Friday, July 26, 2013

How Far is Gold Off Course?

By Frank Holmes US Global Investors

Gold has been in extremely oversold territory lately despite drivers for the metal remaining in place.
Here’s a different way to look at how far gold has been off course. The chart below tracks the correlation of the price of an ounce of gold to global liquidity, with global liquidity defined as the sum of the U.S. monetary base and the foreign holdings of U.S. Treasuries. Since June 2000, as the U.S.’s monetary base and foreign holdings increased, so did the price of gold.

The correlation suggests the current level of liquidity supports a gold price of $1,780 per ounce, well above the current spot price around $1,300.


I am unsure of the validity of this correlation but the thesis seems in the ballpark. Additionally, the time period that analysis used was unstated in the original article. There may be some work in my future.

Building a Disruptive Corporation

Rogers On Agriculture, Commodities, Future Expectations

Yes, I admire Jim Rogers

Speaking to attendees at the fourth annual Innovative Alternative Investments conference in Denver yesterday, Jim Rogers   said “I’ve never seen a bull market [in any asset class] that goes on forever,” Rogers said. “There may be one, but I’ve never heard of it.”

Speaking of the current bull market in U.S. equities, Rogers told advisors, “Enjoy it, but be prepared. I do know it will end, but not when. We’re getting close to the end."

The day that happens won’t be a pretty one. “When it ends it will be a big mess,” he continued. “This will be worse than 2001 and 2008-2009.” - via The Financial Asvisor Magazine

Seven Surprising Truths About the World

A nice rebuttal of sorts to the views expressed by Grantham here. Although I said I agree with Grantham, my views lie somewhere between.

Thursday, July 25, 2013

Dire State of American Innovation- Clayton Christensen

S&P 500 Price/Volume Heat Map- 7/25 Trading Day Edition

One more quick update. All the sectors gained in today's trading, leading to a 30 basis point increase in the value of the S&P 500.

The price/volume heat map paints a different picture of the supply and demand in the market. Besides utilities, which had positive demand dynamics, the remainder of sectors exhibited more neutral stance as to the intersection of price and volume.

S&P 500 Price/Volume Heat Map- 7/24 Trading Day Edition

Just a brief overview here. The market Wednesday declined by about 40 basis points with all sectors losign ground except for technology.

Although the price of the technology sector gained, the supply and demand picture was less positive, as the weighting skewed more neutral to negative. Outside of tech, discretionary and healthcare stocks showed more neutral supply/demand stances while the remainder of the sectors had a negative skew.

Volume Off the High- 7/25 Trading Day Edition

More than few names coming off the high with volume in trading today. Somewhat odd considering the market finished in the plus column

Volume Off the High- 7/24 Trading Day Edition

Still seeing more than few names come off of the highs with volume

It Is All About the Fundamentals....

Via ZeroHedge

High Volume High- 7/25 Trading Day Edition

Wow, a lot of companies making new highs on volume.