Finding Turning Points....
While this can be a suckers game there is a method to my madness at times. You must and I mean MUST listen carefully to central bank jawboning now. You must think that overbought and oversold mean very little at the time. It comes down strictly to central bank policy. Hidden agendas that can help you in almost any market.
For example the stock market ramping is designed to do certain things. The central bank policy is basically around demographics and the economy. You have an entire generation of boomers who are moving into the seventy year old bracket daily. This is significant. What are they going to live on in retirement while keeping the same lifestyle. Their really only option is stocks. If you own shares in certain larger companies that the central banks are buying then you will get your share of dividends that are paid yearly. At the same time it helps companies stay profitable with the ability to beat projections. This in turn allows further investment in the company. Obviously with low interest rates bonds and fixed income vehicles are not an option. Stocks could stay high for a number of years for this reason.
Recently the European central bank has expressed concern over the falling dollar pushing the EURO to new highs this year. That is enough for one to say "alright this is likely the peak for a period of time, if not a complete reversal to lows last seen in 2015. Gold is similar and so is oil. They are both at extremes. Not because price says so but rather if they get too high inflationary pressure will start and debt is more likely to become a cumbersome burden. Therefor I would not expect oil to rise much further from here or gold because the Dollar is likely to turn. Therefor treasuries will head in the opposite direction.
Do you see how the balance point of interest rates and Dollar strength or weakness has a profound effect on these other financial vehicles all basically because that is the way central banks want it to be. The range where oil is may be here to stay for a while until the central banks have time to see what happens to the economies around the world as a result of slightly higher prices of oil. Say the new range of oil is around 66 to 46. Makes sense right. Not too high or not too low.
You can see by the charts below that I put my money where my mouth was and it worked well. This is a gradual decline I should stress and won't happen overnight. The past certainly does not equal the future. That is one slogan you should imbed deeply into your brain. What should happen may not necessarily happen and can happen only if central banks feel it is the right thing to do. Cheers!
For example the stock market ramping is designed to do certain things. The central bank policy is basically around demographics and the economy. You have an entire generation of boomers who are moving into the seventy year old bracket daily. This is significant. What are they going to live on in retirement while keeping the same lifestyle. Their really only option is stocks. If you own shares in certain larger companies that the central banks are buying then you will get your share of dividends that are paid yearly. At the same time it helps companies stay profitable with the ability to beat projections. This in turn allows further investment in the company. Obviously with low interest rates bonds and fixed income vehicles are not an option. Stocks could stay high for a number of years for this reason.
Recently the European central bank has expressed concern over the falling dollar pushing the EURO to new highs this year. That is enough for one to say "alright this is likely the peak for a period of time, if not a complete reversal to lows last seen in 2015. Gold is similar and so is oil. They are both at extremes. Not because price says so but rather if they get too high inflationary pressure will start and debt is more likely to become a cumbersome burden. Therefor I would not expect oil to rise much further from here or gold because the Dollar is likely to turn. Therefor treasuries will head in the opposite direction.
Do you see how the balance point of interest rates and Dollar strength or weakness has a profound effect on these other financial vehicles all basically because that is the way central banks want it to be. The range where oil is may be here to stay for a while until the central banks have time to see what happens to the economies around the world as a result of slightly higher prices of oil. Say the new range of oil is around 66 to 46. Makes sense right. Not too high or not too low.
You can see by the charts below that I put my money where my mouth was and it worked well. This is a gradual decline I should stress and won't happen overnight. The past certainly does not equal the future. That is one slogan you should imbed deeply into your brain. What should happen may not necessarily happen and can happen only if central banks feel it is the right thing to do. Cheers!
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