It is apparent from decade long regression channels that opportunity exists in precious metals, and that Oil has not made its round-trip back to the bottom of relative channels (CL vs. DBC), writes Ziad Jasani Monday.

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Recorded: Nov. 26, 2018.
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From a macro-perspective, Oil down and Gold up supports a longer-term turning point for the global economy (transition from Boom to Bust).

Currently, and for this week ahead, the inverse correlations building between Precious Metals and the USD is reaching a hilt (See Correlations Map).

Any hint of a weaker USD in this week ahead has mathematical support for a strong turn up in Oil (USO, HOU-T), Gasoline (UGA) and Precious Metals (GLD, SLV, CGL-T).

However, Natural Gas (UNG) is nearing the tail end of its extraordinarily bullish move.

And Dr. Copper (CPER) is confused as to whether growth can actually support it, vs. relying on an artificially propped-up Chinese economy (FXI). Our trading community is readying to pounce long on Commodities for a swing-trade if signals present in this week.

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Direct Index Regression Channels (chart above) for Major Equity Trading Blocs depict breakdowns through the medians of the envelopes. This supports a consensus that we’ve turned and bounces for longer-term investors should be used to sell into, while swing-traders can play both sides.

Relative Channels (bottom chart) suggest that beaten-up markets (EEM, EFA, TSX, Nasdaq, Russell 2000) are more likely to outperform on any bounces ahead of us, while the Large-Cap S&P 500 and Dow are more likely to underperform.

However, we must see down-trends for the World-Ex-US (ACWX, EEM, EFA) break before we are willing to venture.

This takes us to looking for price signals that would support a bounce or the year-long North American consolidation patterns breaking support, and the World-Ex-US remaining in pervasive down-trends.

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