Note: The following is derived from Harry Browne’s “Permanent Portfolio” model. Browne’s thesis was that a portfolio of stocks, bonds, gold, and cash–equally apportioned (25%) across a single portfolio–might provide a well-hedged model for both portfolio growth and safety. Our hypothetical model slightly varies from Browne’s in that it uses futures contracts for gold and 30-Year Treasuries.
As of Wednesday, May 22, 2020, the S&P 500’s (SPX) volatile rise rally brought it upwards of 2% mid month. Gold (GC) continues to rise steadily, up 3.44%, while 30-year treasury bonds (ZB) have declined -1.09%. The dollar index remains steady at 0.14%.
It appears as if investors’ safe haven preferences have been leaning toward gold and away from US treasuries. It’s also notable that both gold and the S&P 500 have been rising concurrently.
The S&P 500 has broken above resistance at 2968.00 though with little volume.
Gold remains within a wide trading range between 1775 (resistance) and roughly 1675 (support).
30-Y treasuries are currently bouncing off support at 177’11, also trading within a narrow range to which 183’03 marks resistance.
Trading futures, options on futures, and forex involves substantial risk of loss and is not suitable for all investors. The use of leverage is not suitable for all investors and losses exceeding your initial deposit is possible. Carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources and only risk capital should be used. Opinions, market data, and recommendations are subject to change at any time. The lower the margin used the higher the leverage and therefore increases your risk. Past performance is not necessarily indicative of future results.