Credit deflation and the reflation cycle to come (part 2)

[Harley]

Another monthly chart, this one for the S&P.  Shows just how long the Stochastic indicator can stay in the "overbought" zone (over 80) once there.  The last time it was a clear initial buy was 2009!  The weekly chart was a little more forthcoming, but each buy signal there was not conclusive so a hard one to get into once it was off and away, especially as most would have expected a reasonable correction.  Insane!

[Funn3r]

On 04/01/2020 at 10:14, Errol said:

That's a bloody strange graphic.

Why has Turkey got the biggest arrow when Russia bought the most gold?

[subutai80]

On 05/01/2020 at 19:01, Tdog said:

Why is the price of Palladium rocketing?... if it looks like a bubble and all that

https://www.bullionbypost.co.uk/palladium-price/alltime/ounces/GBP/

 

Happy to pick up platinum at this ratio.

[BadAlchemy]

6 hours ago, janch said:

I noticed today we have a pawnbroker (Ramsdens) which appeared over the weekend.  Is this a sign of the times?

I noticed a "Cash for gold" sign appeared along a high street near me today. Reminded me of 2011 when these places popped everywhere, followed by everyone in the office talking about buying gold, rather than talking about football, then (on that occasion) shortly followed by the price of gold falling steeply ! 

[Harley]

Monthly cable (GBP:USD) chart.  Stochastic getting close to 80 so may turn down soon (with price), as it typically has in the recent past when getting to this level, or alternatively meander around this level (like in 2003 to 2005), providing support for a further rise in price.  MACD is currently a bit flat though apart from a recent small uptick.  I could equally paint a picture of continued range bound price moves, with the historic 1.4ish support level again acting as resistance as in Feb'18, or a bullish double bottom preceding an eventual breakout.  Either the indicators have not been kind (I had a buy signal in early 2019 (which would have been a disaster!) but again later in this year) or they are drawing out one solid bottom - sometimes there is a bullish setup where a buy signal is initially followed by a retrenchment.  I've superimposed the Dollar Index (DXY) onto the chart in orange - getting closer to the start of another cross, which would be bullish for GBP?  Take yer bets!

 

[Harley]

Monthly GBP:EUR chart.  An interesting one as it shows a somewhat classic divergence between price and the technicals culminating in a bigish-move correction/volatility.  Price was falling from Sep'17ish while the momentum based technicals (both Stochastic and MACD) were getting stronger (even before then), culminating in the uptick in Dec'18.  The stochastic subsequently collapsed and then recovered sharply but the MACD was only dented and is still ascending.  Things may possibly now weaken a bit given the overbought Stochastic.  But how serious?  Price has cleared some historic support/resistance levels and is now hovering around some others.  A shake out and/or consolidation prior to a move up?  I'll be watching the MACD which is still ascending but is still nice and tight and not giving the game away.

[Majorpain]

3 hours ago, Harley said:

Another monthly chart, this one for the S&P.  Shows just how long the Stochastic indicator can stay in the "overbought" zone (over 80) once there.  The last time it was a clear initial buy was 2009!  The weekly chart was a little more forthcoming, but each buy signal there was not conclusive so a hard one to get into once it was off and away, especially as most would have expected a reasonable correction.  Insane!

Apple's going vertical on the long term charts, doubling the market cap ($600-650bn) in one year is crazy, probably not surprising that when the fed prints $600bn in the last 3 months an unhealthy chunk makes its way into the stock market.

Venezuelan/Caracas stock market is probably how it eventually ends up, 200,000% gain ftw!

[Harley]

The monthly gold chart in USD.  Not much use to us as we need that in GBP but worth a look for the chart patterns.  Now I love me gold so am totally biased, hooked on its glimmer as it were.  Now that to me is, as I have oft said for some time now, a lovely bullish cup and handle chart pattern which, if so, ain't yet over.  Not only that we've just had an interesting pattern Aug'19 to Nov'19.  Is that a bullish flag pattern I see before me?  Would fit with the continuation of the cup and handle.   The momentum indicators (Stochastics) are however elevated but they were also during the run of 2009 to 2011.  The MACD's looking good.

