Gold is on the verge of breakout

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/04/20180413-GLD.png” description=”Gold has been forming a big bottom since the 2012 crash. The formation of the bottom began in 2013, and it’s pattern is a gigantic head-shoulders bottom. If you just look at the the chart from 2016 to today, its pattern is a triangle in the bottom level. Typically,…

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Small W bottom in Dow Jones

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/04/20180406-DOW.png” description=”Dow Jones had a small W-bottom, and it bounced back. From the calculations, the first target of the bounce is 23,632, and the second target is 24,260. However, the size of the current head is much larger than this W-bottom, so the second target is not likely reachable…

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Critical point

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/04/20180403-SP500.png” description=”The weekly chart of S&P 500 already showed a flag, precisely a bear flag. While the market is moving down, it encounters a strong support around 2,550 (+/-25). However, we keep seeing lower lows and lower highs, so the bearish trend will remain and this support cannot sustain…

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The winner of the second round trade wars is China

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/04/20180402-ChinaLivePig.png” description=”China is the largest country consuming pork and importing pork. Since pork comes from live pigs, let’s look at what happened to live pigs in China. With reference to the above chart, the price of live pigs in China abnormally drops 30%. To rescue the Chinese pig farmers,…

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Market will pause a bit

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/03/20180323-SP500.png” description=”S&P 500 will hit a support area, which is marked as a rectangle in the S&P 500 chart. Look like the bear will take a break. The market may bounce back, or stay in the support area to have a sideways walk.” source=”http://www.economicsignature.com/wp-content/uploads/2018/03/20180323-SP500.png”  title=”Market will pause a bit”]…

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M head in S&P 500

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/03/20180319-SP500.png” description=” The chart explains itself. S&P 500 forms an M head. Further, the most recent top forms an isolated portion, which signals an island reversal. When we connect the lows in February and in early March, a neck line can be drawn. If S&P 500 cannot stand above…

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Wave of bankruptcies

Toys R Us used to be a wonderland for many kids. Unfortunately, it went bankrupt. Since the 2008 financial crisis, we have seen failures in top retail stores: Circuit City, Linens-N-Things, A&P (the Great Atlantic & Pacific Tea Company), Sports Authority, and Radio Shack. Most people think  Toys R Us was…

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The winner of the first round of trade wars is the United States

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/03/20180310-SP500.png” description=”Many people think stock markets as a proxy for economy. Since Trump announced the tariffs on aluminum and steel imports, S&P 500 has bounced up about 5%. That means, investors hold an optimistic view on the current round of the trade wars.” source=”http://www.economicsignature.com/wp-content/uploads/2018/03/20180310-SP500.png” title=”The winner of the first…

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Short-term bullish?

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/03/20180309-SP500.png” description=”S&P 500 has a short-term resistance at 2,810 (due to a small gap) and a long-term resistance at 2,850 (due to another large gap). Today, the rally leaves another gap between 2,741 and 2,751 as a support. If the market will keep upping, it may slide down to close…

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Fight with China by depreciating US dollar

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/03/20180308-USDCNY.png” description=”China owns about USD $1.2 trillion U.S. bonds. This amount costed China about Chinese Yuan (CNY) $7.8 trillion, assuming that the exchange rate was CNY/USD 6.5:1. Trump administration can intentionally depreciate the US dollar for a while, leading the exchange rate down to a low level, say 6.0:1. In the…

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Cryptocurrency play

A cryptocurrency is a digital currency based on encryption. Frequently called a virtual currency, it doesn’t have a physical form, but would only exist on computers. Its transaction history is recorded on many computers to avoid fraud. Every transaction of a cryptocurrency is recorded in a long string of blocks…

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Trump is a gray rhino

“Black Swans” are hard-to-predict events that cause chaos. Examples include terror attacks. “Gray Rhinos” are obvious dangers but often ignored by most of people. Every step made by President Trump draws global attention. It is likely that Trump will be the largest “gray rhino” in global financial markets this year…

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Learn from Germany’s DAX index

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/03/20180302-Germany-DAX.png” description=”DAX reached its peak on January 23, 2018, one week earlier than Dow Jones index. Then it dipped as a falling knife. It created two gaps, which haven’t been filled yet. When it broke down the 12,850 neck line, the southern run accelerated. After it bounced back to…

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S&P500 short-term support and resistance

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/02/20180228-SP500.png” description=”From mid-December 2017 to January 31, 2018, there existed divergence between price and volume (see the yellow line), suggesting a reversal from the top. During the following 1-3 days, the short-term support should sit at the low 2,697 of the previous 3 days; if the price breaks down,…

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Commodity runs up

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/02/20180227-DBC.png” description=”Commodity (DBC) is sitting at the bottom for a while. Although the commodity index broke up few months ago, the surging power has not been strong enough. Once another selloff takes place in the stock markets, commodities have a great potential.” source=”http://www.economicsignature.com/wp-content/uploads/2018/02/20180227-DBC.png” title=”Commodity run”] While the stock markets…

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