There are a lot of things in play today, including a notable rise in the gold-silver ratio concurrent with USD (finally, these two are both working together, which would be a component of our favored macro plan for future economic contraction, stock market troubles, etc.). But the point of this update is to further the point we made last week about the Emerging Markets’ potential breakdown nominally and in relation to the US market.
Nominal EEM (above) is now within spitting distance of the breakdown point, which would be the August low. If things went normally after a lower low, the first rebound could be a shorting opportunity in the EM’s. As it is, I took a small short position (EEV) to hold against remaining US longs *, given the following chart showing that EEM is breaking down in relation to SPY as we speculated about last weekend. Relative volume shows conviction.
The macro seems to be moving now and having been in and out the last couple of days I will not pretend to assign any clear meaning to it. Maybe it is just a post FOMC ripple or maybe it is something more. If gold-silver and USD continue to rise concurrently we have a warning on the macro.
The weekend letter is for fleshing out details and that is exactly what I plan to do.
Additional note as subsequently emailed:
“The macro seems to be moving now and having been in and out the last couple of days I will not pretend to assign any clear meaning to it.”
Meaning I have physically been in and out of my office over the last couple of days. Hence, my continuity is not what it could be.
As for the precious metals, obviously silver is breaking down now and gold continues to look lousy. HUI will either hold 205-210 or it will not. The idea has been to be in a position of strength and with the macro issues cropping up in gold-silver ratio and USD, that is all the more important. I have not done a detailed update because nothing new has happened.
I will leave you with this thought; the US dollar is strong and Americans should probably have plenty of them (on a relative basis to their asset holdings).
* I have often noted that anything is for sale in my personal portfolios, and when macro signals start making moves like this I consider that idea to be front burner. Anything can be sold at any time and that includes NFTRH+ ideas.
