Gold Finally Breaks Free Amidst S&P lnsanity

1. Gold FINALLY Breaks Free Amidst
S&P INSANITY

2. • Gold Being Stuck In A Maniacal Short Trend
• The Parabolic Performance Of The S&P – I
• Trading Gains And Losses
• The Average Number Of Trading Days
• Gold’s MACD Finishing The Week
• Weekly Gold Bars & Parabolic Trends
• Gold Hits 2-Month Peak On Dollar Retreat

3. Gold Being Stuck In A Maniacal Short
Trend
• Gold, after 18 weeks of being stuck in a
maniacal Short trend without price really
going anywhere.
• FINALLY broke the bonds of the M word
crowd by flipping to Long — but not
without a mid-week scare: more later on
that affair.

4. The Parabolic Performance Of The
S&P
• But we begin by assessing the stark INSANITY
besetting the parabolic performance of the
S&P 500, +25% year-to-date.
• It settled yesterday (Friday) at 4698 (reaching
4718 intra-day), a record closing high for the
seventh consecutive session.
• Such phenomenon has occurred but five other
times in the past 41 years!

5. The Parabolic Performance Of The
S&P - I
• Across all those years (i.e. from 1980-to-date),
what is the longest stretch of time between
all-time highs for the S&P 500?
■ a) eight months
■ b) just over three years
■ c) slightly less than six years
■ d) all of the above (for you
WestPalmBeachers down there)
■ e) none of the above

6. The Parabolic Performance Of The
S&P - II
• If having answered “e)”, you are correct:
the longest stint was almost seven-and-
one-quarter years from 24 March 2000
through the DotComBomb up to 13 Jul
2007.
• ‘Twas the complete antithesis of the
current paradigm of an all-time high
every single trading day.

7. S&P’s 12th Consecutive Day
• But wait, there’s more: those of you who were
with us way back in the days at AvidTrader
may recall our technically having “mild”,
“moderate” and “extreme” readings of both
oversold and overbought conditions for the
S&P.
• Well, get a load of this: yesterday was the
S&P’s 12th consecutive day with an
“extremely overbought” reading.

8. The Price/Earnings Ratio
• During these 41 years, that has only
happened once before, 36 years ago in
1985.
• And the price/earnings ratio then was a
respectable 10.5x: today ’tis five times
that much at 54.4x (!!!) easily more than
double the S&P’s lifetime median P/E
(since 1957) of 20.4x.

9. Trading Gains And Losses
• And still more: Every time the S&P moves
from one 100-point milestone to the next, ’tis
a FinMedia “big headline deal”, albeit the
percentage increase comparably narrows.
• Nonetheless, trading gains and losses are
measured by the point, not the percentage.
And from 1980-to-date, the S&P has gone
from 100 to now 4700, (i.e. through 46
milestones.

10. The Average Number Of Trading Days
• Upon having just achieved the 4600 level on
29 October, the average number of trading
days over these past 41 years to reach each
100-point milestone is 236 (just about a year’s
worth).
• But now from 4600-4700 took just five days!
Cue John McEnroe: “You canNOT be
SERious!!”

11. The Federal Open Market Committee
• ‘Course, every trend reaches a bend, if not its end. And
whilst the market is never wrong, something will the
S&P upend.
• You regular readers already know the “earnings are
not there” to support even one-half the S&P’s current
level.
• Moreover, ’tis said when the Federal Open Market
Committee does nudge up its Bank’s Funds rate, ’twill
be “Game Over” for the S&P, (something of which the
Fed is very fearful).
• “But mmb, even a rise from just 0.25% to only 0.50%
maintains a really low rate…”

12. The Federal Open Market Committee - I
• Nominally still low, yes Squire: but upon it
occurring, the Fed shall have doubled the cost
for every bank that comes to the borrowing
window, from which one can then ask banking
clientele:
• “How’s that variable rate loan workin’ out for
ya?” And thus falleth the first domino. And the
S&P.

13. The Taper of Paper
• Gold had a great day yesterday in settling out
the week at 1820.
• But as noted, ’twas not before a mid-week
scare.
• With Gold wallowing on “The Taper of Paper”
Wednesday — down at 1758 (a three-week
low) — the tried-and-true, widely followed
daily moving average convergence divergence
(MACD) crossed to negative.

14. Gold’s MACD Finishing The Week
• Such previous 11 negative crossings had averaged
downside follow-through of 86 points.
• Thus within that technical vacuum, another run
sub-1700 was placed on Gold’s table.
• What instead followed was a one-day whipsaw,
Gold’s MACD finishing the week with a positive
cross, and even better, the weekly parabolic Short
trend FINALLY being bust per the first Gold-
encircled dot in our weekly bars graphic:

15. Weekly Gold Bars & Parabolic Trends

16. The Daily MACD Back On The Positive
Side
• FINALLY too Gold had its first Friday in five of
not being flogged ostensibly by the M word
crowd.
• Should they thus have left the building, in
concert with both the daily MACD back on the
positive side and the weekly parabolic again
Long, the door is open for Gold to glide up
into the 1900s toward concluding 2021.

17. Gold Hits 2-Month Peak On Dollar
Retreat
• Gold prices extended a rally to hit a two-
month high on Monday as a retreating dollar
bolstered the precious metal's appeal.
• Spot gold rose 0.1% to $1,817.65 per ounce by
0127 GMT, having hit its highest since Sept. 7
earlier in the session.
• U.S. gold futures rose 0.3% to $1,822.30.

18. Gold Hits 2-Month Peak On Dollar
Retreat - I
• The dollar index was steady on Monday, but retreated
0.4% from a more than one-year peak hit on Friday,
lifting bullion's appeal by decreasing its cost to buyers
holding other currencies.
* The U.S. Congress passed a $1 trillion infrastructure
bill to repair the nation's airports, roads and bridges.
* Bank of Japan (BOJ) policymakers see the need to
maintain ultra-easy policy as inflation is rising only
modestly and wage growth remains feeble, a summary
of opinions from their October meeting showed on
Monday.

19. Gold Hits 2-Month Peak On Dollar
Retreat - II
• Easy monetary policy to spur economic
growth during the COVID-19 pandemic have
propelled gold prices to new highs over the
last two years, as near-zero interest rates cut
the opportunity cost of holding non-yielding
bullion.
* Physical gold demand in large consumer,
India, jumped during the festival season last
week.

20. Gold FINALLY Breaks Free Amidst
S&P INSANITY

21. THANKS FOR LISTENING
Gold FINALLY Breaks Free Amidst
S&P INSANITY