Article Category: Gold

Market Undercurrents

The market's relentless push higher has made it feel as though you can own just about anything (other than bonds and gold) and it will move higher. But beneath the surface of new highs, churning undercurrents are pushing some areas of the market higher, while leaving others behind.

Since the election, a particular narrative has taken hold and it has sent investors scrambling to reposition themselves. That narrative includes lower taxes, less regulation, and substantial fiscal stimulus.

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Posted in: Bonds Dollar Dow Theory Gold Momentum Taxes

Corporate Profits Making the Turn?

Over the past five quarters, corporate profits have been shrinking, but the stock market remains near all-time highs. This divergence can't persist forever, and will eventually break one way or the other. The question is, which way will things go?

At the moment, it appears that earnings could be reversing course, which would provide a very helpful tailwind for equity prices.

Before we get into the current earnings picture, it's important to understand just how bad earnings growth has been over the last five quarters. We can see this in the chart below, courtesy of FactSet.

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Posted in: Dollar Earnings Economy Gold Oil

Richard’s Wisdom: Both Averages Must Confirm

Mary Anne and Pamela Aden's Comments

This week the Dow Jones Transportation Average hit a new 11 month high. This was a bullish sign and a big deal. Why?

As you know, the Dow Transportations has been lagging behind the Dow Industrials, the PTI and the other stock indexes. Following the bear market in 2015, they've mostly been bullish, surging higher, but the Transports didn't join the party. This has been bothering us and signaling caution.

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Posted in: Dow Theory Gold

Richard’s Wisdom On Psychology of the Crowd

Mary Anne and Pamela Aden's Comments

As long-term subscribers know, Richard often quoted the greats in this business. His favorites were William Hamilton, Robert Rhea and E. George Schaefer.

Each of these analysts added something to and developed the Dow Theory. They were Richard's mentors and he followed their work closely. In fact, Richard took over Schaefer's work and built on it, all of which has improved Dow Theory for more than 100 years.

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Posted in: Dow Theory Federal Reserve Gold Interest Rates Psychology

Watch This Key Level

Groupthink can be a dangerous phenomenon in the financial markets, but it can also provide an advantage in some circumstances. If we know what key price levels other traders are watching, and how they're likely to react if and when those levels are reached, then we can plan accordingly.

Right now a lot of attention is being paid to a certain level in the S&P 500 that marks an alignment of various technical indicators. That level? 2118.

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Posted in: Earnings Economy Gold Oil

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