Current Market View: Corporate earnings performances during the third quarter period will depend heavily on trade war effects and the economic trends that began during the second quarter.
For the second consecutive quarter, EPS growth in the S&P 500 dropped and the word “tariff” was used in the Q2 conference calls of 142 different companies in the S&P 500. As a result, expectations for earnings growth have steadily deteriorated amongst analysts.
However, this leaves open the potential for upside surprises. In Q2, roughly 3/4 of all companies in the S&P 500, and this trend could continue during the next reporting periods.
Our Predictions for Q3 2019: The S&P 500 finished the Q2 reporting period trading at 2,940 and market valuations have since risen by just 1.63%. Despite the continued concerns over global growth, a steady EPS performance for the S&P 500 in Q3 should help the index vault key psychological levels at 3,000 for the majority of the coming quarterly period.
For more financial news and stock market trading tips, visit AskTraders.com
For most of 2019, the emerging trends in the precious metals space have been undeniably strong. Many analysist (possibly a majority of the financial analyst community) seemed to think that these types of events were impossible, given the fact that the S&P 500 was on a clear course to continue posting record highs.
However, when this type of enthusiasm in equities reaches an extreme, it’s often a good idea to start looking at the precious metals space as a protective buffer against the growing potential for downside volatility. This was the basis for many of my bullish commentaries (and actual trades) during these periods and recent price moves have largely confirmed the accuracy of those forecasts.
If we take a long-term view of the SILVER/USD chart history (weekly), we can see that the initial surge in price activity became apparent during the May-June trading period. The first major signal that the paradigm had shifted developed once prices forcefully broke through the Ichimoku Cloud structure. Prior to this event, the most significant price lows formed toward the end of May (just below $14.30) and SILVER/USD soon rallied by more than 37.5% to reach new highs of $19.65 in roughly five weeks.
Silver Price Chart
For some investors (particularly those focusing on cryptocurrencies), these rallies might not seem all that significant. However, we must consider the fact that SILVER/USD had been caught in a dramatic long-term downtrend that had produced very little upside price movement since July 2016.
If we look at this same catalyst event on the SILVER/USD daily charts, we can see that Kumo support lies within close proximity to the current market valuation. This is another highly encouraging element for anyone bullish on assets tracking the value of silver. As long as markets can hold these levels (and not break downward through the Kumo), the implication is that SILVER/USD will be in a position to move above the September highs of $19.65.
Silver Price Chart
Of course, all of that will depend on price performances seen in the shorter-term charts. Interestingly, we are starting to see similar events unfold on the SILVER/USD hourly charts (and this largely supports the broader thesis).
Silver Price Chart
Traders that are familiar with the practice of Fractal Analysis might view these recent developments as particularly exciting, given the ways they suggest an extension of the prior bull move that generated the May-June price breakout in SILVER/USD.
Silver Price Chart
What’s notable here is that the short-term Ichimoku Cloud break (on the hourly charts) shares many of the same features that were present during the May-June catalyst event. On the hourly charts, there is a bit more distance present between price and the Kumo, so this actually suggests we could still see some further downside without eroding the bullish bias for SILVER/USD.
Silver Price Chart
Furthermore, this recent break of cloud resistance on the SILVER/USD monthly charts was accompanied by an overbought surge in the Connors RSI indicator reading. When I use the Connors RSI indicator, I will generally look for bullish/bearish divergences rather than instances of price extremity. The reason for this is that the indicator tends to send many more signals when compared to the traditional RSI reading.
In this case, the Connors RSI projected upside price moves (based on the divergence) and this is another factor that points to an eventual re-test of the September highs. For more information on how I interpret these specific indicator readings, I encourage readers to review my Connors RSI Trading Tutorial for a detailed explanation of how I conduct my price analysis.
Australia’s Economy Supported By Strong Employment Trends
As the world economy seems to be caught in a wide range of tumultuous events, certain regions have managed to show stable growth trends in key areas of its workforce.
In August 2019, Australia’s employment figures increased by 34,700 (to reach 12.93 million), which was a strong improvement on the increase of 36,400 during the previous month. These results actually beat analyst estimates for jobs growth, which were a full 10,000 jobs lower (based on expectations that global trade tensions might limit jobs growth).
Full-time figures continued to show stability, while part-time employment additions were particularly strong (with massive gains of 50,200 for the month). Overall, these jobs numbers are well above the historical averages, as the typical monthly employment change in Australia was just 13,900 from 1978 until last year. This trend shows that recent improvements have been particularly well received by Australia’s employment workforce.
