Paired investment

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/02/20180226-DOWvsGLD.png” description=”Pared investment: Dow vs. Gold. When stock markets plunge, the money previously invested in stocks would like to park at a safer harbor, such as gold. Therefore, the two curves show negative correlation.” source=”http://www.economicsignature.com/wp-content/uploads/2018/02/20180226-DOWvsGLD.png” title=”Pared investment”]   There are many types of markets, such as stocks, bonds, currencies,…

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Hiking interest rate impacts price-earnings ratio in stock markets

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/02/20180223-Dow-PE-ratio.png” description=”P/E ratios and yields on major indexes. ” source=”http://www.economicsignature.com/wp-content/uploads/2018/02/20180223-Dow-PE-ratio.png” title=”Hiking interest rate impacts price-earnings ratio in stock markets” ]   Our previous article (Interest rate outlook) has addressed that the interest rate will be moving up. When the rate is increasing, assets will be reevaluated. How? Let’s begin with…

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Symmetric volumes in Dow Jones

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/02/20180222-symmetric-volumes.png” description=”In March 2009 when the market reached its lowest after the 2008 financial tsunami, there emerged a largest volume. Since 2017 till now, almost equal sized large volumes have revived again. The symmetric volumes are by no means accidental. In fact, the main driving forces (i.e., institutional traders)…

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Hiking interest rate hammers real estate market

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/02/20180222-IYRvsRate.png” description=”The chart compares the 30-year interest rate with the real estate market (IYR). The two curves show the opposite moving directions, and the interest rate is a crucial signature to the real estate market. Since middle 2016, the interest rate has been inching up from its long-term bottom…

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Gold or Go?

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/02/20180219-GLD-vs-SPY.png” description=”The blue circles show that, when the stock market (SPY) tanked in the 2008 financial crisis, the price of gold (GLD) surged dramatically. The surge remained till SPY was ready to break out the previous high during 2013 – 2014 (the yellow circles in the figure). Then, GLD…

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Be patient for trading signals

  Although investment and trading is not a rocket science, many people have summarized their winning strategies. You can shop any books on Amazon. You also can learn investment concepts and trading strategies from many websites, including Economic Signature. Strategies may be based on fundamental analysis, economic trends, and/or technical…

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Escape from GE trade

[wp_lightbox_prettyPhoto_image link=“http://www.economicsignature.com/wp-content/uploads/2018/02/20180218-GE-weekly.png” description=”In mid-November 2015, there were large volumes, as shown in the daily chart and weekly chart.  However, such large volumes did not drive a price surge. Shortly after, GE experienced a correction. In early 2016, GE announced operating loss and moving its headquarter from Connecticut to Massachusetts. Since…

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Interest rates foretell problematic economy

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/02/20180217-10vs30-year-rate.png” description=”Before October 2017, the rates of the two bonds have a difference of about 0.50%. A quick analysis shows that since October 25, 2017 the difference has started to narrow. The rate difference gradually shrinks to about 0.25%. The narrowed rate difference will induce problems. For instance, banks…

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Dow will see correction down to 22,050

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/02/20180216.png” description=”The resistant band around 22,616 of Dow for the following months has been established on Jan 28, 2018, suggested by the gap on Jan 30, 2018. Although the market is bouncing back recently, it may test around the resistance and sell off again. The following support band we…

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Interest rate outlook

[wp_lightbox_prettyPhoto_image link=”http://www.economicsignature.com/wp-content/uploads/2018/02/20180216-interest-rate.png” description=”During the 1970s oil crisis, the interest rate was gradually pumped up, reaching a high extreme in 1981. Afterwards, the interest rate started to slide over the following 35 years. Within the past 30 years, the rate basically followed a well established down track. When the rate climbed…

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