NFTRH Update 7.25.13, Morning Notes

Note:  After feedback from one subscriber I want to remind all subscribers that if your orientation is to establish long term positions based on fundamental value or macro outlook and you do not wish to be mentally whipsawed by technical interim updates it may be best to skip over that type of update.  Remember, it is a market full of different people with different situations.

This morning’s notes are more general, however.

From the same contact I have in the field (a manufacturer) who early this year helped us to be on alert that the ‘canary in a coal mine’ semiconductor capital equipment industry (AMAT, LRCX, MKSI, BRKS, etc.) was heating up, and hence the economy was likely to remain at least buoyant:

“Things are very busy and expected to get even busier.”

Take that for what it is worth, but it plays in with rising T bond yields, taper talk and the banks’ out performance with respect to the idea that we may yet see Main Street becoming increasingly concerned about rising prices (AKA the outwardly observable effects of the current inflation attempt).

I am not sure how this will affect the precious metals but we are not going to be precious metals obsessed and we are not going to be gold bugs.  We are going to be a group that will be gold bugs if and when necessary, market bears, market bulls and generally people who refuse to get inside anyone else’s box of thinking.

Technicals and sentiment tell me that a market correction can come along any time now but as we get additional information on the economic and/or inflation backdrop this will be factored as well.  Tom McClellan did some nice work this week about the 1st year presidential cycle (1st or 2nd term), which shows the US market is due to correct.  But this can easily come about within the context of our longer range plan that leans toward an eventual bull market top in early/mid 2014.

As for the precious metals technical case, yesterday was very normal and in my opinion necessary.  If it becomes abnormal in any technical way an update will note as much.  The sector did not quite get to the point where I would want to start buying pullbacks within an established uptrend, but it did get close.  Hence, with the protection of DUST yesterday I added SLW on the pullback.

We will follow events closely and again please, if technical updates cause any confusion or stress please consider tuning them out.