The story looks very different in GBP though where thanks to currency (Cable) moves, that cup and handle chart pattern is far further advanced, telling us we should have been holding gold, not GBP, since Sep'18.  Shows why we need to be looking at valuations in our home (the one that pays the bills) currency.  Also look at that massive divergence between price and the technicals since Nov'16.  Sure, both were falling but the technicals fell far harder than price. We've had the (very) long retrace and the subsequent blow off.  But is the party really over for gold in GBP?  Overall, the technicals are pointing down, but with a recent blip up (which did very nicely last time).  MACD has pulled back but has not been violated with a cross and RSI has just pulled back to trend.  Are we topping out or consolidating for another leg up?

 

 

[Harley]

15 minutes ago, Majorpain said:

Apple's going vertical on the long term charts, doubling the market cap ($600-650bn) in one year is crazy, probably not surprising that when the fed prints $600bn in the last 3 months an unhealthy chunk makes its way into the stock market.

Venezuelan/Caracas stock market is probably how it eventually ends up, 200,000% gain ftw!

And Apple's most recent sales growth was what?  1% to 2%?  Insane!  

[Harley]

And onto the poor man's gold, silver.  The monthly chart in USD to start.  Funny old one this with cycles of divergences between price and the technicals.  Price was falling from mid 2014 while MACD held it's line.  Then we had the resolution of that divergence to the upside in 2016.  A somewhat similar story since and are we now seeing another resolution?  Certainly silver, in an early cup and handle chart pattern or not, has a lot of catch up to do to gold if the historic ratio is to re-assert itself.  Is this the sleeping giant entering the same foothills as in mid 2008?  All a bit glacial but then who's been looking at PMs for all these last few years what with Apple and Co?

And monthly silver in GBP.  Similar but even more so.  If that's a cup and handle chart pattern, then she may well blow capt'n!

[Harley]

And finally for tonight, commodities in the form of the monthly CRB index in USD.  They certainly are historically cheap and have been going nowhere for a long time, something sufficient to perversely pique our interest.  The technicals are currently pointing upwards but then there is some space before hitting long term resistance so wake me up nearer the time.  Except!  This is just a measure of the overall commodity picture from metals to agriculture to energy.  The devil is in the detail.  The duck may be calm above the water but them feet may be paddling hard!  For example, despite the noise, has oil (WTI) been in a stealth trade-able consolidation for the last year with triple bottoms and a nice (now concluded) triangle chart formation?  And then there's been that lovely palladium.

[Yellow_Reduced_Sticker]

On 28/12/2019 at 23:52, DurhamBorn said:

@Yellow_Reduced_Sticker you will be pleased to hear im back on the 75% off food shopping.Tesco tonight was empty and i got loads.Lots of really good beef for casseroles reduced £5 to £1.25,loads of corn fed chicken breasts 75% off,lots of cooked chicken breast you can freeze,perfect for curries/pasta bakes etc.I got around 4 weeks main meals sorted for around £18.I pushed the boat out though and spent £50 on a pair of curtains on Facebook marketplace last week,they are superb though and were likely £200/£300 when new,the house was really posh where i got them from.That marketplace is amazing for getting quality stuff for really cheap prices.hope your settling into things in the new place.

@DurhamBorn GLAD ya doing well on the reductions at Tesco, are you getting any tescos "Finest Range" as that seemed to have been knocked on the head... I've only been to mine here a couple of times as its out the way and a 30 minute or so drive, besides i get most of me stuff at waitrose when i go out to the main town, yeah agree with ya in regards to ready-mades, total CRAP!

