Perhaps 2022 marks the worst on record, or at least the past 100 years. Nevertheless, we’ve all witnessed extraordinary selling pressure in what has historically acted as a safe-haven asset.
Despite the dismal returns and destruction of the traditional 60/40 portfolio, the bond market continues to instill valuable lessons in those willing to listen and learn.
Check out these three poignant reminders courtesy of the bond market…
The chart below highlights the five-, 10-, and 30-year US Treasury yields finding support at their respective year-to-date trendlines and pivot highs from the spring.
With only a few trading hours left in the year, I’m ready to turn the page. I’m sure plenty of you can relate.
In the spirit of looking ahead to a bright and beautiful 2023, I want to share seven of my favorite commodity charts for January.
No grand thesis, just seven potential setups that have my attention heading into the new year.
1. Sugar
Sugar futures print a potential failed breakout after coiling within a tight range since the summer of 2021: The lack of upside follow-through accompanied by a bearish momentum divergence warrants caution.
We run through nearly 4o charts, breaking down the key levels and intermarket relationships, suggesting Gold could hit 5,000.
In this update, I’m going to share two of my favorite charts.
Plus, I’ll reveal one mining stock setting up for a buy signal.
First, Gold outside the US presents a very different picture.
Yes, the USD dominates global trade. And yes, we want to witness a break to fresh all-time highs priced in US dollars. But when we look around the world at other major currencies, Gold has already broken out!
The USD/JPY tested its 1998 highs marked by the Asian Financial Crisis. The British pound revisited its all-time lows. And the euro fell below parity versus the US dollar for the first time in twenty years.
But where does that leave the King Dollar heading into Q1 2023 now that it has fallen almost 10% off its September peak and many global currencies have reclaimed key levels?
Though these contracts rarely find themselves on the front page, their upside resolutions provide an important commodity-trading roadmap heading into 2023.
Plus, their relative strength reveals insight into the underlying nature of the current market environment.
Check out commodity subgroup performances anchored from Sept. 26, when the US Dollar Index $DXY peaked:
That’s what the Bank of Japan (BoJ) did yesterday as its former yield curve control policies became untenable. After intervening to keep its 10-year yield below 0.25%, it shifted the ceiling to 0.50%.
Naturally, the yen responded in earnest. It posted an explosive rally following the BoJ policy shift, gaining more than 500 pips against the dollar.
But where does that leave the USD/JPY heading into 2023?
We all learn how to fall – the sooner, the better.
As adults, we forget this is one of the first skills we learn early in life. For better or worse, my one-year-old reminds me daily.
He’s amazing.
Yes, I’m one of those proud, doting fathers. But his coordination and acrobatics keep both of us out of the pediatric ER (and me, the doghouse). He pops right up whenever he hits the ground and keeps chasing his older brother.
Pure gold.
Since my mind is always lost in the charts, his agility and doggedness remind me of gold’s resilience during the past two years.
You often hear us refer to markets correcting through price or time. It’s an important concept that can reveal underlying strength.
The dual-pane chart of copper and gold futures presents both:
