Spotting the next trend

[Dollar_McGavin]

Happy Sunday evening everyone!

Why do I look at so many different markets? To paraphrase boxers:

It’s the punches you don’t see that hurt the most

The reason I do this is to see capital flow and to understand why. Capital doesn’t stand still, it’s in continuous motion. My job as an investor / trader is to ignore the hype and know which the capital is flowing in order to get ahead of the big moves.

While everyone is focused on new ATHs in US equities and BTC hitting $100K, I usually prefer to take a deeper look behind the façade.

Since the end of September, capital has been flowing into USD denominated assets, namely US equities, tech stocks and crypto as illustrated in the DXY:

Yes, even crypto is attracting foreign currency as shown by the positive correlation with DXY this year:

Going by the 2 charts above plus the ATHs in the US indices and crypto, we can conclude several observations:

1. Foreign investors are a major driving force behind the current trends since end of Sept
2. Investors are treating crypto (including bitcoin) as risk / speculative assets
3. A repatriation of foreign capital will most likely trigger a major downturn in US equities and crypto

So the question then becomes, what could trigger a repatriation of foreign capital? In other words, what is the punch that most won’t see coming?

1. The first we already mentioned, if the USD depreciates vs other currencies (DXY rolling over)
2. Global economic shock or downturn due to bankruptcies, real estate or banking crisis or geopolitical event
3. Rollover in Non-US financial markets, requiring liquidity to cover losses or margin calls
4. Rollover in US risk markets such as semiconductors

This means that the current trends are only as strong as the weakest link. It’s impossible to say where the initial domino will fall, but US Real Estate, Semiconductors, European equities, the Nikkei 225 and Japanese banks certainly are strong candidates.

US Real Estate

First an update of the US real estate market that is showing signs of an intermediate top:

Nikkei 225

The massive downward spike that’s been attributed to the JPY carry trade unwind broke several major technical levels and was the first signal of an impending long term (2+ years) bear market. It looks like we may get the 2nd signal soon with the yellow intermediate term SMA turning down this week confirming a lower intermediate high made on Oct 15th.

European Stocks

European and UK equities are basically going sideways and showing strong signs of distribution:

And finally, one place where capital is not flowing is semiconductors… remember those?

One clear sign will be an upturn in US Treasuries as investors rush to the “safety of this risk-free asset”:

At the risk of repeating myself, the markets have already confirmed the beginning of a secular bull market in commodities. The precious metals sector have also started their long term bull markets. What I’m looking for are signs of the parabolic phase as I believe the capital driving force will come from these risk markets that I’ve been posting about.

Seems only a matter of time…tick tock…tick tock…

[Dollar_McGavin]

Good evening fellow traders. hope you’re all having a festive weekend!

Ok, the number of signs pointing to an impending risk assets bubble burst are piling up.

SOXX
Let’s start with a semiconductors update, which looks to be hanging on for dear life:

Notice how the price is hugging the yellow intermediate term SMA. I’ve also added the Yearly Cycle Trendline. This is part of Cycle Theory which is too complex to explain in a forum, but a break below this trendline (which we got last week) means that the ATH @ $267.24 was the top for this multi-year bull run. The only way to negate this is a new ATH. In any case, price is now getting squeezed between the red and yellow SMA and will need to make a decision soon.

NVDIA
And now NVDIA looks to be joining the rest of the semiconductor space:

Price is not only falling out of the long term uptrend channel going back to Oct’22 but looks to have also broken the Yearly Cycle Trendline and has made a marginal lower low. NVDA needs to make a new ATH and quickly to keep this bull run in tact.

Healthcare
Healthcare has been a go to sector for many investors during this bull run. It’s also the first US sector to roll over into a multi-year bear market:

I suspect that the other sectors are not too far behind. Two things that can push the other sectors over the edge are the financial sector and financial assets.

US Banks
Major US banks look like they just made a classic 3 gap blow off top & reversal. All the tell tale signs are there with a breakout gap, multiple mid / runaway gaps and an exhaustion gap. The blow off top is marked by an attempted breakout above the top line of the upward parallel channel which then failed and aborted back below that same top line.

As I mentioned in a previous post, considering all of the problems in the Real Estate sector, this looks to be a manufactured move by market makers & institutions to re-position order books and liquidate preferred clients.

Now let’s cross the Atlantic and take a look at the 2 largest banks in Europe (as measured by AUM).

