The Week in Charts - November 27, 2023

These charts are just a few collected over the week. Economic data charts are not part of our Market Health Models or PTI but, while second tier data, are still valuable information. 

Consumer not Tapped Out?

Patrick Zweifel form Pictet Asset Management showed that one of the reasons the US is not in recession yet is the consumer still has excess savings. I've read this elsewhere that money supplements from covid era are still having an effect. Weak holiday season data kicked off the 2007/2008 recession so this is worth watching. 

Insider Buying: There they go again. Despite all the concerns about tech being overbought (and many argue, overdue for a clobbering), tech corporate insiders apparently disagree.

Volatility in Decline: The VIX index is simply a measure of the market's expectation for volatility 30 days out. It is used in options pricing and had gotten very tight for 3 months between June-August and recently rejected at 6-year uptrend line. It can always change quickly, but for now, a decent sign suggesting the end of the year could be smooth. 

The Nations® family of Dex® Indexes: Basically these provide relative expectations for market volatility and the market’s willingness to buy options hedging strategies, or conversely to assume risk. They are the best indication of the amount of risk market participants are willing to bear. US markets Hedging demand has fallen sharply and is hovering around the lowest level since March.- Bloomberg

Hedge Fund Exposure: Hedge funds net exposure to equities is at relatively low levels which may suggest more fuel for the fire.

Total Liquidity: Liquidity is the most imortant factor for asset markets and Cross Border Capital seem to be the best at it. It is much more than "M2" money supply, or even the Fed Balance Sheet but considers all forms of money available in the financial system. 

Below is a measure of USTotal Liquidity and it suggests that flows lead the slope of the Treasury yield curve consistently by roughly 9 months for more than 50 years. This chart is now suggesting that either US short-term rates will come down, US long-term rates will continue to rise, or both. Any of the above will have an impact on asset prices. 

Insider Buying: This chart done by Semtimenttrader.com. It shows that despite all the concerns about tech being overbought (and many argue, overdue for a clobbering), tech corporate insiders apparently disagree. Pretty surprising really. 

Gold: This is a 20-year monthly chart of gold bullion. It appears ready to start the next leg higher in U$. This may finally start to catch up with gold price in other currencies that have already been hitting new all-time highs. I believe if gold closes over $2100, it will spur increased buying. We are living in a new monetary era that I think will take gold to unexpectedly high levels. 

Our Chart of the Day is intended to be a standalone technical chart. We use them to highlight open positions, stocks on our watch list, or indicators that we believe are important, or just interesting at the time. It is not a directional market call. Feel free to share them with others who may be interested.