Stocks, precious metals and the general commodity sector are all rising today. The Dow and S&P 500 are right at ‘bounce’ resistance now but a negative for the bear view is that leaders like the NDX and SOX are above their 50 day moving averages.
Yesterday’s bull fest seems to have quickly brought on thoughts of ‘here we go again’ if anecdotal evidence is any guide (referencing people’s comments at bearish sites like Slope of Hope among others). There were also a couple of emails from NFTRH subscribers putting forth thoughts on a near term bullish case for US stocks. One of those emails is copied here at the author’s suggestion. I will answer as best I can, point by point…
Franco Nevada (FNV) is described as one of the best (if not the best) run precious metals royalty plays by people who seem to know their stuff, fundamentally. What I…
GLD is on a weak bull signal. It must get above the downtrend line or risk fading to neutral or bearish.
The following is the opening segment of this week’s Notes From the Rabbit Hole, NFTRH 276:
Somewhere along the road from the 2000 bottom in gold stocks to the 2008 flame out of inflationary hysteria, the gold stock sector went from counter cyclical first mover to ‘inflation trade’ also ran. Gold stocks put in a secular bear market bottom in 2000 just as the US and many global economies were topping out.
Then came the era that NFTRH has labeled ‘Inflation onDemand’ (IoD). The economy was successfully* inflated by Alan Greenspan early in the decade as easy monetary policy fomented an epic credit bubble, which took over and did the heavy lifting for a cyclical bull market and buoyant economy that terminated hard in 2007/2008.
During this time of IoD ‘inflation bulls’ and commodity bulls who had all the answers for a newly inflation-phobic public emerged and took center stage. Misperceptions were formed, cemented and driven home. Nowhere were the misperceptions more intensely and dangerously embedded than the gold stock sector, which at its core is different than most commodity sectors and indeed, most stock sectors. Introducing another one of our ‘busy’ charts to illustrate…
Okay, article over… the chart says it all. No more words necessary! :-)
The chart is a confusing jumble you say? Okay then, let’s take it point by point.
The stock market is taking the bounce right at its do-or-die point, which was to maintain the December lows. Gold is taking the counter to that trade and getting clobbered.
A partial ETF update beginning with GLD, which remains above the support parameters and on its bull signal.
GLD remains on a bull signal with MACD above 0 and the price above supportive 50 day moving averages.
GLD is neutral and on the cusp of a bull signal if support holds and the MA 50’s are exceeded.
There is talk of economic growth and 'taper' in the air and the precious metals are with that script this morning and declining. As reviewed in this week's report, gold…
In light of market moving events (Goldman’s ‘stocks are over valued’ Monday, JPM’s ‘PC’s are on a comeback, good for semiconductors’ Tuesday and this morning’s entry from the World Bank ‘Global growth to pick up in 2014, led by US’) in the media, we tighten up the ETF focus a bit.
How I [they] Learned to Stop Worrying and Love the Bomb [Market] paraphrasing Stanley Kubrick’s great cold war/nuclear paranoia film Dr. Strangelove (1964).
The USA thrived during a 20th century rife with war, famine and depression. This was a wealthy country however, founded on principles of self-reliance and valuing thrift, saving and honest work for an honest return. Add in unparalleled productivity and economically at least, the positives more than outpaced the negatives.