“Australia’s labor market has shown incredible resilience in the face of growing economic uncertainty around the world. While many economic analysts were actually expecting jobs declines over the last few months, the Australian economy has easily managed to beat those deteriorating expectations and exhibit sustained consistency in growth. Overall, this is an exciting time for Australia’s current job seekers.“
Interestingly, there are several economic data reports which support the positive outlook for Australian job seekers. As a result, it cannot easily be argued that improved jobs gains over the last few months are something of an anomaly. Specifically, the country’s unemployment rate has held steady (near the 5% level) and the number of job vacancies has steadily risen since the beginning of January 2017. Of course, these are long-term trends and it is unlikely the market will see any changes that are significantly negative before the end of this year.
For job seekers, this is highly encouraging news. Essentially, the strong labor market suggests that job seekers have an excellent chance to get the jobs they truly want. Ultimately, it just comes down to the proper presentation and having an excellent resume to show to potential employers. As long as the jobs vacancy figures continue to rise, there is little reason for Australian job seekers to be discouraged in their efforts.
Australian Jobs Vacancies
Of course, there are still risk factors that could become apparent in the event that there is a slowdown in the global economy. However, all of this suggests that the current environment marks a great time to take advantage of the country’s stable economic trends and to apply for jobs that might have seemed elusive in the past. Recent jobs vacancy figures show that Australia’s employers are actively looking to hire for many positions. However, it would appear that these employers are having a hard time filling these positions because not enough people are applying for consideration.
Given the recent trends in Australia’s jobs market, it seems that there hasn’t been a better time in recent memory to update your resume and begin looking for a new career. It’s hard to argue with the fact that now is a great time to advance your jobs prospects now that Australia has shown its ability to overcome negative expectations for the world economy. All it takes is the proper presentation and a well-polished resume. Once these key requirements are secured, it seems that the sky’s the limit for job seekers looking to get started on a new career path for the future.
Economic Data Reports Send U.S. Stocks To Sustained Highs
Even with recent declines seen during the summer of 2019, the S&P 500 has managed to post a series of long-term higher highs that have defined an uptrend for the benchmark.
S&P 500
Recent jobs reports in the U.S. have been critical in terms of the implications they hold for the future monetary policy actions at the Federal Reserve. Stock market valuations will continue to be influenced by interest rate policy changes that are made during the remainder of this year.
Consensus estimates suggest the U.S. economy added an average of roughly 150K jobs for each month of this year (down slightly from the 160K recorded in prior averages). The national unemployment rate in the U.S. is expected to hold at lower levels, which is a key indicator of economic strength.
On balance, the U.S. is still posting some very strong economic numbers and any positive surprises in the next few jobs reports will likely push the average consensus in analyst surveys closer to the long-term averages. Current expectations for future rate hikes this calendar year remain questionable. However, all of these data figures will help to clarify some of these issues in the months ahead.
It will also be important to continue watching for developments in the U.S. ISM Services report, which has largely supported the bullish angle over the last year. With the readings that were posted for the last few months. This recent decline from the previous month’s readings may appear ominous but we are still coming off of figures that represent a 12-year high.
As a result, some declines were reasonably expected in the analyst surveys. Markets have still managed to trade higher after these prior releases on the argument that this long-term strength does bode well for the upcoming nonfarm payrolls figures coming out in the months ahead.
The services sector represents 70% of the US economy and these reports cover businesses like retailers, hospitals, and restaurants. Numbers above 50 signal expansion in the economy, and readings above 55 are considered “exceptional.” We are firmly above those levels, and this helps tip the odds in favor of a bullish data surprise for payrolls reports that follow.
The ISM indexes for new orders have recently seen gains of 64.8 (from 62.7 previously, marking another long-term high). All told, 16 of 17 of the industries that are tracked in the report are showing strong evidence of expansion. This is highly encouraging for the underlying trend in the U.S. economy, as it shows companies are actually having difficulties with skilled labor shortages.
Supply costs have also been seen rising in the recent reports and this brings us back to the potential market disruptions that could be caused by the implementation of a trade war. As labor costs also move higher, we are looking at a scenario that is essentially ripe for upside inflationary pressure in the U.S. economy.