BNP Paribas
Europe’s largest bank looks like it’s rolling over:

Crédit Agricole Group
And Europe’s 2nd largest bank looks very similar:

And now back to the US financial sector and a major player in the insurance space.

AIG
AIG never recovered after shares lost ~95% of their value in the GFC fallout and now looks to be in trouble again:

Real Estate
And speaking of Real Estate, the sector continues to deteriorate and we may see it pick up downside momentum this week:

Junk Bonds
These financial assets are the backbone of the corporate credit market. They are in a multi-year bear market but have been in a pullback since Oct’23. They now look to be rolling over. If these bonds don’t make a new high soon, the downside volatility will be brutal as the yearly cycle aligns with the multi-year cycle:

Municipal Bonds
It’s a pivotal moment for Muni bonds. Here’s an update to the weekly chart I posted earlier in the thread. There’s a lot of information here, but it’s needed to illustrate what I’m seeing.

The most important thing to understand here is to look at the 2 Yearly Cycle lows and see the strong trends that they produce as shown by the yellow arrows. Now the yellow SMA is saying that this market is in a Yearly Cycle advance, but it’s been very weak so far. We would expect a fresh Yearly Cycle advance to blow through that yellow dashed resistance level overhead. However the current price action is saying that the more probable move is break of the yellow support level targeting the red shaded area, this would make a lower low and confirm that the Yearly Cycle has topped and entered a Yearly Cycle decline.

Gold
Finally, what does all this mean for gold?

As I wrote 2 weeks ago, gold needed to make a decision whether it’s already in the parabolic phase or if it needs another leg down first:

The spot market still looks undecided. The futures market however looks like it’s making a cautious move higher:

The futures market is more aligned with risk assets rolling over but we never take anything for granted and await further confirmation this week.

[Dollar_McGavin]

Happy Sunday evening everyone, hope you’re all getting some time off for the holidays

I started this thread 2 months ago to show that trend changes can be spotted way before they happen. As we are in the middle of a secular trend change, not all market participants will see the trend shift at once. Some see it happening very early, others a bit later which makes it a gradual process. And of course some don’t see it coming until it runs them over. This past week there were several markets that joined the US Healthcare sector into a multi-year bear market.

Junk bonds - The financial foundation for the US equities bull is crumbling
Junk bonds entered a multi-year bear market.

Municipal Bonds
Here’s an update of the weekly Muni bonds chart, look at the last 2 candles. Gains accumulated over several months wiped out in 2 weeks. That’s what the start of a yearly cycle decline looks like.

As financial assets go, so go the riskier assets. The big players are aware of the charts above and have already positioned themselves accordingly.

Semiconductors
An update to the weekly SOXX chart. Two weeks ago the SOXX ETF was being squeezed between the intermediate cycle red SMA and the long term (yearly cycle) yellow SMA and needed to make a decision. And last week it decided to fake a move above the red SMA before breaking and closing below the yellow.

A break of the yellow support level @ $211.21 would be final confirmation.

NVDA continues to breakdown
As expected NVDA broke below the yellow intermediate cycle SMA. As I wrote last week, NVDA broke below the Yearly Cycle Trendline and fell out of the multi-year uptrend channel. Unless it makes a new ATH quickly, it will join the rest of the semiconductor space and other sectors in a multi-year bear market.

US Industrial sector enters a multi-year bear market

US Real Estate and Commercial Real Estate rollover into a multi-year bear market

US Major Banks
Let’s check in on US banks, where price fell through that massive post US elections gap.

Now let’s take a look at the 2 largest financial market bubbles in world.

India’s Sensex - the 2nd largest equities bubble
It looks like the 2nd largest equities bubble in the world is bursting with that strong move down last week.

Of course this market can keep the bubble in tact by making a new ATH, but highly unlikely as risk markets everywhere are rolling over.

Nasdaq100

Nasdaq100 doesn’t exhibit the clear cut signs shown in the other charts but we shouldn’t expect that from the strongest performing index. What is clear however is that bearish weekly candle right where we would statistically expect the intermediate cycle to top out. And if it does turn out to be the intermediate top then look what’s waiting below, the long term upward parallel channel bottom and the Yearly Cycle Trendline both of which are at risk of being broken through. As this is the strongest performing risk market, we can expect it to be the last to break.

