Charts like this make me want to Sell Japan and Buy Gold — at least for a quarter or so.


click for larger chart
Source: Josh Brown

Category: Contrary Indicators, Technical Analysis, Trading

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

10 Responses to “Japan versus Gold?”

  1. pensionretirement says:

    Barry, can I ask you why you say that you want to go long Japan & short Gold? Is it a mean reversion play, some type of anti-moemetum, that they are uncorrelated assets, or is it two uncorrelated assets that you’re making a directional bet on? None of these or a combination?

    I’m asking because depending on the answer and the underlying thoughts, one could come up with contradictory positions based on the same chart.


  2. barbacoa666 says:

    I am partially onboard. I re-purchased the Nikkei last week via an ETF, and a particularly volatile gold stock on Friday. While the Nikkei is up, BOJ policy seems to favor further increases. Also, the Nikkei appears to have pierced one long-term downtrend line, and is approaching another.

    The gold stock is just a play on the bounce. I sold some Monday. While gold has been down sharply, it is still over-valued relative to other assets.

  3. chartist says:

    you are spot on…The daily MACD chart shows a divergence with the GLD price…..And by the way, Ford Motor remains a top selection, just sayin.

  4. pensionretirement says:

    The why is confusing me. Your call was quite clear. Sell EWJ @ 11.45 and Buy GLD @120.74 for 3 months. I was inquiring if there was more to this than you wrote as you usually have well-thought out and analytical rational for your ideas. [Compliment!]

    If the entire basis of your call is look at this 6m performance chart and do the opposite, well I can get that type of top-notch planning on CNBC [Not a compliment]

    • None of the above. Its an interesting chart, and I said it made me WANT TO buy this/sell that.

      Dont read too much into it — its just a pre-holiday graphic!

  5. Ásh Davé says:

    I think Selling Nikkei225 & Buying Gold can be really good trades. I am expecting USDJPY to reverse from 101.50 level, which makes Nikkei225 a good sell. Crude oil popping up above $100 is surely gonna hurt US$, making XAU a buy.

  6. leopardtrader says:

    No price is too low to stop selling; no price is too high to stop buying (JL). Josh analysis looks elementary and illogical to me