Archive for the ‘Metals’ category

The Short Bullion (SBUL.L)

 

It’s very tough to look at a positive metals case (commodity or metal stocks), if we have a negative case on GOLD. Our recent negative case on metals continues to deliver and now that Gold has reversed from key resistances, we won’t be surprised to see further negativity on the metals complex.

We have illustrated the Short Bullion (SBUL.L) case here. Short Bullion is the inverse of Gold prices. The instrument falls if Gold prices rise and vice versa. The Price of ETFS Short Gold (SBUL) changes daily by -100% the daily percentage change in the DJ-UBS Gold Sub-Index. The instrument gave a buy signal on 18 Dec 2011. The latest ALPHA carries…

1)Two new metal short cases that are on the F&O segment.
2)The latest rankings of the BSE500 Metal sector components.
3)Nifty update.
4)Signals on Short Bullion ETF (SBUL.L)

Our Jiseki Time cycles are seasonal patterns of strength or weakness in assets. They are derived from percentile rankings from 1 to 100. The higher the percentile more the chance for an asset to weaken and worst the ranking, better the chance for the respective asset to outperform. 100 is top relative performance and 1 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick. Jiseki is another name for Performance cycles, time triads and time fractals. The signals are illustrated as a running portfolio and as Jiseki Indices. These signals can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades.

Jiseki Interpretation. Signals are interpreted as crossovers between various Jiseki Cycles. All three Jiseki cycles (Jiseki 1,2 and 3) depict different time frames. Example: An asset is ranked above 80 percentile and all the three Jiseki cycles are pointing lower, this suggests a running SHORT SIGNAL. Our Jiseki Indices use different kind of exits based on price and Jiseki Cycles. We have color coded the (Jiseki 1>Jiseki 2) SHORT zones with brown sandy (burlywood) and grey (Jiseki 1>Jiseki2) for LONG SIGNALS.

Dr. Ionut Nistor is the co-author of Performance Cycles paper published in Kyoto Economics Journal in March 2009. Ionut is a professor of Corporate Finance at Babes -Bolyai University and a post doctorate fellow at the Kobe University in Japan. He is fluent in Japanese, Romanian and English.

The Bric Model from a Japanese Perspective
Ionut Nistor - Econohistory


Can Oil rise and Silver fall?

Realistically speaking, the answer to this question is both yes and no. If you understand that performance is different on different time frames. On one time frame (example 3 months) Oil can rise and silver can fall. While on another time frame (say 12 month) the difference between the two can narrow. So both respondents could say “see I was right?” This is what always happens in market. Both the respondents claim to be right because they don’t understand their different holding time frames. This is why the question itself is ambiguous.

Why don’t market participants see the ambiguity in any such question? Because they don’t expect accuracy in time. They don’t accept any tool or measure to illustrate polarized performance of assets in different time frames. Why don’t investors expect such accuracy? Is it because no such predictive tools exist or because they can’t exist?

The truth is that we never looked for such tools or measures. We assumed that if a trend starts for 6 months, it could very well persist for 12 months. Now this is where the problem lies. Most of us are momentum investors and just understand momentum. Most of us don’t understand cyclicality. So we never question that can performance of 6 months be different from performance of 12 months. Most of the time this is true, performance differ for different times. But there are rare occasions when two time fames could confirm the trend and this is when real strategies should be executed.

This is what is happening on SILVER (SLV) and OIL. Here we have illustrated Jiseki cycles for primary multiyear trends. Silver is a top performer on both multi week and multi month Jiseki cycles, while Oil is a worst performer on multi month and multi week Jiseki cycles. This means that Silver should underperform and Oil should outperform on both multi week and multi month periods.

The latest Alpha carries cases on Indian Oil companies, global commodities with levels, targets, projected trends and Jiseki cycles.

To read the report download the latest Alpha from our store.

Our Jiseki Time cycles are seasonal patterns of strength or weakness in assets. They are derived from percentile rankings of 0 to 100. The higher the percentile more the chance for an asset to weaken and worst the ranking, better the chance for the respective asset to outperform. The current agro complex comparison puts Cotton and Sugar at the top and sesame and wheat at the bottom near 10%. Such low percentile rankings make Sesame and Wheat attractive holds. To latest report carries the Jiseki cycles for the agro assets with targets and projections for wheat, soybeans, coffee, sesame and coriander.

