Recession Watch I: Bullish Gold/metals Charts

19 thg 3, 2019

I continue to iterate my way through various charts to confirm or reject my bearish outlook on the broader market and SPX specifically. Gold is often viewed as a hedge against recession, or an indicator that we are in a recession when price surges. We don’t see much talk of a rush to gold as being a cause of a recession, but I certainly think it contributes. Now I have tagged this chart as being long on gold, which is to be viewed as short on the broader economy as consumers/firms hedge.
The gold cfd chart is simple: we had a massive bull run for the whole history of the chart and then we topped in 2011 and have been retracing since then. We have found support on the 50 period 3m/quarterly moving average. After finding support on the 50 quarterly MA the price action is in the process of forming a bullish ascending triangle pattern. As far as the oscillators go, the RSI has cooled off to a middling range, the Stochastic RSI, which is ideally supposed to be a leading indicator, is having a bullish cross, as is the Stochastic. The indicators, plus the triangle as drawn, should fully perform in 2020.
The silver cfd chart isn’t lengthy enough to use the quarterly timeframe and the monthly charts suggest silver isn’t as bullish as gold. The price action is beneath the 50M MA and the RSI, Stochastic, and Stochastic RSI are a bit… lackluster. The main strength of the silver chart is the massive amount of hidden bullish divergence on the RSI. We also see a consolidation triangle that should perform in 2020.

Now the copper cfd chart I like. On the monthly we found support on the 50 and the MACD, Stochastic and Stochastic RSI are all saying we are about to go boom. The RSI, at these levels, is lacking divergence, hidden, classic, bearish and bullish.

Going down a timeframe to look at copper we the price action found support on the 200W MA (Red arrows) for the first time in some six years (orange arrow). The blue arrow shows we just found support on the 100 MA for the first time in over 9 years (green arrows).

Next idea I’ll be looking at the price of oil. Should be up tomorrow or the day after. The long and the short of the series is these markets are primed to pump and they will most likely be at the expense of consumers and firms and as such saving and investing will suffer. The SPX and other indexes of the larger market are already showing signs of being over-extended and so 2019-2020 looks like a time to go short. I have linked some other ideas that start to give a big picture on my bearish outlook.