Only ten years ago, little was known about cryptocurrencies. However, in the last couple of years, the market knowledge and the acceptance of the ideas of cryptocurrencies have dramatically increased. This sudden change is attributed to the popularity of the digital currency known as Bitcoin.
Essentially, Bitcoin was first mined in 2009. Since then, it has continued to evolve and is now known as the most popular cryptocurrency globally. In terms of market capitalization, Bitcoin has the highest-valued asset amongst all cryptocurrencies. Having a high market capitalization shows reduced risks for users. Thus, Bitcoin is thought by many to be the best choice for cryptocurrency investments.
Bitcoin
Due to Bitcoin’s extreme popularity, a lot of other cryptocurrencies, known as “altcoins”, emerged. Below are just some of the most popular cryptocurrencies at present, to which some experts believe have the potential to dethrone Bitcoin in the long run.
Ethereum
Ethereum was launched in 2015 as a software platform that allows Smart Contracts and Distributed Applications (DApps) to work without numerous interferences from different parties. Just like Bitcoin, Ethereum’s Ether is probably one of the most popular cryptocurrencies to date. Ether is also being managed by the principles of distributed ledgers and cryptography. However, the two are different in terms of their use–Bitcoin is a payment alternative while Ethereum is more on the enabling of peer-to-peer contracts and applications.
Litecoin
Launched in 2011, Litecoin is based on an open-source payment network that is not being managed by any central authority. As compared with Bitcoin, transactions in Litecoin are way faster (Litecoin transaction processes only take 2.5 minutes). Another advantage is that Litecoin’s algorithms are faster and a lot easier to decode and solve.
Ripple
The next cryptocurrency, Ripple prides itself in processing transactions in as fast as four seconds (Ripple’s digital coins are known as XRP). For comparison, Bitcoin takes about 10 minutes to an hour while Ethereum takes about two minutes to do them. NOTE: old currencies normally take a few days to process. Ripple does this by creating platforms for banks to easily send money and convert them in different currencies. Aside from this, Ripple’s XRP is very cost-effective as it can allow users to send money without high transaction fees.
Dash (DASH)
Formerly called as Darkcoin (in 2014), Dash (2015) is an altcoin that was based from the protocol of Bitcoin. What’s interesting about this cryptocurrency is that its transactions are almost anonymous as they are worked on a decentralized master code network that does it so.
Zcash
Zcash is an open-source and decentralized cryptocurrency that is focused on privacy and selective transparency. In this case, while the transaction details are recorded on a blockchain, information about the sender and recipient, and the amount of money is not disclosed. Nevertheless, Zcash can still allow its users to open specific transaction data so that the cryptocurrency can be used in legal transactions.
At present, there are already more than 1,600 cryptocurrencies in the market (and in fact, the number is still growing). And with such an enormous number to choose from, it would entail extensive research to know which one is the best for you. But then again, choosing which cryptocurrency to invest in is just the first step. If you want to consider investing in these cryptocurrencies, it would be helpful to think of them as the business they deserve to be.
Crypto Trading Analysis – Markets Responding to Broad Volatility
By Richard Cox
Crypto markets are responding to the broad volatility that has been encountered in equities markets (stock futures in the S&P 500, Dow Jones Industrial Average, and NASDAQ Composite).
BTC/USD – Ichimoku Weekly Chart
Catalyst Event: Bitcoin weekly charts see major development unfold as prices have made a clear break through the cloud structure (Kumo).
One-Month Trading Outlook: Bullish events in BTC/USD have made impressive rallies possible for traders during the middle portions of 2019. At the same time, Crypto bulls have encountered some resistance at $13,868.44, which is the high from June 24th.
BTC/USD -Weekly Chart
Risk to trading stance: Weekly indicator readings in the RSI remain bearish and we are rolling over from overbought territory. This suggests that any significant failures from current levels could see extended downside follow-through in the event that important support levels at $9,071.00.
Key trading range: $13,868.44 – $9,071.00.
Trading Outlook: Downside moves through $9,071.00 will place price targets near $7,427.00.
BTC/USD – Key Price Levels
BTC/USD Resistance 1: $11,112.31 – July 20th highs.
BTC/USD Resistance 2: $13,868.44 – June 26th highs.
BTC/USD Support 1: $9,071.00 – July 17th lows.
BTC/USD Support 2: $7,427.00 – July 4th lows.
_____________
ETH/USD – Ichimoku Weekly Chart
Catalyst Event: Bitcoin weekly charts see major development unfold as prices have made a clear break through the cloud structure (Kumo).