Our Jiseki Time cycles are seasonal patterns of strength or weakness in assets. They are derived from percentile rankings of 0 to 100. The higher the percentile more the chance for an asset to weaken and worst the ranking, better the chance for the respective asset to outperform.

Alpha is a daily strategy signal product that gives trading and investment signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. Alpha is a part of the time triads analytics developed by Orpheus Research.

Coverage Global: Commodities, Currency, Stocks, Bonds, Indices


Is Silver going up or down?

Assets perform or underperform at a certain TIME. It can be hard finding that exact time, waiting for that exact TIME could be harder. Orpheus Jiseki (performance cycles) a.k.a Time fractals offer an integrated approach to look at TIME. For us any asset is at inflexion (when it reverses direction) less than 10% of the time, the rest 90% of the TIME the asset prices are trending or stagnating. However more important than timing the top or bottom of an asset is understanding what kind of top the trader prefers, a weekly top, a monthly top, an annual top etc.. Orpheus Jiseki can identify and classify such an inflexion point (bottom or top).

So is silver going up or down would mean more if we knew how long the precious metal is going down. Silver SLV intermediate Jiseki has reached 90% (a top ranking performer) and has a negative crossover. This suggests SLV is  ready to come down on a multi week basis. Even SLV primary multi month Jiseki is also near 80%. Multi month 80% readings are more significant than intermediate daily 90% readings because sustaining a multi year winning performance is tougher than sustaining a top quarterly performance. Apart from this Silver India is also in a Jiseki sell mode ranking at 90%. So for us silver is coming down for atleast  multi weeks now. Gold India and Palladium intermediate Jiseki is also negative.

On the energy front OIX (CBOE Oil Index) is a bit different from precious metals. Though OIX completing corrective is negative, which should push Oil 10-15% lower from current levels. On a multi month basis OIX is bottoming and should be hitting primary multi year lows soon. OIX is a multi year accumulate story. Oil has a 55% weightage in the DDP (Inverse commodity) ETF. On the short term DDP suggests higher for multi weeks (negative commodities) and on the longer multi year terms DDP has a negative Jiseki (positive commodities)

Enjoy the latest Alpha Global, Energy and Metals special.

Our Jiseki Time cycles are seasonal patterns of strength or weakness in assets. They are derived from percentile rankings of 0 to 100. The higher the percentile more the chance for an asset to weaken and worst the ranking, better the chance for the respective asset to outperform.

Our Jiseki Time cycles are seasonal patterns of strength or weakness in assets. They are derived from percentile rankings of 0 to 100. The higher the percentile more the chance for an asset to weaken and worst the ranking, better the chance for the respective asset to outperform.

Alpha is a daily strategy signal product that gives trading and investment signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. Alpha is a part of the time triads analytics developed by Orpheus Research.

Coverage Global: Commodities, Currency, Stocks, Bonds, Indices


Is silver the new gold?

 

There are a few reasons why silver cannot become gold. First, Gold is the sector leader not silver. Second, though both gold and silver were used as a currency, historically it’s gold that is the real proxy for currency. Third, since 1980s there are only on three occasions Silver has outperformed Gold (Fig 3.) for a brief period (1983, 1997, 2007, and 2011).

1983 was near the top of commodities. Just like equity, when markets top, it’s the small cap that is racing ahead of blue chips. It was a similar situation in 1983. Then in 1997, silver outperformance accompanied Dow topping. Silver was leading equity and when silver underperformed Gold, the ratio line (silver vs. gold) witnessed Dow falling with it down till 2002. We all know what happened in 2007 (Fig. 4). Now we are in 2011, the fourth occasion since 1980′s when Silver seems to challenge gold. This cannot last.

What does this mean? This means that it’s time for Silver to underperform Gold. It also means that sentiment should turn from confidence to caution when Silver underperforms Gold. Rising silver-gold ratio is a sentiment indicator suggesting confidence while a falling ratio line suggests worry and fear. Measuring the degree of fear is the harder task, but with VIX already at historical lows, markets into seasonally weak period, secular bull getting more than 24 months old, the sentiment indicator does not look too encouraging for Dow and US equity.

Above this the silver…

This article was written for ATMA.