US Dollar Index
As stated several times before, the strong USD has attracted a lot of foreign capital into US assets. Around 30% of the US equities market cap is made up of foreign capital which can vanish very quickly when DXY (or any major risk market) rolls over. After 3 months in a strong uptrend, I’m expecting this intermediate cycle to top out and roll over any day now. The daily bearish candle right in the timing band for an intermediate cycle high is a first signal.

Gold futures ready to turn higher
This is a very short term chart (1 hour) but gold (as well as silver) futures look like they’ve made a bottom and are ready to turn higher.

This week will be a short trading week in holiday thin conditions, we could be in for some extra fireworks this year. Let’s watch and see.

Happy holidays to all who are celebrating!

[Dollar_McGavin]

Happy holidays everyone, hope you’re all getting some well-deserved time off!

Markets were quiet this week due to thin holiday conditions, so I’ll do something different this week and take the opportunity to make the case for global economic stagflation soon. Please bear with me while I go into some economic history. I’ll keep it simple but in order to know where you’re headed it’s necessary to know where you’ve been.

Why do Central Banks exist?
No serving politician or official will ever admit it, but central banks’ sole purpose for existence is to keep governments solvent—the first central bank, the Bank of England, was created specifically to manage the monarchy’s massive debt in the late 1600s.

The Fed, a private institution owned by major US banks, exists for a similar purpose and their future decisions will be dominated by the current US fiscal crisis, which economists say is in “Fiscal Dominance.” This reflects a debt burden so massive it can’t be reduced through conventional means, this has become a global issue but for simplicity’s sake, we’ll limit today’s analysis to the US.

The real cost of US govt debt
The best way to cut through all the noise is with hard numbers that are impossible to ignore and the chart below showing the US govt’s debt burden in real terms does exactly that. The US government’s debt duration averages 6.5–7 years, which unfortunately doesn’t align with future inflation expectations data at 5 & 10 years. So while using the 5 year treasury yield isn’t perfect, it’s more than good enough for our purpose.

Starting on the left, post-2008 QE programs drove real rates negative, benefiting debtors but penalizing savers, lenders and creditors. By 2016, the Fed started to raised rates and unwind QE, but the rising debt burden and bond market “illiquidity” forced the Fed to pause QT and cut rates in 2019, even before COVID, which just happened to provide a convenient political cover to drive real rates negative again. The pandemic and supply shocks ignited the secular commodities bull and inflation, forcing aggressive rate hikes in 2022, triggering bond market turmoil and amplifying the debt burden to crisis levels.

Record high tax receipts from ATHs in equities markets offered some respite in delaying the inevitable, but as the chart shows the current trajectory is unsustainable. Interest payments now exceed $1 trillion annually (the single largest govt expenditure), with federal deficits at 6% of GDP, both of which will continue to rise with bond yields.

Looking at the right side of the chart, recent rate cuts failed to alleviate the debt burden, as Fed policy influences short-term rates but not the long end of the yield curve. In the 7-yr treasury yield chart below, note that while the Fed has cut -100bps over the last 4 months of 2024, the 7yr yield has gone up by more than +100bps over the same period increasing the debt burden and federal deficits.

This brings us to where we are today. In order to reduce the debt burden going forward, there are 2 possible paths:

1. Continue as we have but where equities markets will need to go a lot higher to provide much more capital gains tax than they have so far today (resulting in yields continuing to climb higher, increasing the debt burden, collapsing the bond markets which will send yields even higher… wash, rinse, repeat) or

2. Real rates will need to go deeply negative again (massive depreciation of USD purchasing power)

Foreign indices, multiple US sectors, bond markets, commodities and the charts below are pointing to the latter. And as history has already shown when push comes to shove, the Fed will sacrifice the USD before sacrificing the bond market / US govt solvency. Yields are at dangerously high enough levels to trigger a financial or banking crisis (as shown by the bond market charts in this thread) which could provide the necessary political cover for some stealthy form of QE as well as other measures.

Or I could be completely wrong, let’s watch and see what happens!

As mentioned, markets were quiet this week so there’s only 2 charts in today’s analysis.

US Small Caps
First up the weekly chart below shows Small Caps didn’t follow the S&P500 and Nasdaq100 into new ATHs, instead this index ran into resistance at the previous 2021 high forming a double top. Note also that this market topped within the intermediate cycle timing band and has closed below the Yearly Cycle Trendline. This means the index now has very little time to make new ATHs to keep the bull market intact otherwise it will rollover into a multi-year bear market. Tick tock…

Equal weighted S&P500
All the signs are pointing to the S&P500 and Nasdaq100 bull run being held up by a handful of heavily weighted mega caps. The equal weighted S&P500, like Small Caps, also has an intermediate cycle top within its statistical timing band, has broken the Yearly Cycle Trendline and that move below the red intermediate term SMA looks very convincing. In any case, it’s now also on the clock.

We may not see much before liquidity returns to the markets on Jan 2nd.

Enjoy the rest of 2024 with your loved ones and I’ll see you in 2025!

[Dollar_McGavin]

Happy 2025, everyone!

Hope you’re all having a fantastic start to the new year.

Another week of holiday thin conditions, another fairly quiet week. Allow me to take this opportunity to make the case for an ongoing secular trend change.

The current secular trend

Let’s start with this Nasdaq monthly chart going back to the beginning of the current secular cycle, the post-2008 bottom.

The important thing to note is where price first wobbled and fell out of the secular uptrend channel in mid 2022. Now price did get back in the channel and made new ATHs, however, it’s hanging around in the lower half of the channel and one wobble is usually all any trend gets before a reversal.

So how far away is a secular trend change? For that we need to drill down to the weekly chart for some more clues:

There are several things to note on the weekly chart. The first is that the long term uptrend channel is the old school trend analysis equivalent to a yearly cycle advance in cycles theory. When price eventually falls out of the channel, it will also break the Yearly Cycle Trendline.

This is where it gets interesting. A break of the YC trendline indicates the start of a YC decline. A YC decline in the Nasdaq is on average -35% from the YC high, which in our case is also the ATH. The previous YC decline was -38%. Now look at the 2 yellow dashed lines that are -35% resp -38% from the ATH. They are both below the Secular Cycle trendline going back nearly 16 years. So, if the Nasdaq 100 continues to behave as it always has, there is a very high probability that the next intermediate cycle decline will cascade into the Yearly and Secular (multi-year) Cycle declines, i.e. secular bear market.

So how close are we to an intermediate cycle decline? Let’s drill down on the daily chart.

This week, price fell out of the intermediate term uptrend channel and is now trying to get back in. Time wise, we can expect a daily cycle / short-term bottom any day now, but once price falls out of a longer term channel the next advance is often very weak. The main take away here is that the intermediate cycle (IC) looks close to rolling over and an IC decline is on average -17%, which is well below the Yearly Cycle trendline.

The Nasdaq is signaling that a secular bear market is on the short term horizon.

But are there any other markets that can add weight to an imminent secular bear market?

Junk Bonds

Let’s take a look at a monthly chart of the junk bond market going back to the post-2008 / GFC lows. As mentioned in previous updates, junk bonds are the foundation of the corporate credit market, there is no economic nor business growth without a healthy corporate credit market.

The takeaway here is where price is forming a Yearly Cycle high. The weekly charts in previous updates show a high probability that $97.90 is a YCH, which would make it the all-time lowest YCH ever. And a YC decline from this level could be catastrophic, see the rectangular price target area with blue and red shaded areas. An average YC decline is -20%, which would take this market below the Global Financial Crisis and COVID lows where the Fed was forced to intervene and buy junk bonds outright.

In the real world, this essentially means that investors and financial institutions see business lending as very high risk. Why would they think it is high risk? Maybe because they think the world is headed towards stagflation as I highlighted in last week’s update?

And this isn’t just an American phenomenon, let’s take a look at the international junk bond market.

International Junk Bonds excluding US

This weekly chart indicates that international junk bonds are already in a secular bear market. Look at that weekly candle after price fell out of the long term uptrend channel. The final liquid trading week of 2024 wiped out all the 2024 gains taking price down to Oct 2023 levels.

Did the holiday thin conditions of the last 2 weeks prevent an even deeper market rout? Let’s watch and see.

Only a matter of time before we see the impact in the international equities indices.

Euro STOXX 50 Index

European equities look like they are in a YC decline after breaking the Yearly Cycle Trendline and struggling to stay inside the long term uptrend channel.

On average, a YC decline is -31% from the YCH (Yearly cycle high) which in our case is also the ATH. This would put price well below the even larger Multi-year Cycle Trendline, i.e. a secular bear market.

One thing to note here is that European equities aren’t in the same bubble territory as US, Indian and Japanese equities. So, even though the decline in European equities won’t be as deep, I don’t expect to see this market recover before the rest of the world.