 

I don't bother buying ready-mades ... case in point i bought 1 packet of some fancy waitrose, Xmas pork/pastries £6.49 ...down to £1.69 AND what a load of sh*t NOT even worth 1p near on throw them out, BUT after spending money in addition to the gas cost i had to force 'em down me gullet!!!

 

Pooped in to waitrose the other day, and they had bugger all meat/fish/veg wise ...all they had was cakes so i bought the LOT...thats all i had in me basket, ya should of seen the look of the cashier HA-ha! 

 

 

Yep settling in OK, though had a depressing lonely xmas/new year cos of issues with a family member, so never posted around that time as i need to be in my chirpier mood like NOW! Hay-hoo life goes on...

 

@Harley The mention of Argos ...now most on here will know that i'm the TIGHTEST Wad on this board, i don't buy f***All NEW, everything 2nd-hand, even cloths, only thing bought new cloth wise is socks&boxer shorts and i bought enough when they were on sale to last me for the next 20 years!

 

Anyway...last 3 items i bought NEW in the last 2 years were: grass strimmer, heater & bedding sheets, ALL from Argos, mainly cos they had a deal going, also a piece of piss to order online and pick it up from the local Sainsburys store!

 

SO if a cheap-skate like me is buying his new items ONLY from Argos, then sainsburys shares may be worth looking into, however i don't like sainsburys supermarket because i can NEVER get any reductions there! so as ever...DYOR!

 

Logged into my HL acc, and its up 18% ! (not counting divis) Not bad as the portfolio is only around 18 mounts old, (Sibanye Gold UP a mental 233% ) ...so a BIG thanks go out to YOU @DurhamBorn for sharing your knowledge ...

 

I wish YOU and ALL the Good FOLKS on this thread here:

 

GREAT Health & Prosperous New Year!

 

 

 

 

[RickyBacker]

8 hours ago, Errol said:

I have physical palladium coins (from when the price was closer to £600). But not enough and wish I had purchased more.

I have a palladium wedding ring... I think it was about £400 an ounce at the time. Wish I'd purchased more!

[Harley]

44 minutes ago, Yellow_Reduced_Sticker said:

@Harley The mention of Argos ...now most on here will know that i'm the TIGHTEST Wad on this board, i don't buy f***All NEW, everything 2nd-hand, even cloths, only thing bought new cloth wise is socks&boxer shorts and i bought enough when they were on sale to last me for the next 20 years!

 

Anyway...last 3 items i bought NEW in the last 2 years were: grass strimmer, heater & bedding sheets, ALL from Argos, mainly cos they had a deal going, also a piece of piss to order online and pick it up from the local Sainsburys store!

 

SO if a cheap-skate like me is buying his new items ONLY from Argos, then sainsburys shares may be worth looking into, however i don't like sainsburys supermarket because i can NEVER get any reductions there! so as ever...DYOR!

Excellent.  Think I shall buy some more Sainsbury's.  Takes yer money in Argos and gives yer nothing back in Sainsbury's.  Perfect, nice and tight, as tested by the YRS!!!!  That Perkbox thing my partner gets with her professional body subscription works a treat at 6% off in Argos.  Plus one free movie a month with Rakuten (a bit lame film wise though).  And yep, Argos is pretty active with discounts at certain times.  Defo worth keeping an eye on.  I'm off to try Gumtree this year as a seller and purchaser.  Apart from Council and motor tax, VAT is about the only tax left for me to conquer so second hand will do nicely.  Happy to pay tax when they're happy to spend it wisely.      

[MrXxxx]

7 hours ago, RickyBacker said:

I have a palladium wedding ring... I think it was about £400 an ounce at the time. Wish I'd purchased more!

The problem there is the counterparty risks...the cost of a divorce soon erodes your assets over a very short time! :-)

[MrXxxx]

10 hours ago, BadAlchemy said:

I noticed a "Cash for gold" sign appeared along a high street near me today. Reminded me of 2011 when these places popped everywhere, followed by everyone in the office talking about buying gold, rather than talking about football, then (on that occasion) shortly followed by the price of gold falling steeply ! 

