John Roque: The Trend Tells Me that Gold is Going to Make a New All Time High
John feels that any important move in an asset class should have a long-base setup. Gold has built up an impressive base over several years, and this strongly suggests that it can push past its 2011 highs.
The next move up will follow another consolidation phase. Afterward, gold should head for new highs and typically moves in gold have been in 300 dollar increments.
Indicators have less utility today than they have had in the past; over time, the participants in the market have fundamentally changed. Indicators are less useful today because algorithmic trading systems bring their own logic and mostly don’t care about traditional indicators.
Investors do themselves a great disservice by trying to outperform the S&P 500. Traders have to exercise some fiduciary responsibility while an index does not.
Investors need to concentrate on trends and filter out most of the noise. We damage our investing positions if we challenge and overthink them. Fundamentals don’t change that often, so stick to your thesis and watch for changes in the trend. It’s essential to focus on what you are good at and develop those strengths.
The Wolfe Research team prefers to watch the action in the S&P 500 carefully because what happens in the United States tends to dominate the rest of the world. They expect Japan to do well through 2020, and Asia may also outperform. Canadian and Australian resource stocks look set to perform well. Lastly, watch the yields as they seem range bound from 1.4% to 3%.
Talking Points From This Weeks Episode
• Long bases are essential for big rallies.
• Gold should move higher after another consolidation.
• Investors should focus on their thesis and market trends.
John Roque is a Managing Director of Wolfe Research. Mr. Roque joins Wolfe after seven years on the buy-side at Soros Fund Management and Key Square Capital Management. Before 2012, he worked for 20 years as a leading macro analyst on the sell-side at WJB Capital Group and Natixis Bleichroeder, where at both firms, he was the top commission producing analyst. Despite working at smaller firms not focused on rankings, Mr. Roque was a ranked Technical analyst by institutional investors in Institutional Investor magazine’s All-America Research Polls from 2009-2011.
John received both his BA with Honors in Economics and his MBA with Honors in Financial Statement Analysis, International Trade & Development, and International Economics from Fordham University. He resides in Westchester with his wife and children.