Trading Secrets 09-02-2023 00:53 18 Views

2-Year Business Cycles Matter in Commodities

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

In particular, 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, the 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? 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.

Follow Mish on Twitter @marketminute for stock picks and more. Follow Mish on Instagram (mishschneider) for daily morning videos. To see updated media clips, click here.

Mish in the Media

Read about Mish's interview with Neils Christensen in this article from Kitco!

In this appearance on Making Money with Charles Payne, Charles and Mish discuss whether Powell can say mission accomplished.

Mish shares her views on how to approach the earnings announcements of Apple, Amazon, and Alphabet, and gives her technical outlook on how the earnings results could impact the S&P 500 and Nasdaq 100 in this appearance on CMC Markets.

Listen to Mish on Chuck Jaffe's Money Life, beginning around the 27-minute mark.

Kristin and Mish discuss whether or not the market has run out of good news in this appearance on Cheddar TV.

Harry Melandri and Mish discuss inflation, the Federal Reserve, and all the sparkplugs that could ignite on Real Vision.

Jon and Mish discuss how the market (still rangebound) is counting on a dovish Fed in this appearance on BNN Bloomberg.

Mish discusses price and what indices must do now in this appearance on Making Money with Charles Payne.

In this appearance on TheStreet.com, Mish and JD Durkin discuss the latest market earnings, data, inflation, the Fed and where to put your money.

In this appearance on CMC Markets, Mish digs into her favourite commodity trades for the week and gives her technical take on where the trading opportunities for Gold, oil, copper, silver and sugar are.

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.


Mish Schneider

MarketGauge.com

Director of Trading Research and Education

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