One of the greatest worries for investors and savers – and also everyone living on fixed income – is inflation, which could accelerate to levels not seen since the 1970s. One of the asset classes that ofer effective protection from inflation are precious metals. Over the recent months, as many commodities have rallied strongly (Oats, Coffee, Oil, Natural Gas, Corn, Copper…), Gold and Silver spent nearly a year treading water and going nowhere. But yesterday’s COMEX closing prices rounded out a clearly defined bullish technical picture. On the occasion I decided to publish this morning’s TrendCompass Major Markets report in full.
In May I wrote that Silver looked poised to stage a bullish breakout from the consolidation pattern it’s held since last August. I also warned that it is never a good idea to trade in anticipation of such events, but instead to wait for either a pull-back which often does happen in such circumstances, or for the bullish break-out itself. Now we’ve had a pullback and with yesterday’s strong close the technical picture looks much more clearly defined:
Over the last 8 months we’ve had three successively higher troughs during this consolidation period. This indicates that there’s less and less selling pressure at lower prices and that the buying pressure builds up at higher prices. The I-System strategies read the chart in the same way, hence today’s buy calls. A more cautious approach would still entail waiting for the bullish breakout, but yesterday’s closing prices do round out a good case for going long Silver.
Gold chart is very different, but with yesterday’s close the technical picture equally presents a bullish case:
Here we have a clearly defined uptrend from late 2018 to August 2021 after which we get a downward-sloping consolidation channel. This is usually a bullish pattern, but often one that strains patience. It also included a sharp drop in late February which made the ‘consolidation’ appear like a bearish reversal. By now however, we have three successively higher troughs and a breaking of the downward-sloping resistance that formed along with the consolidation pattern. Again, I-System strategies produced a similar reading of the picture which now abundantly justifies taking the risk on Gold and Silver.
The report summary page:
After today’s changes, TrendCompass Major Markets exposure is summarized below:
TrendCompass reports are based on the I-System, probably one of the very best trend following models in the world today, proven through nearly 20 years of continuous use and an audited performance track record in hedge funds management, outperforming even the world’s leading managed futures funds (2007-2013).
Why systematic trend following?
I firmly believe that systematic trend following is the only valid answer to the problem of uncertainty – the toughest challenge facing all investors, traders and hedgers. Furthermore, market trends are far and away the most powerful drivers of investment performance as I have documented in a number of articles and videos. To lear more about I-System, Trend Following and TrendCompass reports, please visit my website I-System Trend Following or check out some videos on my YouTube channel, Markets, Trends and Profits.
While TrendCompass reports are priced for professional users, I’ve recently created two reports priced at $100 and $125 per month and which cover the main US equity indices, Treasury bonds, Gold, Silver and Bitcoin. A 1-month test-drive is always available free of charge. To request a free trial, please e-mail us at TrendCompass@I-System.com.
Alex Krainer – @NakedHedgie has worked as a market analyst, researcher, trader and hedge fund manager for over 25 years. He is the creator of I-System Trend Following, publisher of TrendCompass reports and contributing editor at ZeroHedge based in Monaco. His views and opinions are not always for polite society but they are always expressed in sincere pursuit of true knowledge and clear understanding of stuff that matters.
BOOKS & LINKS:
- “Alex Krainer’s Trend Following Bible” (2021)
- “Grand Deception: The Truth About Bill Browder, Magnitsky Act and Anti-Russia Sanctions” (2017) twice banned on Amazon by orders of swamp creatures from the U.S. StateDepartment.
- “Mastering Uncertainty in Commodities Trading” (2016) was rated #1 book on commodities for investors and traders by FinancialExpert.co.uk
- WEBSITE: ISystem-TF.com
- BLOG: TheNakedHedgie.com
- YOUTUBE CHANNEL: MARKETS, TRENDS & PROFITS
- LinkedIn: linkedin.com/in/alex-sasha-krainer-0b74ab1a