One-Month Trading Outlook: Sideways trading conditions prevail. Now that we have officially moved into the Ichimoku cloud (Kumo), unpredictable price action is likely to continue.
ETH/USD -Weekly Chart
Risk to trading outlook: Since the Kumo is rapidly descending, we could see the structure tighten and this would increase the probability for an upside break. Weekly indicator readings remain at middle levels, so there is little reason to believe this will be happening any time this week.
Key trading range: $363.30 – $148.88.
Trading Outlook: Downside break of $148.88 targets $83.17.
__________
ETH/USD – Key Price Levels
ETH/USD Resistance 1: $363.30 – June 24th highs.
ETH/USD Resistance 2: $404.99 – June 25th, 2018 lows.
ETH/USD Support 1: $148.88 – April 22nd, 2019 lows.
ETH/USD Support 2: $83.17 – December 10th, 2018 lows.
HECO: Socially Responsible Investing Backed By Strong Earnings
Socially responsible investing combines the ambition to make money with the motivation to enact positive change in the world. It is a popular approach to finance that has been around for decades. However, in recent years, the concept has been catching on at an even faster pace.
Since 2017, global investments based on ethical and social principles have increased by 34% and reached $30.7 trillion. In the U.S. alone, one in every six dollars under professional asset management is invested using socially responsible financial strategies. New research from Morningstar suggests these trends will continue growing, as nearly three-fourths of all investors are at least “moderately interested” in devoting long-term savings to sustainable investments.
One selection following these investment objectives is the Strategy Shares EcoLogical Strategy Fund (NYSEARCA: HECO). The underlying strategies guiding the ETF seek long-term capital appreciation, are ecologically focused, and backed by strong earnings results in core stock holdings. Since inception, investments in the Strategy Shares EcoLogical Strategy Fund have outperformed the MSCI ACWI TR Index by 7.36%.
To achieve these goals of sustainability, the Strategy Shares EcoLogical Strategy Fund focuses on companies that are components of recognized environmentally focused indices. Investment strategies apply strict criteria to identify global businesses with emerging projects positioned to benefit from ecologically conscious legislation and cultural shifts in market consumption.
During periods of normal market volatility, at least 80% of the portfolio allocation is devoted to green bonds, mutual funds, ETFs, equity, and fixed-income securities of ecologically-focused companies. At least 65% of total allocation is devoted to common stocks and fixed-income securities of ecologically-focused companies based in the U.S. The remaining portion of the allocation is devoted to ADRs and stocks connected to ecologically-focused businesses that are based outside the U.S.
The Strategy Shares EcoLogical Strategy Fund is broadly diversified across industry sectors and its positive outlook is supported by notable earnings results that have been generated during the market’s most recent reporting period.
During the first-quarter, casualty and property insurer Travelers Companies (NYSE: TRV) beat the market’s consensus earnings forecasts on underwriting improvements and significant declines in catastrophe losses. Core earnings posted at $2.83 per share, with nearly $800 million in net income for the period.
The EPS figure indicates annualized gains of 17% and the performance surpassed analyst expectations ($2.72 per share) by 4.04%. The revenue figure indicated annualized gains of 5.2% (at $7.67 billion) and comfortably surpassed Wall Street’s estimates calling for revenues of $7.1 billion. Catastrophe losses dropped by 45.5% on an annualized basis (to $193 million) and written premiums rose to $7.06 billion (a gain of 3.5%). Shares of Travelers Companies stock currently show YTD gains of 23.54%.
Another market sector that continues to generate enhanced returns can be found in traditional payment networks. Major credit card companies have shown strength in digital payments to overcome disruption efforts of big tech companies like Apple, Inc. (NASDAQ: AAPL) and others. To capitalize on these trends, the Strategy Shares EcoLogical Strategy Fund includes exposure to these traditional payment networks with two names that have outperformed the S&P 500 by a wide margin in 2019.
Mastercard (NYSE: MA) released first-quarter results that beat market forecasts for both earnings and revenue. Solid transaction volumes and a lift from new products/services propelled net income to $1.9 billion (EPS of $1.80). This represents a gain of 26.7% relative to the $1.5 billion in net income (EPS of $1.41) posted during the same period last year.
