2-Year Business Cycles Matter in Commodities

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Written by Michele Schneider

This week we have featured the 23-month moving average or 2-year business cycle and its significance to the indices.

Particularly when speaking about the S&P 500, we wrote:

There was a bullish run in 2021 based on easy money.

Inflation ran hotter than most expected.

The Central banks were caught off guard…and by 2022..party was over.

So, that really begs the question of why is this year’s 23-month moving average one of the most important indicators for equities

Now, what about for gold?

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Anybody who has followed us and particularly Mish knows how bullish we are in the metal.

And, after hearing the State of the Union Address Tuesday night, we are even more bullish now.

Those thoughts will be published over the weekend as an addendum to the 2023 Outlook.

Let’s look at the monthly chart of gold.

The charts of the SPY and the Russell 2000 (IWM) both showed how they stopped rallying right under the 23-month MA.

That could change of course.

Gold on the other hand, is above the 23-month MA and the 2 year business cycle.

It cleared the major moving average in December.

Saw follow through in January 2023.

And thus far, in February, is holding the gains.

In fact, should gold get closer to around 168-170, that would look like a low risk buy opportunity.

If SPY and IWM cannot clear their 2-year cycles, while gold already has-watch the charts. They tell you everything.

 

For more detailed trading information about our blended models, tools and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.

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Mish in the Media

Kitco Article by Neils Christensen on the Gold Market-02-07-23

Making Money With Charles Payne Fox Business 02-06-23

Yahoo Finance Week Wrap up 02-03-23

CMC Markets-Trading the Tech Heavy Earnings Reports 02-01-23

Chuck Jaffee Money Life 01-31-23 (after minute 27)

Cheddar TV 01-30-23

Real Vision 01-27-23 and on our Youtube channel

BNN Bloomberg 01-27-23 or on our Youtube

Making Money with Charles Payne 01-26-23

The Street.com with JD Durkin 1-26-23 or on our YouTube

CMC Markets-Video on Commodities 01-25-23 and on our MG Youtube

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ETF Summary

S&P 500 (SPY) 420 resistance with 390-400 support

Russell 2000 (IWM) 190 now support and 202 major resistance

Dow (DIA) 343.50 resistance and the 6-month calendar range high

Nasdaq (QQQ) 300 is now the pivotal area

Regional banks (KRE) 65.00 resistance

Semiconductors (SMH) 248 is the 23-month moving average-key

Transportation (IYT) The 23-month MA is 244-now resistance

Biotechnology (IBB) Sideways action

Retail (XRT) 78.00 the 23-month MA resistance and nearest support 68.00