STA Blog

Friday’s regular Charting the Markets slot on Friday the 21^st June was covered by IG’s in-house analyst Joshua Mahony. Taking a broad sweep through indices, foreign exchange and commodities, he saved the best until the end.

Gold, where the ratio to silver hit a multi-year peak at 91.5 ounces, almost 2 standard deviations above the very long term mean regression. A level last seen in 1993, for those who like their statistics the record high was set in early 1991 at 101 ounces; the record lows were in 1983 and 2011 at 32 ounces. Quite spectacular, and a lesson in how not to lump all commodities together.

An interesting feature provided by IG is the proportion of their clients who are bullish versus bearish. This is not a sentiment measure, like the Purchasing Managers outlook or estimates of consumer confidence, but are a measure of where clients’ money is going. I was surprised to hear that in the in the foreign exchange market, despite views not tallying up so that there was no real consensus on the US dollar, 70 per cent of clients were bullish on the Australian dollar, 75 per cent long cable (despite Boris Johnson and the rest), and an eye-watering 81 per cent long Brent Crude.

Consistently through all time frames, he uses stochastics and MACD on all markets, pretty ribbon-like pictures produced by the two lines used. He speaks clearly and illustrates his views with charts.

As is the case with so many commentators, he mentions the potential for looser monetary policy, rising political tensions and the unexpected moves of President Trump.

Click here to view.