Time Triads, Time Fractals, Time Arbitrage, Performance Cycles are terms coined by Orpheus Research. Time Triads is our weekly market letter. The report covers various aspects on TIME patterns, TIME forecast, alternative research, emerging markets, behavioral finance, market fractals, econohistory, econostatistics, time cyclicality, investment psychology, socioeconomics, pop cultural trends, macro economics, interest rates, derivatives, money management, Intermarket trends etc.

 


Sub 1000 Gold?

Considering our inflationary peak expectations in 2019 (Benner High), we think that Gold moving sub 1000 is an opportunity to accumulate. Now the question is more about whether it will happen and whether the reversal is already in?

Gold has already tested the 10 year log channel and seems ready for some intermediate correction. One easy way to see if sub 1000 Gold is likely is to follow the previous IV wave support rule. If prices break 1308 previous minor support that 1043 has a high chance to happen.
Even Silver has made a large potentially quarterly Key Reversal and should move below 30 for Gold sub 1000 levels. One may ask what if Gold and Silver are on the edge of a large bear market trend. Price confirmations are important. Expecting a bear market in Gold before sub 1000 gold is presumptuous. Above that the CRB commodity index and Brent still look in clear 3 primary wave structures, which should at best get sideways before moving to new historical highs. The larger commodity trend remains in a secular uptrend. Gold sub 1000 remains an accumulate opportunity for this decade.

This article was written for ATMA

For regular updates on metals and commodities, subscribe to Orpheus Research Update.

Time Triads, Time Fractals, Time Arbitrage, Performance Cycles are terms coined by Orpheus Research. Time Triads is our weekly market letter. The report covers various aspects on TIME patterns, TIME forecast, alternative research, emerging markets, behavioral finance, market fractals, econohistory, econostatistics, time cyclicality, investment psychology, socioeconomics, pop cultural trends, macro economics, interest rates, derivatives, money management, Intermarket trends etc.

 


The Dollar Collapse?

Now that EURUSD has broken a primary true trendline and heads to next resistance at 1.5, the dollar collapse is in the news. From a sentiment point of view the fall in dollar is nearly 12 month old and EUR has strengthened 25% against dollar during this period. This is a good time for sentiment to get bearish on dollar. If we go back in Jun 2010, it was EUR collapse that was in the news. And street talk was about EUR Dollar Parity. Sentiment rolls over with time. Now 1.5 is a key resistance for EURUSD and respective levels should also mark a sentiment extreme against Dollar. Above this the EURUSD price structure from Jun 2010 low does not seem to be a five wave trended structure. It looks more like a 3 wave corrective counter trend.

From a cycle point of view the weekly UUP Dollar ETF Jiseki cycles (red, blue, grey) are bottoming and suggesting that Dollar is more likely to bottom against global currencies than otherwise. Whether it take a few weeks or another quarter more is hard to say now. But when the dollar will reverse, the move should be secular and a larger one than what we have seen on 12 month EUR strengthening. Dollar could strengthen for a few years. What it means for European Union and what it means for the world at large, is something sentiment can not understand or visualize now. Sentiment like everything follows time. When the cycle is up, sentiment is up and vice versa. After 1.5 EURUSD we review.

In this latest Alpha Global we have carried Short Commodity ETF DDP daily and weekly Jiseki cycles. On the daily cycles DDP shows signs of bottoming while on an Intermediate time frame the commodity secular trend remains down. This means that even of commodity on an aggregate basis might fall, the larger multi year trend on commodities is still up. Copper, Sugar, Silver, Cotton are the top ranked over a quarter and hence most likely to continue underperformance. While Wind, livestock, Wheat, Cocoa are the worst commodities, which are likely to outperform. US Equity worst rankers (which are best potential holds and outperformers) are EXC, ERS, RTN, WPO. On Forex rankings US Dollar is the worst and Australian Dollar and Swiss Franc are the top rankers suggesting some underperformance on Australian dollar and Swiss Franc. The report also carries an Alpha Global hedge Portfolio.

 

Bibliography - Index

1: The Divergence Cycles0

2: The BRIC Model from a Japanese Perspective - Pre and Post Financial Crisis Review and Forecasts1

3: Time Fractals2

4: Temporal Changes in Shiller’s Exuberance Data3

5: Time Duration Decay in Romanian Capital Markets4

6: MTA Knowledge base – Performance Cycles5

7: Mean Reversion Cycles6

For regular updates on performance Cycles on Toronto Stock Exchange assets write to us today for a free trial for Orpheus Time Analytics.

