seem about to break resistance at 500 . This is a divergence from the BDI above.
Dr. Copper is at the top of its trading range. A confirmed move above $3.40 would indicate, like the BDI, economic good times and rising inflation.
Here's a pretty interesting and shot-term bearish gold chart. The top in gold corresponds to the bottom in the general stock market relative to commodity prices. As you can see, the stock market in terms of commodities is back to pre-crisis levels. I don't think there is too much further for it to rise. Furthermore, gold has diverged relative to the stocks/commodities ratio since June and is still above pre-crash levels. This is a good indication that there is a secular bull underway in gold, probably based on growing China/Indian demand.
Here's the next to final chart. The magnificent, anomalous gold bull run suported by the moving averages out of 2001 is clearly over. The overall bull supported by that logarithmic trend line remains intact. That trend line is roughly a 12% annual price rise. This chart looks pretty bad with a confirmed down-trend in place, horizontal support being threatened and the next support being around $1030. We'll see.
Here's the final chart. A confirmation of the bottom being in would be GLD ceasing to leak out gold.