Sunday, January 25, 2015

Three Charts to Watch

A bit of a hodgepodge of charts to review. I'll start with my favourite of the bunch: the relationship between oil and gold prices. Peaks in the relative price between these commodities have historically provided swing lows for commodities - oil in particular. Certainly, sufficient time has passed between peaks to mark a major low.


The relationship between Nasdaq Highs and Lows doesn't suggest we have reached any major inflection yet. Ideally, Nasdaq Lows should spike above 100 to mark a major low, with 200+ for 'back up the truck' style low.


Nasdaq breadth is also stronger than where historic sell offs typically occur, although developing bearish divergences have much in common with those in 2007. Maybe the second half of the year will deliver the ultimate peak for the 2009-15 advance(?).


With the exception of the gold:oil relationship, the other charts are long term plays that have some way to go. In the meantime, oil looks to has reached a 'buy' point for those willing to grab the nettles.

You've now read my opinion, next read Douglas' and Jani's.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com, and Product Development Manager for ActivateClients.com. You can read what others are saying about Zignals on Investimonials.com.

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