Mastercard’s adjusted earnings were $1.78 per share during its most recent reporting period, which represents an annualized gain of 18.7% and was firmly above the market’s consensus estimates ($1.66 per share). Revenues increased from $3.58 billion last year to $3.89 billion (a gain of 6.7%) and this also beat analysts forecasts of $3.85 billion. Mastercard stock shares currently show YTD gains of 33.31%.
Visa (NYSE: V) shares continue to reach new highs, even in cases where the rest of the market is declining. The company’s most recent quarterly report showed annualized gains of 8% in net revenues (at $5.5 billion) and a 17% annualized gain the bottom-line figure (EPS of $1.31). Payment volumes were higher by 8% (to $2.1 trillion) and this was accompanied by an increase of 9% in the number of total transactions (to 47.4 billion). Share repurchases of $2 billion also boosted EPS for the period.
Visa’s revenue growth did show some evidence of slowing but management has noted rising volatility in currency markets as a peripheral factor which may prove to be temporary in nature. Shares of Visa stock currently show YTD gains of 23.27%.
Key names in the technology sector (which represents 42.29% of allocation) include Adobe (NASDAQ: ADBE), which also beat Wall Street’s earnings targets for the fiscal first-quarter with adjusted EPS of $1.71 and sales of $2.6 billion. Consensus estimates were calling for EPS of $1.62 on sales of $2.55 billion. On an annualized basis, this performance indicates sales gains of 25% and EPS gains of 10%.
Current-quarter earnings guidance was reduced to an adjusted $1.77 per share (with sales figures expected to come in at $2.7 billion). Previously, Wall Street analysts modeled second-quarter earnings of $1.88 per share on sales of $2.72 billion. However, even with these recent reductions, it should be noted that Adobe’s updated guidance implies annualized sales gains of 23.6% and earnings gains of 6.63%. Adobe shares are currently showing YTD gains of 21.45%.
For investors seeking well-diversified, long-term capital appreciation through ecologically focused investment strategies, the Strategy Shares EcoLogical Strategy Fund is one name that should be on the radar. Even with its recent moves higher, shares of HECO are still trading below their long-term premium/discount averages. This suggests that the Strategy Shares EcoLogical Strategy Fund is attractively valued at current levels. As core holdings continue to show evidence of consistent earnings strength, HECO finds itself in a strong position to continue producing gains in 2019.
OIPIX: Powerful Returns Driven by High Caliber IPOs
In 2018, investors saw a surge in activities connected to initial public offerings (IPOs), as 190 companies entered the market and collectively raised a total of $47 billion. But the current IPO pipeline may be even more intriguing, as several multibillion-dollar companies are slated to enter the public market this year. These highly anticipated new issues have the potential to ignite the market’s interest in the months ahead and many investors are looking for ways of gaining sustainable exposure to new growth opportunities as they develop.
One option is the Catalyst IPOx Allocation Fund (MUTF: OIPIX), which applies quantitative models to select and rank high-caliber IPOs using two distinct and complementary strategies. The Fund includes roughly 150 long equity holdings, with an average market capitalization of $13.3 billion and a median market capitalization of $5.1 billion. Stock weightings are broadly distributed across industry sectors, with information technology stocks making up 32.0% of the total holdings, health care stocks making up 24.2% of the holdings, and communication services making up 12.7% of the holdings.
The Fund’s Core Long Component includes exclusive mutual fund access to the IPOX U.S. 100 Index, which tracks a group of 100 top-ranked companies in the IPOX U.S. Composite Index and has exhibited a strong level of long-term outperformance relative to the S&P 500. Common stock in these high-quality companies is purchased either at the time of the initial offering or later during the post-IPO trading phase. Stocks exhibiting bullish momentum and sustainable growth in market value during the periods following the initial floatation are analyzed as viable opportunities for inclusion in the Fund.
Since 2014, the IPOX U.S. 100 Index has produced returns of 695.64% (as of March 31, 2019). Over the same period, the S&P 500 Total Return Index has produced returns of only 261.24%. The divergences here are exceptionally striking, given the fact that the S&P 500 broke above its prior all-time highs during this timeframe. The underlying strength of these trends supports the outlook for continued moves higher in shares of OIPIX.
In conjunction with the Core Long Component strategy, the Dynamic Component of the Catalyst IPOx Allocation Fund’sidentifies 30 to 70 attractively valued IPOs (based on price/sales multiples) not included in the Core Long Component. Timing is critical for this portion of the strategy, as stocks become eligible for inclusion on the IPO date and remain viable as potential investment opportunities for a period of one month. The sum result of these dual approaches is a unique market instrument designed to capture the enhanced long-term returns often associated with promising IPO investments.