Time Triads, Time Fractals, Time Arbitrage, Performance Cycles are terms coined by Orpheus Research. Time Triads is our weekly market letter. The report covers various aspects on TIME patterns, TIME forecast, alternative research, emerging markets, behavioral finance, market fractals, econohistory, econostatistics, time cyclicality, investment psychology, socioeconomics, pop cultural trends, macro economics, interest rates, derivatives, money management, Intermarket trends etc.

 


The inverted silver


We have inverted silver to have a better look in terms of what the exponential commodity is up to. The primary structure (Fig 1) suggests that prices are completing a 5 primary which equals 1.618 times of the 3 primary at current levels. Though we have no reversal signs yet, the climactic look suggests that we are in for an extreme which is not going to end very well for a section of market which likes extreme trading.

Fig 2 also illustrates a daily completing five legged structure. There is no reversal signal on Silver yet, but considering we are heading into a key price projection it’s imperative to understand the price structure and look for any potential reversals.

Prices have started to form a potential daily Key Reversal bar today (Fig 3). However, the subminor move lower does not look like a five wave structure (Fig 4). A break at 37.6 channel highs would suggest that we are in for a push till 37-36 and then a final push back to 40-41 when the current formation should reverse for at least a few weeks. It’s only then can we look for a large primary reversal. At this stage it’s best to wait for price confirmation and trade low exposure. Trading extremes is not for everyone.

To read more of such updates on subscribe to Orpheus Research Reports.

This article is written for ATMA

Time Triads, Time Fractals, Time Arbitrage, Performance Cycles are terms coined by Orpheus Research. Time Triads is our weekly market letter. The report covers various aspects on TIME patterns, TIME forecast, alternative research, emerging markets, behavioral finance, market fractals, econohistory, econostatistics, time cyclicality, investment psychology, socioeconomics, pop cultural trends, macro economics, interest rates, derivatives, money management, Intermarket trends etc.

The Dow Rieki

Dow Jones Industrial is not the best, but is near the top.  Being an index we don’t expect rankings to push higher till 10 or higher. The Rieki crossover is negative. We continue to looking at a topping performance case on Dow as it moves higher. Irrespective of popular belief Dow should underperform the top 50 global assets.


Top 50 Global Jiseki Rankings

Natural Gas is still the worst and Silver, Coffee, Sugar, Copper are the best. The surprise is EUR USD which is one of the worst performing pairs. The pair has not bottomed yet, but this case is not very encouraging for our iii of 3 on dollar. We will keep you posted.

Enjoy the latest Jiseki integrated rankings. We have integrated multiple degree of Time to create Jiseki Rankings.

Rieki and Jiseki are Japanese words for performance and performance cycles. Since we are speaking of multiple degrees of time, we use Rieki for performance cycle on one degree of Time and Jiseki for an integrated performance cycle for multiple degree of Time. Performance cycles are created from relative performance ranking. The above chart is the integrated ranking for Indian Health care sector. Cadila, Dr Redy’s and Sun are the top rankers. While Divi’s, Piramal and Cipla are the worst rankers. Orpheus performance cycles invest in the worst and sell the best. This is why the top short opportunities for Indian Health Care are respective top rankers and vice versa. To understand the strategy working try out Orpheus Research Alpha Products.


Gold Silver Index Rieki ready to reverse?

Alpha Romania. Mid Economic: As anticipated VESY delivered positive returns moving up by 13%. The RIEKI and LOSO (trending system) remain positive. The mid economic sector consists industrial majors. Alpha also delivered in case of short Armatura, which dropped 15%. Condmag remains a bottoming stock ready for accumulation. And Electroaparataj and Electro Arges remain overstretched and potential underperformers.

Alpha is a daily strategy signal product that gives long only, short only, pair trading signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are carried over minor (10-30 days) and intermediate (above 30 days) time frame. The signals are illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. This is a part of the time triads analytics developed by Orpheus Research.
Naked and/or pair strategies are not riskless strategies. Time arbitrage portfolio legs should be risk weighted before any implementation. Please mail us for a detailed working or consult a local financial risk manager to execute these pairs. For more details please subscribe to the Orpheus Research products.