Signs That Equities & Metals Are Decoupling
Comment:
This trade is active since i dont think anyone sees that the football is actually still in the hands of the qb (gold).
Instead of getting whipsawed trading stocks, indices and leveraged bear etfs, im just gonna watch gold run directly up the middle untouched.
Instead of getting whipsawed trading stocks, indices and leveraged bear etfs, im just gonna watch gold run directly up the middle untouched.
Trade active:
At the moment, Im long silver, short SPY, in case you want to trade this.
I see a big up move in silver and simultaneous down move in SPY in 3 mins (11:20 am) or around 1:15 pm.
If neither, then itll be a much tougher trade. Will keep this somewhat active today.
I see a big up move in silver and simultaneous down move in SPY in 3 mins (11:20 am) or around 1:15 pm.
If neither, then itll be a much tougher trade. Will keep this somewhat active today.
Trade active:
EOD or LOD Price Target Range: 368.66 - 367.43
Gutshot Closing Price Target: 367.67
AVG Of All Methods Closing Price Target: 367.96
Gutshot Closing Price Target: 367.67
AVG Of All Methods Closing Price Target: 367.96
Comment:
^SPY
Trade active:
Holding SLV into next week at least..
Comment:
The next thing that I've been waiting to see register on the chart above is the inverse scenario of the blue and red trendlines corresponding to either asset class.
I think the decoupling process is in full swing and will be nearing completion once gold/silver form clear, straight paths upward, while the equities continue to meander in increasingly acute angles.
You can sort of notice it happening retroactively on a daily basis over the past two weeks, but the move should start to become far more obvious shortly.
All opinions about the near-future are unchanged.
I think the decoupling process is in full swing and will be nearing completion once gold/silver form clear, straight paths upward, while the equities continue to meander in increasingly acute angles.
You can sort of notice it happening retroactively on a daily basis over the past two weeks, but the move should start to become far more obvious shortly.
All opinions about the near-future are unchanged.
Trade active:
Decoupling has been visually obvious since Monday. Final 1%+ divergent move on the daily between the two asset classes will denote the completion of the process.
Trade active:
Interesting Finding: It seems that a precondition for sustained decoupling is a short time period when USD and Gold/Silver are trending in the same direction.
Notice there was a month (summer/fall 2020) when both assets went lower simultaneously and stocks decoupled from metal as the lead class. Now, I believe the opposite is finally happening and it's only taken this long because USD has gotten slammed so hard.
Notice there was a month (summer/fall 2020) when both assets went lower simultaneously and stocks decoupled from metal as the lead class. Now, I believe the opposite is finally happening and it's only taken this long because USD has gotten slammed so hard.
Trade closed: target reached:
Turns out I was pretty much wrong on everything except the last comment about USD being the same direction as either one of the asset classes, depending on which is becoming dominant relative to prior positioning.
So I watched a lot of tape today. Mostly QQQ and Silver Futures adjacent to eachother. These two guys are essentially near-linear correlates - at least over the last simultaneous uptrend that is. What I find important/cool about today is that each deriv's tape would halt when the other changed short-term direction.
The frequency of the changes in direction magnified towards the end and it was clear to me that the Nasdaq was not following some Fib extension touch, nor some anticipatory group of same-day earnings calls that most would scribe today's price action to.
Rather, the process of decoupling is just the methodical elimination of near-term correlation via seconds-long micro-bounces off of the supposed opposite in a given couple. The way that it seemed to work was that the Nasdaq would try a move down, causing silver miners to try to move up. Nasdaq is the main influencer in this particular market, so it will be the impulse leader of this insanely boring dance.
But, as silver tries to move higher, the inherent near-term correlation with the short-term NAS trend is so strong that the NAS winds up back to point 0 before silver can move an inch. And so this goes on all day long and that - in its incredibly mind-numbing essense - is very likely to be all there is to decoupling.
If I tried to explain this more concretely, I'd say that "decoupling" is done through the programatic process of changing the real-time learning output of local algorithms that initially created correlation in the first place. While this is still abstract, it's mostly just a back and forth feedback that loops the same impulsive info to as many machines as possible until they are programmed to "re-recognize" an AB asset relationship as nothing (something).
Goodnight!
So I watched a lot of tape today. Mostly QQQ and Silver Futures adjacent to eachother. These two guys are essentially near-linear correlates - at least over the last simultaneous uptrend that is. What I find important/cool about today is that each deriv's tape would halt when the other changed short-term direction.
The frequency of the changes in direction magnified towards the end and it was clear to me that the Nasdaq was not following some Fib extension touch, nor some anticipatory group of same-day earnings calls that most would scribe today's price action to.
Rather, the process of decoupling is just the methodical elimination of near-term correlation via seconds-long micro-bounces off of the supposed opposite in a given couple. The way that it seemed to work was that the Nasdaq would try a move down, causing silver miners to try to move up. Nasdaq is the main influencer in this particular market, so it will be the impulse leader of this insanely boring dance.
But, as silver tries to move higher, the inherent near-term correlation with the short-term NAS trend is so strong that the NAS winds up back to point 0 before silver can move an inch. And so this goes on all day long and that - in its incredibly mind-numbing essense - is very likely to be all there is to decoupling.
If I tried to explain this more concretely, I'd say that "decoupling" is done through the programatic process of changing the real-time learning output of local algorithms that initially created correlation in the first place. While this is still abstract, it's mostly just a back and forth feedback that loops the same impulsive info to as many machines as possible until they are programmed to "re-recognize" an AB asset relationship as nothing (something).
Goodnight!
Notice also that the correlation histogram for each area is a mirror image of the other. This is true from a visual standpoint and from the actual readings, which swing from near-perfect inverses to near-perfect positives.
While I can't say for sure, symmetry to this extent is uncommon and thus worth a hypothesis. The other factors mentioned in the chart, however, are commonly seen aspects involved with the (un)pairing of correlated assets.