Dominant Trend is Now Up (TLO)

Model Notes: The bond model changed signal position to “up”  today. This comes after being short for the entire month of October. From a model perspective the, this market has been in a tight trading range and thus tough to call a direction. On the plus side, the model avoided the pitfall of a series of whipsaws that plagues many linear trend following models in these situation. So no: chop, chop, chop. The gold model is still short and waiting for more substantial selloff to develop.

Featured market rotation: Bonds for October (waiving goodbye soon)  VIX for November (looking for a starting signal now). Brazilian real for December. Gold is currently non-rotational.

Model Portfolio Signals: (Gold) Short= 10/20 (TSP=42.76), (Bonds/TLO) Buy =10/27 (TSP= waiting)

Note: TSP is calculated by using the closing price of the trading day after the signal day.

Nonlinear Trading Themes:

  • CTM151027gGold: The yellow metal has been selling off after the 10/20 sell signal but without much gusto. Support is currently at 111 (GLD basis). The current pause on the downside does not look like a classic technical bottom. The model is indicating lower prices. The model gold portfolio is still short.
  • CTM151027bBonds (Oct. Featured Market): The TLO model flipped to “buy” today. The model has been a staunch supporter of a Fed move before the end of the year. But now this has changed. If you look at the dominant monthly trend (bottoms on 10/8, 10/20 and 10/23), it is now pointing upward. So the Fed holds its fire a little longer. What will the country do? The model bond portfolio is now bullish.
  • VIX (Nov. Featured Market) Trading Signals (no chart shown yet): I starting looking for an entry signal recently and simply got non-trending readings. This has been positive for stocks. So far, no buy signal. Stocks should continue up for now. I am still searching for an entry signal.

Note: Technical analysis comments are based on interpretations of non-linear trading models, combined with chart price action.

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GH Garrett – Veteran Market Watcher for  © 2015, “Nonlinear signals that matter in gold trading.”