And speaking of bubbles…

India’s SENSEX Index

The 2nd largest bubble in the world looks like it is bursting with both a break of the YC Trendline and the lower boundary of the long term uptrend channel.

An average YC decline (-38%) doesn’t imminently break the Secular Cycle Trendline, but the odds of this emerging market defying a global debt deleveraging (stagflation) is near zero, IMO.

The first liquid trading week of 2025 should be very interesting.

[Dollar_McGavin]

Happy Sunday morning everyone!

The bond markets and interest rates are sending a very strong signal: we are getting closer to something major breaking in the global financial system.

Interest rates at critical levels

Interest rates continue to climb ever higher:

Higher rates deteriorate the value of collateralized bonds risking a collateral and USD shortage, a repeat of 2008.

US govt bonds

The US treasuries market, the global reserve asset and bedrock of the global financial system, should be making G7/G20 officials very nervous.

Unfortunately for them, none of them can take any preemptive QE/ debt monetizing efforts without destroying their “economy is strong” / “soft landing” rhetoric and their credibility along with it. They know the situation, are in desperate need of inflation/currency devaluation as well as political cover (like a bank or economic crisis) to start QE / debt monetization / deleveraging.

US Banks and Financial Sector
This has hit not only US banks but also the broader financial sector:

Junk Bonds

US junk bonds continue to deteriorate:

While European, UK and Canadian junk bonds are imploding:

Muni Bonds
Muni bonds made their lowest weekly close since Nov’23 breaking a pivotal level:

US Mega Caps
The Mega Caps have finally started to react to the increasing risks and are showing signs of rolling over into Intermediate term declines which risk cascading into even larger yearly cycle declines, i.e. multi-year bear markets.

S&P500 and Nasdaq100
This can also be seen in the US indices as well. When the drop comes, the foreign capital unwind (see explanation in earlier thread updates) will not be orderly i.e. crash like downside volatility.

Secular Shift

My thesis for a long while now is that the global economy was in a debt trap headed for an inevitable deleveraging and stagflation. In my mind, the real question was when the rest of the markets would reach a similar conclusion.

With the risk off reaction to last Friday’s NFP beat (sign of a strong economy) I believe that markets have now realized this as well. Any positive economic data or hawkish Fed /CB jawboning means:

1. less chance of monetary easing
2. leading to higher rates
3. leading to further bond market turmoil
4. leading to higher bank balance sheet risk
5. leading to higher USD demand (to cover collateral shortfalls) and decline in equities
6. leading to lower business growth and tax receipts
7. leading to higher deficits and bond issuance
8. leading to higher rates….wash, rinse, repeat.

The big players have already understood this as this big picture gold vs S&P500 chart shows the ongoing secular shift out of risk assets:

And commodities are close to breaking out into a second leg higher:

I’ll be watching the Monday open in Japan and India as both of these bubble markets were closed and have yet to digest the NFP risk off reaction.

Either way, should be a very eventful week.

[Dollar_McGavin]

Happy Saturday morning everyone!

Not sure how many are still reading this topic but it feels like it’s time to close the thread down.

So I’ll just leave this out here for now.

Gold vs the other bubbles

All the following are weekly charts on the same scale and analyzed in the same way. The idea is to compare the momentum of each market. Simply compare:

1. price in relation to the upward channel
2. price in relation to the yellow moving average
3. slope of yellow moving average (momentum)

US equities
For the largest bubble, we’ll use the equal weighted S&P500 in order to avoid skewing by a handful of mega caps:

Semiconductors and AI bubble
We hear virtually nothing about semiconductors and the AI bubble these days:

India’s SENSEX
The 2nd largest bubble:

Japan’s Nikkei
The 3rd largest bubble:

Crypto
While BTC is making ATHs, it isn’t joined by the broader crypto market as shown by this equal weighted crypto ETF:

This is very similar to US mega caps not joined by the broader equities market. ETH in particular looks like it is rolling over:

Gold
While the other markets look like they are stalling and rolling over, the momentum in gold is accelerating (slope of yellow moving average):

Precious metals along with the broader commodities complex in contrast are joining gold in moving higher as shown in earlier updates.

To those still reading, I expect to see more and more dynamic moves in the markets over the coming days and weeks. As stated at the beginning of the thread, I believe silver and platinum will be the standouts in 2025.

Might be back with an update in a few weeks / months if there is some interest but for now I’ll be signing off this thread and will lurk in the background for a while.

Take care everyone and good luck in your trading!

