Louise Yamada: After Gold Breaks out of this Range, 1800 is the Next Big Target

Louise discusses technical analysis and the signs of the ongoing uptrend in the markets. The past two years in the markets have been tough for both investors and professionals alike. There was a severe drop during 2018 with 2019 being a period of repair, and it appears we are continuing to new highs. However, underlying indicators have failed to improve, and overall the markets have been getting less attractive each year since 2009.

Gold has had a classic technical basing pattern for the past six years. The breakout from $1300 to $1400 was quite extraordinary with some profit-taking. Then there was another advance to $1445, and we are now in a lengthier consolidation. The current base that is forming is a definite sign that gold can continue to move.

The Dow/Gold ratio reveals if gold or the markets are outperforming, and currently, it seems like gold may outperform. Once we reach $1500, we will likely see higher prices followed by more resistance at the $1800 level.

Louise finds technical analysis to be as much an art as a science. It can be exciting, but the algorithmic aspects of today’s market make it more difficult than in the past. She points out that there have been far fewer stock splits in recent years, which has made stocks pricier for smaller investors. This has also affected volume levels because there are fewer shares compared to historic patterns.

She continues to like the technology sector because it tends to outperform and that trend will likely persist. She cautions that investors should pick and choose their stocks according to market conditions.

Time Stamp References:
0:40 – Technical analysis and the S&P 500
4:50 – Outlook for gold and consolidation today.
8:30 – Targets and resistance levels.
10:45 – Lack of stock splits and share volume issues in today’s markets.
13:20 – The technology sector will likely continue to outperform.

Talking Points From This Week’s Episode
• Technical signs of an ongoing bull market.
• The outlook for gold throughout 2020.
• The lack of stock splits and the effect on volume levels.
• Why the technology sector may continue to outperform.

Louise Yamada is the Managing Director of Louise Yamada Technical Research Advisors (LYA) founded in October 2005. Previously Louise was Managing Director and Head of Technical Research for Smith Barney (Citigroup). While there, she was a perennial leader in the Institutional Investor poll and the top-ranked market technician in 2001, 2002, 2003 and 2004. At Smith Barney for 25 years, in her years as head of Technical Research, Louise authored a weekly flagship report “Market Interpretations.”

Louise is a Chartered Market Technician (CMT) and a member of the Charted Market Technicians Association, the American Association of Professional Technical Analysts and the Financial Women’s Association. Louise appeared as a special guest on “Louis Rukeyser’s Wall Street” and frequently appears on Bloomberg TV and Radio, CNBC and BNN TV as well as in print and online media including Barron’s, the Wall Street Journal, the New York Times, Yahoo Finance and the Financial Times. She has been a frequent guest speaker at conferences and organizations, including the 2009 Fall Conference of the National Organization of Investment Professionals and the 2010 FEI NYSE forum.

Louise received a B.A. from Vassar College and an M.S. from Bank Street College of Education.

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