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New highs

FTSE 250's fresh record

The FTSE 250 has already achieved a new all-time peak, while the Nasdaq 100 has made a fresh peak for the present bull market. I expect that the S&P 500 and FTSE 100 will now follow suit. Sure, there may be a little hesitation just beforehand. That's only to be expected, though. And, once they do, I expect even more people to switch into the bullish camp.

How will those who have lately called the top explain this away? My favourite piece of doomsayers' sophistry at time likes these is the Elliott Wave Theory's "wave B" irregular top. That means that the bear market has indeed already begun, but that the indices are somehow also having a last hurrah that exceeds their bull-market highs, perhaps substantially so. Erm, yes.

Dow's Coppock "sell"

Bryan Weston has emailed me about the downturn in the Dow's Coppock indicator, wanting to know if this is a significant development. Upturns in this indicator have often confirmed the start of major bull markets such as in 2003 and 2009. Had I heeded its signals on those occasions, I would have joined the uptrend much sooner than I actually did. Coppock downturns, however, are different kettle of fish.

Coppock's hits and misses

Edwin Coppock never intended his indicator to be used for determining when to sell. I find this a bit frustrating, really. What's the use of an indicator that tells you a bottom in the market has likely occurred if it didn't help you to avoid the losses that led to that bottom? Still, Coppock's premise has been borne out by experience: the indicator has often turned down without any lasting ill effect. I am working on a deeper study into Coppock and will report back soon.

Gold reverts to bullish

Meanwhile, a significant development has happened in gold. The yellow metal has got back above its 200-day moving average for the first time in a year. What is more, it has done so in convincing fashion. Whereas its early move up from its lows of late 2013 was shallow and choppy, it has recently thrust sharply higher. Such behaviour is characteristic of a genuine uptrend, rather than a counter-trend move.

I will readily admit to having my doubts here. I suspect that the US dollar will continue to rise as the Federal Reserve pares back its money-printing efforts, and that this will further undermine the price of gold. If I am right, it could well sink below its 2013 lows at $1181. Beyond this, I am still very bullish on gold. But I am simply not convinced that this is the resumption of the previous boom that I ultimately expect.

Despite these fundamentally-based fears, I am not about to quibble this move from a technical perspective. I said last April (http://bit.ly/1msKyKx) that a powerful recovery through the 200-day average would make me willing to go long here again. That was based on my analysis of gold's mid-1970s sell-off, which I believe to be similar to the one since 2011. I am therefore seeking buying opportunities here once more.