I have recalibrated this composite and the following charts document the major signals at -20 and +17. Minor signals occur at -12 and +14. There were 2 runaway bull markets where this composite hit -20 too early. They were 1974 and 1980. However, inflation was already at a very high pace when these runaways occurred so it is easy to discern if any current market is in danger of running away. Here is the CPI since 1913. Notice that 1974 and 1980 were +10% periods and that today is less than 2%.
Here are the historical technical composite charts:
From Bloomberg: Trichet to keep buying bonds and Bank of England to blow $160B on stimulus. Both items, USD positive.
ReplyDeleteSteve with all the rumors about the silver market having been held up for years and actually there may be a massive physical shortage. Does that ring true to you or does the technicals reveal all?
ReplyDeleteEastern
ReplyDeleteSince Dec 2001 silver has increased by 6 times from 4.01 to 24+. Supply is coming on. Spec demand has been the driver over the last several years. With spec demand physical shortage can quickly become physical glut. This is not a fundamental trade, fundamentals follow spec excess.