[ponponwei]

The Nasdaq is signaling that a secular bear market is on the short term horizon.

But are there any other markets that can add weight to an imminent secular bear market?

Happy new year! I really appreciate this very detailed post and the labeled charts. They’re really helpful and I know they must take time to put them together.

How much do you consider political factors in the section I quoted above? (Asking because it’s inauguration day in two days)

My thesis for a long while now is that the global economy was in a debt trap headed for an inevitable deleveraging and stagflation. In my mind, the real question was when the rest of the markets would reach a similar conclusion.

Have you reduced exposure to equities this year or maybe even last year?

[Dollar_McGavin]

@ponponwei

The Nasdaq is signaling that a secular bear market is on the short term horizon.

But are there any other markets that can add weight to an imminent secular bear market?

Happy new year! I really appreciate this very detailed post and the labeled charts. They’re really helpful and I know they must take time to put them together.

Happy New Year, @ponponwei!

Glad to hear that you appreciate the charts and my rantings.

Actually the chart analysis goes quite quickly, the part that takes time is trying to figure out the best way to explain and describe what all the charts mean in a cohesive way to others.

@ponponwei

How much do you consider political factors in the section I quoted above? (Asking because it’s inauguration day in two days)

Not much, I believe that political factors are already priced into the market. US officials don’t control the economy, they can only manage it. The goal of every elected politician in democratic countries is to stay in power and get re-elected. Provided there is enough fiscal capacity, they’re more than happy to spend as much govt / tax money as needed to do just that, e.g. fund economic expansion, tax cuts, social benefits etc.

In other words, it’s fiscal capacity, not the officials themselves, that determines how much economic influence can be exerted. In the US, it wouldn’t have mattered who won the election, as the winner would inherit the same fiscal mess. The bond markets and interest rates are basically saying there is no fiscal capacity left.

@ponponwei

Have you reduced exposure to equities this year or maybe even last year?

Actually I rotated out of equities and into hard assets (precious metals, uranium, battery metals, rare earths and more) in 2020-2021, as commodities were (and still are) the lower risk, higher reward asset class.

[ponponwei]

@Dollar_McGavin

US officials don’t control the economy, they can only manage it.

I had thought this too but perhaps an exception is the crypto market (of which I’m not sure you delve into).

@Dollar_McGavin

Actually I rotated out of equities and into hard assets (precious metals, uranium, battery metals, rare earths and more) in 2020-2021, as commodities were (and still are) the lower risk, higher reward asset class.

That’s interesting. It’s been a while then - also what great timing. I’m new to do this so pardon my question - are you doing this through ETFs? Or outright buying precious metals?

[Dollar_McGavin]

@ponponwei

@Dollar_McGavin

US officials don’t control the economy, they can only manage it.

I had thought this too but perhaps an exception is the crypto market (of which I’m not sure you delve into).

No, officials don’t control the crypto markets either, as the high positive correlation between BTC and Nasdaq100 shows (see chart in the link below):

@Dollar_McGavin

I would say that Bitcoin is more closely correlated to the Nasdaq 100. See the chart below

In other words, the same forces that influence the Nasdaq100 also influence BTC and the crypto market, nothing officials can do about that.

Officials do however try to regulate the crypto market which is totally different.

@ponponwei

@Dollar_McGavin

Actually I rotated out of equities and into hard assets (precious metals, uranium, battery metals, rare earths and more) in 2020-2021, as commodities were (and still are) the lower risk, higher reward asset class.

That’s interesting. It’s been a while then - also what great timing. I’m new to do this so pardon my question - are you doing this through ETFs? Or outright buying precious metals?

Please feel free to ask questions, it’s hard to learn otherwise.

My timing wasn’t bad, but I need to improve my technique for scaling in and out. Always learning.

I manage multiple accounts, some are invested in ETFs, funds and the physical commodities themselves, while one is invested into commodity related stocks and equities in exploration, mining, refining and production.

[fishmoyne1]

Thank you for your interesting contribution to this site and how one should view things on the bigger picture.

All the best in 25 and I will look forward to more updates if you ever get around to it again.

Cheers John
Ireland

[ponponwei]

@Dollar_McGavin

I manage multiple accounts, some are invested in ETFs, funds and the physical commodities themselves, while one is invested into commodity related stocks and equities in exploration, mining, refining and production.

Ah yes this is what I figured! Not sure how best to ask it. RE: buying physical commodities, I only know of buying physical gold - what about for others like uranium etc?

