According to the Game Plan for Late-Cycle Investing, as the economy moves towards its latter stages, commodities tend to outperform equities and other asset classes. Frank Barbera—market technician & portfolio manager believes we're likely in that process right now & if Gold pushes through $1,365 the first push up will take it to $1,480 to $1,525 - R. Zurrer for Money Talks
Volatility Is a Return to Normal
Stock market volatility has picked up this year, though in percentage terms this really just a return to historical norms, Barbera explained.
The real anomaly occurred over the last 2 years where the market was moving straight up in parabolic fashion before culminating in a blow-off top late-January.
“Think of this more as a return to normal than anything else,” Barbera said. “Comparatively speaking, it is a rise in volatility, but at least so far we really haven't seen the stock market averages breakdown below major key levels.”
Possible Topping Process
One disquieting point is that after the big break we saw in early February, we swung from very high momentum to deep oversold conditions without anything in between, Barbera noted.
“We had this abrupt break in the market,” he said. “That's very historically unusual. Usually, when you have high momentum, you'll get a pullback, getting a push to new highs or maybe two pushes to new highs before you get a decent-sized break, and this just flipped on a dime.”