Are we about to see this again?...the price ascends, oversupply (this time as a result of deflation and companies having to sell off their gold reserves/needing FIAT to service their high debt levels compounded by increasing base rates), and then a price crash...hope so, as I `missed the bus` the last time pontificating/trying to understand the investment whilst the rest of you `filled you boots`!

[DurhamBorn]

The seeds all getting set now for the reflation ahead.It always starts "in a responsible way" ,but ends up with inflation.Exactly as we predicted things would turn.Others will follow,and then the Fed starts to turn the taps on.

https://www.bbc.co.uk/news/business-51011000

"There will be an infrastructure revolution in our great country.

"We set out in our manifesto during the election how we can afford to invest more and take advantage of the record low interest rates that we are seeing, but do it in a responsible way.

"There is a lot of research to suggest that poor transport infrastructure in the north holds back productivity.

"Another investment area is likely to be in broadband technology, and I think green technology will also be a focus."

[MrXxxx]

7 hours ago, Harley said:

Excellent.  Think I shall buy some more Sainsbury's.  Takes yer money in Argos and gives yer nothing back in Sainsbury's.  Perfect, nice and tight, as tested by the YRS!!!! 

:-) :-) :-)...what's your buying tips for this year YRS so that we know what to go short on? :-) :-) :-)...on a serious note (well sort of!), what are property prices doing in your `neck of the woods`?...from memory, didn't Cheltenham have the fastest/highest increase in property prices for 2019?

[DurhamBorn]

7 hours ago, Harley said:

Excellent.  Think I shall buy some more Sainsbury's.  Takes yer money in Argos and gives yer nothing back in Sainsbury's.  Perfect, nice and tight, as tested by the YRS!!!!  That Perkbox thing my partner gets with her professional body subscription works a treat at 6% off in Argos.  Plus one free movie a month with Rakuten (a bit lame film wise though).  And yep, Argos is pretty active with discounts at certain times.  Defo worth keeping an eye on.  I'm off to try Gumtree this year as a seller and purchaser.  Apart from Council and motor tax, VAT is about the only tax left for me to conquer so second hand will do nicely.  Happy to pay tax when they're happy to spend it wisely.      

Facebook marketplace Harley is where you get the bargains now.Women list stuff on there as its so quick and easy.Iv just got my daughter an £700+ silver cross pram set for £130 and its pristine,some grandparents had it,probably been pushed to the end of the close twice.Once you know what you want check every day and be patient.

[Harley]

20 minutes ago, DurhamBorn said:

Facebook marketplace Harley is where you get the bargains now.Women list stuff on there as its so quick and easy.Iv just got my daughter an £700+ silver cross pram set for £130 and its pristine,some grandparents had it,probably been pushed to the end of the close twice.Once you know what you want check every day and be patient.

Ta for the tip.  Do I need to sign up to the FB devil?  Maybe I could arbitrage - buy there and sell on eBay, etc!

55 minutes ago, MrXxxx said:

The problem there is the counterparty risks...the cost of a divorce soon erodes your assets over a very short time! :-)

Agreed.  An ETF and a girlfriend sounds much better!

[DurhamBorn]

4 minutes ago, Harley said:

Ta for the tip.  Do I need to sign up to the FB devil?  Maybe I could arbitrage - buy there and sell on eBay, etc!

Agreed.  An ETF and a girlfriend sounds much better!

Iv never married and never will.

Yes you could arb i expect.The knack is to look for the expensive stuff when new.Instead of a £70 rug for £20,the real bargains are the £800 rug for £100 etc.

Iv had amazing furniture on there.Last one was £1100 new bought for £60.Like you i hated paying VAT on stuff so its perfect.The beauty is you end up with really expensive stuff dirt cheap because a bored 60 something ex government worker on a big pension wants a colour change.

