Interest rates to bottom! (TBT)

July-Aug Rotations: Core Mkt = GLD, Featured Mkt= TBT

Signals: GLD = Buy 8/4 (TSP= 127.55), TBT= Long 8/09 (TSP= waiting).

Model notes: The gold signal featured a next day jarring drop but the actual trade would have been at the next day’s close (TSP), which means after the one-day drop. So the model signal was actually positive at the close of today! The interest rate model buys today (TSP pending). So far (and I never get tired of saying this) both models are still in sync with their respective markets!

Note: The TSP (theoretical Signal Price) metric is calculated by using the ‘close’ price of the trading day FOLLOWING the signal day (giving you plenty of time to take the signal).

Note: The following comments are based on using technical analysis to ‘flesh out’ our nonlinear trading signals.

Nonlinear Trading Themes:

  • CTM160809gGold Trading Signals (Core). Gold model issued a buy, the drop proved to be a confidence shaker, but prices bounced above the signal TSP (TSP= 127.55). So all looks good. We expect support at the 127 level. Gold model is positive.
  • CTM160809bInterest Rates (Featured). The rate model buys on today’s weakness (hoping for a good TSP tomorrow). Look for support for the TBT near 30.20. If you take the current signal with the previous signal you get a theme that interest rates are on a gentle up-trend. A gentle up move in rates should not be a drag on stocks.


Premium Research notes:

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Take a minute to peruse the US Equities tab. I posted the S&P 500 trading signals postmortem for the recent March-April time period (approx. as it took about a week to generate a signal at the beginning). Plus 134 Points. Great stuff!

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GH Garrett – Chief Market Analyst for  © 2015-2016, “Nonlinear trading signals that matter in gold (and interest rate) trading.”