iM Update* – May 23, 2014

Bond-market:

The BVR-model avoids high beta bonds (long-bonds) and also intermediate duration bonds. The Bond Value Ratio is shown in Fig 4. The BVR is a bit lower than last week’s level. According to the model, only when BVR turns upward after having been lower than the lower offset-line should one consider long bonds again.

The Yield Curve:

The yield curve model shows the generally steepening trend of the 10-year and 2-year Treasuries yield spread. Figure 5 charts (i10 – i2). The general trend is up, as one can see, although the yield curve has flattened recently. FLAT and STPP are ETNs. STPP profits from a steepening yield curve and FLAT increases in value when the yield curve flattens. This model confirms the direction of the BVR.

 

Gold:

The modified Coppock Gold indicator shown in Fig 6. This model has been out of Gold since Nov-26-2012 but is now invested

This indicator is described in Is it Time to Buy Gold Again? – Wait for the buy signal …….

 

Silver:

The modified Coppock Silver indicator shown in Fig 7 and is currently invested.

This indicator is described in Silver – Better Than Gold: A Modified Coppock Indicator for Silver.