Just a quick update on my gold/precious metal equity timing models. First, the wide price spread, high volume jump in prices that occurred back on Sept. following the Fed's non-taper event has been followed by a continued sell off in both gold and gold stocks. This is despite inflation expectations that have remained locked within a range, an indication that the Fed will continue to print money (did you have any doubt), and an acceleration in money supply growth. The latter has occurred, at least in my estimation, because of seasonal fluctuations.
Although I have taken a hit after upping my gold stock exposure following the Fed's non-event, I am somewhat comforted by the fact that the sell off has occurred on decelerating volume levels. This suggests that the selling pressure is abating, and if traders cannot push something down.....
With that, the timing models, shown below, remain in an accumulation phase while the risk gauge remains positive.
6 Month Model, current results -0.75 versus -0.3 one month ago
1 Year Model- -1.18 versus -1
2 Year Model- -1.8 versus -1.7
Risk (slope) coefficient- in a down trend but remains positive.
Although I have taken a hit after upping my gold stock exposure following the Fed's non-event, I am somewhat comforted by the fact that the sell off has occurred on decelerating volume levels. This suggests that the selling pressure is abating, and if traders cannot push something down.....
With that, the timing models, shown below, remain in an accumulation phase while the risk gauge remains positive.
6 Month Model, current results -0.75 versus -0.3 one month ago
1 Year Model- -1.18 versus -1
2 Year Model- -1.8 versus -1.7
Risk (slope) coefficient- in a down trend but remains positive.
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