Correlation and Lag Trades

Gold and Crude Oil in normal day to day movements are not overly correlated. They do not move tick for tick or take a lead from one another as strongly as the 10yr note and the 30yr bond. However during times of volatility, that correlation can increase and they do start following each other. Additionally, it’s not uncommon to see one market lag behind the other when volatility picks up. Here is a good example…

Gold – tough market, but there is always an angle

$900 seems like a key level for Gold. This chart from March 2009  shows several points of resistance and support. Generally speaking the more a level is tested either as support or resistance, the more significant a breakaway becomes. Does this forecast near term direction? Not quite. But it does imply a breakaway within the next […]