Broad sector diversification is another feature of the Catalyst IPOx Allocation Fund. Key stock holdings include Paypal (NASDAQ: PYPL), Takeda Pharmaceutical Ltd (OTCMKTS: TKPHF), Verizon Communications (NYSE: VZ), Thermo Fisher Scientific (NYSE: TMO), Stryker Corp. (NYSE: SYK) and Worldplay, Inc. (NYSE: WP). Impressively, all of these companies beat consensus estimates for earnings during the most recent reporting period, and these bullish performances have helped drive OIPIX gains relative to the S&P 500.
As the Catalyst IPOx Allocation Fund’s largest stock holding, recent earnings performances from Paypal have been particularly notable. For the first quarter, Paypal reported adjusted EPS of $0.78 (beating analyst expectations by 14.71%) on revenues of $4.13 billion. Total payment volumes rose by 25% on an annualized basis (to $161 billion), and the company revealed its peer-to-peer payment app Venmo is on pace to generate revenues of $300 million in 2019.
Strong earnings growth amongst these companies has been widespread, and this suggests share gains in OIPIX may continue. Another notable example can be found in Thermo Fisher Scientific, which posted earnings of $2.81 per share during the most recent reporting period. This figure beat analyst estimates by $0.07, and the company’s revenues of $6.13 billion also beat expectations by $89.47 million. The market is currently anticipating annualized earnings growth of 13.78% for Thermo Fisher for the second quarter and earnings growth of 12.27% for the third quarter.
Consistencies in projected growth and earnings have been reflected in market valuations. For the period 06/30/2017 – 06/30/2018, the Catalyst IPOX Allocation Fund returned +21.20% and significantly outperformed its S&P 500 Total Return Index benchmark by +683 basis points. Over the last three years, those performances have been recognized with Morningstar’s 5-star rating for risk-adjusted returns positioned at the top of the mid-cap growth category (555 total funds). These three-year performances were also recognized with a Lipper Fund award from Refinitiv as the best alternative event-driven fund (with the highest consistent return value out of 49 total funds).
While U.S. equity markets continue to exhibit evidence of underlying stability, the continued trend implication is that 2019 may be a massive year for IPOs. While the total number of public offerings could decline this year, there are several events on the horizon with the potential to generate an explosive impact on the market. As a result, sustainable consistency in deal flow should create a favorable environment for the Catalyst IPOx Allocation Fund. YTD returns in OIPIX continue to outpace the S&P 500 Total Return Index benchmark and this bullish activity is likely to catch the market’s attention in the quarters ahead.
Metals Correlations: Might Silver Emerge as the Market Winner?
After many turbulent market periods in 2018, the precious metals seemed to find itself on a stable footing toward the end of the year. Rising volatility levels after August put gold on track to post a 5% gain in December, which was its best-performing monthly period since early 2017. But the ultimate result of this activity was that it took the market’s focus away from gold’s undervalued counterparts in the precious metals asset class. Specifically, the longer-term historical trends suggest that relative downside in silver has reached extreme (and potentially unsustainable) levels. Furthermore, metals investors should pay strict attention to inflow activity in metals-backed ETFs as a way of gauging when a potentially forceful reversal in silver is likely to begin.
The relationship between gold and silver is a topic that is often discussed amongst precious metals investors. But what many miss in this simple ratio analysis is the propensity for silver to develop trends which broaden to extreme boundaries in relatively short periods of time. In comparative terms, the price history of gold shows us that this type of activity does not occur to the same degree in its own market valuation.
In the chart above, we can see a comparative analysis of the gold/silver ratio and the market price of silver in U.S. dollar terms. With this information, what I like to focus on are not the price moves themselves but the extremity of the moves. As we can see, the market price of silver skyrocketed in the late 1970s and then made similar moves to the topside again in 2010-2011. When these trend changes occurred, the market also experienced significant declines in the gold/silver ratio. Additionally, it should be noted that silver valuations were roughly similar to current price levels just prior to the giant leaps which eventually benefited bullish investors.
Ultimately, this indicates that silver is much more likely to act like a “coiled spring” when market extremes become apparent. With the S&P 500 and NASDAQ both trading within close proximity to their respective record highs, the potential for downside retracement in equities continues to increase. If this does occur, long-term trend histories suggest that silver could benefit (much more than gold) in the trend-change periods that follow.