[Harley]

9 minutes ago, DurhamBorn said:

Iv never married and never will.

Yes you could arb i expect.The knack is to look for the expensive stuff when new.Instead of a £70 rug for £20,the real bargains are the £800 rug for £100 etc.

Iv had amazing furniture on there.Last one was £1100 new bought for £60.Like you i hated paying VAT on stuff so its perfect.The beauty is you end up with really expensive stuff dirt cheap because a bored 60 something ex government worker on a big pension wants a colour change.

We've been de-cluttering and am currently waiting for the next car boot sale, unless there's a better market to get good prices.  Apparently quite a knack to these car boot sales as the other sellers buy up innocent newbies early on and then sell it all on at higher prices!  We have clothes, work machines, and of course, Harley (the bike, not me) parts!  All bagged, tested, and ready to go.  Already gave a load away to "friends" but b*gger that since they did not even offer to pay anything.  Most of the machines are of the buy cheap, buy twice variety.  Nothing wrong with them but not really man enough for my needs.  Like an electric wacker plate (now have a petrol one).  Excellent for DIY but not someone where time costs.

[Harley]

I've just done an awesome performance review of one of my income accounts for the year.  That is, my performance at buying at a rightish time (low price) using my preferred techniques.  Seeking such feedback really helps to validate approach and improve future performance.  A thoroughly recommended exercise.

The background story was that I needed to quite quickly ramp up this account to secure a future dividend stream to partially live off (to reduce work hours).  This started for this account in 2019, actually mostly the second half of that year.  So I was cutting a few corners and not religiously following my approach but initially buying as much when the share yields were good (over 5%) as when they were good and the price was at an intermediate low.  Several stocks therefore got cheaper!

I analysed my purchases (it's a buy and hold account) by:

. "Initial" purchases (I like the stock and the dividend so buy a small position regardless in order to get it on my radar)

. "Weekly" purchases using my approach and (aggressively for now) laddering in

. "TBD" purchases where I either used an old approach (looking at daily instead of weekly price data) or let emotion take over!

The results:

. Initial.  Represented 36% of purchases.  1% gain.  Happy with that.

. Weekly.  Represented 27% of purchases.  11% gain.  Happy with that.

. TBD.  Represented 37% of purchases.  2% gain.  Room to improve!

So for me, yes, I need to follow my approach, no exceptions.  Clearly, at 37% (TBD) there were loads of exceptions, but these were more at the start and the "Weekly" is now taking over.  This bodes well for the future.  The move from looking for weekly rather than daily buy signals for such a buy and hold account was a game changer.  Indeed, as the pressure to ramp up the portfolio lessens, I may move to monthly data for hopefully an even better performance.

Each to their own and nothing wrong with dollar cost averaging.  Indeed, that would be my personal next best preference.  But everyone needs to do what works.  the key is to review it to see how good and to look for possible improvements.  A bit like life generally!

PS:  All data excludes dividends.

[Harley]

.

[TheCountOfNowhere]

3 hours ago, DurhamBorn said:

The seeds all getting set now for the reflation ahead.It always starts "in a responsible way" ,but ends up with inflation.Exactly as we predicted things would turn.Others will follow,and then the Fed starts to turn the taps on.

https://www.bbc.co.uk/news/business-51011000

"There will be an infrastructure revolution in our great country.

"We set out in our manifesto during the election how we can afford to invest more and take advantage of the record low interest rates that we are seeing, but do it in a responsible way.

"There is a lot of research to suggest that poor transport infrastructure in the north holds back productivity.

"Another investment area is likely to be in broadband technology, and I think green technology will also be a focus."

When does the predicted deflation start? 

 

Or have we had it? 

 

Have the bankers convinced the tories to borrow and spend big so they can push the rates up and profit for decades? 

 

The UK is a proper mess now. 

 

Brexits given the tories carte blanche to bleed us dry. 

 

Holy ####.