Also are you able to say what these ETFs are? I only have URA, NUKZ, and URNM on my list (and I don’t even own any of them lol)

[Dollar_McGavin]

@ponponwei

Ah yes this is what I figured! Not sure how best to ask it. RE: buying physical commodities, I only know of buying physical gold - what about for others like uranium etc?

Also are you able to say what these ETFs are? I only have URA, NUKZ, and URNM on my list (and I don’t even own any of them lol)

The best way to ask is just to ask

I go through several European banks for physical commodities (where I have the option to take physical delivery) and access to specific funds (not ETFs) in niche mining & production sub-sectors.

I’m also invested in individual names and not in these ETFs/ETCs (except PHAG), but I use these to track the market:

1. Physical Uranium: Sprott Physical Uranium Trust (SRUUF / U.UN). IMO, physical uranium was the place to be in the 1st leg up when it was priced at $20/lb and ran to +$100. The miners have greater upside potential vs physical uranium.

2. Physical silver: Sprott Physical Trust (PSLV) in Canada and WisdomTree Physical Silver ETC (PHAG) in Europe (this is the only ETC I’m invested in)

3. For Precious metals ETFs: Gold miners GDX, Junior gold miners GDXJ, Silver miners SIL, Junior Silver Miners SILJ

4. The uranium miner ETFs you listed are the major ones. The only one I can add is URNJ for junior miners but it also includes non-uranium miners as uranium mining is a tiny sector and there aren’t enough uranium miners in the world to populate an ETF proper.

[ponponwei]

Thanks! Adding these to my list!!!

@Dollar_McGavin

I go through several European banks for physical commodities

Would this be via futures? Or something entirely different?

PS sorry for completely derailing this thread!

[Dollar_McGavin]

@ponponwei

Would this be via futures? Or something entirely different?

PS sorry for completely derailing this thread!

No, futures are traded through exchanges, these are bank specific OTC products.

[ponponwei]

Oh wow TIL. I guess those are available only for certain clientele! What would you call that classification of products? Is there a term for it?

[Celyse]

@Dollar_McGavin

I’m not sure how much interest there is in this sort of topic, but I’ll throw it out here for now and see what kind of engagement we get.

Warning: This post is not financial advice. Please do your own due diligence and take responsibility for your own trading.

I’ve found that it’s possible to get a very comprehensive picture from just charts and data. It took a while for me to learn but I think I’ve gotten pretty good at it.

For example, let’s take speculative capital. Knowing where speculative capital will flow to next can point to the next head-turning bull market before it happens.

Currently, the lion’s share of speculative capital has flowed into the AI mania, in particular the semiconductor space, i.e. Nvidia and friends. Where will it flow to next?

I believe it will be in silver as it’s more of a speculative investment vs gold. The reasons are many from a secular precious metals bull market to global debt levels to secular commodities super-cycle that started in 2020 to etc etc.

Now I don’t have personal feelings nor attachments to silver, it could just as well as be in fertilizer stocks (which will also do well, IMO ). But I did build up positions in the silver space back when it was down at $20-$22/oz, currently at $32/oz.

This is just what the charts are showing and have been showing for several years now. The charts can tell you everything about the markets, it just takes time to learn their language. And the charts below speak volumes, IMO. Of course, my analysis took more than just a couple of charts, which I won’t go into here or else the post will read like a novel. The point here is that charts can show a whole lot more than just price and relative strength. It can show everything from what inflation will do next year, what the future economy will look like to future trends and more.

The charts below are ratio spreads of the SOXX Semiconductors ETF and Spot Silver prices. The first one goes back to 2011 after the SOXX bull market started and after the silver bear market started post the 2011 peak.

The 2nd chart shows a close up, where it looks like this spread has broken a 12 year long term channel and is about to rollover (downtrend = silver starts to outperform semiconductors).

I suspect that most people won’t even notice silver until there is a head-turning explosive move that ends up on financial media and analysts’ radars. When it happens, I anticipate a lot of speculative capital to exit semiconductors and rush into the tiny silver market.

Of course, I could also be wrong as well, but let’s see what the coming weeks and months bring.

Interesting analysis! Charts definitely offer a lot of insights, and your focus on silver’s potential makes sense given the current trends. It’ll be exciting to see if silver starts to outperform semiconductors as you expect.

[tonymason244]

Thanks very much for your detailed explanations in this thread - very much appreciated