For good reason, many metals investors tend to place their focus on the underlying spot prices. But there is also crucial information which can be gleaned from exchange-traded funds, like the iShares Silver Trust ETF (NYSE: SLV). What is particularly interesting about SLV is its inflow/outflow activity as it can be used to define volume changes in aspects of the market that not regularly covered by traders dealing directly with physical metals.
From a trend perspective, the market behaviors characterized by these alternative volume segments can help us to identify situations in which price reversals may begin to occur. In this light, we can see that silver could be basing for a rally of nearly 43.76% when viewed in relation to the August 2016 highs (19.71).
Evidence of this growing potential for upside can be found in ETF inflow activity changes. Over the last four weeks, SLV inflows have propelled the fund to the top of its asset category (at $42.2 million). This represents a massive alteration from the $234.5 million in SLV outflows which became visible over the last 26 weeks. Ultimately, the diverging activity suggests new sections of the market may be developing an interest in silver while these assets are still trading near their lows.
Since these portions of the market (ETF investors) tend to focus on stocks, the surge in inflows indicates a rising interest in safe haven assets while stock benchmarks (i.e. the S&P 500 and NASDAQ Composite) continue to trade at record levels. Without a significant macro catalyst in place, this seems to indicate a more natural ebb and flow of the market in which overvalued assets (equities) are starting to fall out of favor.
Of course, this is not yet visible in the stock charts themselves. But the trend has clearly becoming visible in the market’s flow data. This confluence of events suggests undervalued metals may have the best potential for upside in the current environment. As a result, silver is starting to look as though it may emerge as a final winner for investors before the end of 2019, given its strong potential for relative upside during periods of rising market extremes.
Have you ever thought of buying gold coins as a hobby, or maybe, for business or investment purposes?
In this current age of “instants”, investing in gold has become so much easier, that you no longer have to even think about it. Also known as bullion, gold coins have long been used for trades on markets. But unlike regular coins, they have high levels of purity up to 90% and come in different remarkable designs. Because of these reasons, gold coins are considered highly valuable wealth by investors.
So if you are looking for the best gold coins to invest in, you’ve come to the right place. To help you choose gold coins for your portfolio, we’ve listed below some of the most secure and at the same time, most widely accepted gold coins in the world.
American Gold Eagle
The first to be in this list is a must-have for every investor–the American Gold Eagle coin. Throughout history and even until now, this gold coin is considered to be one of the most highly sought-after coins worldwide. The coin is easily identifiable due to its design consisting of bald eagles on one side, and the Liberty on the other. The coin also comes in various sizes which ranges from 1/10 oz to 1 oz. Among these sizes, the 1 oz coin is the most popular. In terms of content and purity, the quality of this coin is guaranteed by its 91.67% fineness (5.33% is copper and 3% is silver).
Canadian Maple Leaf
The Canadian Maple Leaf is known to be the official coin series of Canada and the Royal Canadian Mint. Canadian Maple Leaf coins are so popular that at one point in time when they were first released in 1979, they compete with the South African Krugerrand in terms of demand. The front side of the coin bears the design of either Canadian Maple leaves or the right profile of Queen Elizabeth. On the other side, the image of a sugar maple leaf can be seen.
Austrian Philharmonic
According to the World Gold Council, Austrian Philharmonic Gold coins were once the best-selling gold coins worldwide during the twentieth century. First minted in the 1980s, the gold coin was made as a tribute to the Vienna Philharmonic Orchestra (Wiener Philharmoniker), which the design of the coin is inspired from. And aside from being the first ever coin released in the program, the Austrian Philharmonic bridges the gap between the country’s independent status and as a member of the European Union.
British Britannia
Ever since the first century, the British Britannia gold coin has remained one of the leading coins in the portfolios of gold investors. In terms of the design, Queen Elizabeth II is featured on one side of the coin, and Lady Britannia carrying a shield and a trident on the other. Although they come in various sizes, the 1 oz British Britannia gold coin is the most favored among investors.
South African Krugerrand
Although the South African Krugerrand is the least expensive among the gold coins in this list, it still remains popular around the world. The coin is characterized by having a springbok antelope design. However, because of this, some people complain that it is not as elaborate as other coins. In terms of purity, the South African Krugerrand contains about 8.33% of copper. As such, this coin is being sought after because it is a durable investment.
