Are Diamonds a Junior Miner’s Best Friend?

GDXJ is going to break one way or the other pretty soon.  It’s in a Diamond, which is a consolidation pattern, usually thought to have no bias between trend continuation (in this case up) or reversal.  If it ends up breaking down it will have been a volatile reversal pattern that whipsawed everybody up and down for a month, making sure every last desperado who … Continue reading Are Diamonds a Junior Miner’s Best Friend?

alice

NFTRH; A ‘Look-Ahead’ at Investments for a Weak Dollar

A look-ahead to some of the US and global markets and sectors that would benefit from a weaker dollar, which is the theme shaping up on the macro as the Fed backs away from support of the currency and joins the global currency Whack-a-Mole game.  Obviously, that which has suffered disproportionately under a strong dollar regime would benefit if/as it weakens.

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At the Gateway to a New Phase

The market, despite weakening corporate profits and several other headwinds, has decided it liked what it heard from the Inflator in Chief yesterday as it has scored the game Janet Yellen 2, Hawks in Drag 1 and US dollar 0.  Is it a final score?  I am not sure how our hawkish transvestites can be taken seriously now.

But with a market running on the black boxes of a million quants, large and small, who knows what will happen the next time some clown decides to eat a microphone and dispense dissonance into a situation that Yellen seems very clear on; as my late friend Jonathan Auerbach once famously said (it was famous to me anyway) as we prepared for the post-2008 inflation phase, “it’s inflation all the way baby!”

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alice

NFTRH; Post-Yellen

Today I did something I rarely do and listened to nearly the entire Yellen speech.  The reason I usually don’t listen to these things is because I don’t want to get caught in a mental whipsaw if markets start reacting to the jawbone du jour.  But considering that in March alone the FOMC meeting (ultra dovish) and the subsequent clown show (hawks in drag paraded out just a week later) I felt that I needed some signals from Yellen.

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Janet Yellen

[edit] Ah, she just mentioned the high “debt to GDP levels” in the Q&A.  Thank you sir!  Point made. She just jawboned QE 4, which is why I decided to make a post about the speech.  She did not mention “QE” but hinted about buying T bonds in the absence of bullets left in the Fed Funds rate chamber. The theme running through this waffling … Continue reading Janet Yellen

2016 Gold Headline Extravaganza in Full Swing

With the monetary metal popping by a couple hundred bucks an ounce in 2016 people are coming out of the woodwork to advise us about its vast upside and on the other side of the spectrum, its dangers.  I have done a lot of bitching and moaning about gold’s promoters and bashers alike, because they seem to use similar sets of incorrect assumptions from which to extend their theses.  Let’s focus on one of the negative articles; in this case a negative piece on gold mining.

I think I am going to do this on a semi regular basis going forward, with both bullish and bearish articles that I think are not giving people a straight scoop (as I see it, anyway).  For some reason gold stirs emotions far beyond the average asset.  There is ideology, religion, politics and flat out misunderstanding in the worst of gold analysis.  Gold mining can be even more misunderstood due to the sector’s unique counter-cyclical dynamics.

Gold Equities Are Not Good Long-term Investments  –Seeking Alpha

I agree wholeheartedly with the title.

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Macro Changes and Future Inflation Problems

Ever since beginning the ‘Macrosom‘ theme in July (and updating it here), NFTRH has been managing macro changes that would positively affect the gold sector, and quite possibly have a negative effect on broad stock markets.  Early on in the precious metals bear market we noted they were “in the mirror” and opposite the stock market, which on the post-2011 cycle has been the beneficiary of the Fed’s inflation, instilling confidence in their policies by conventional market participants (after all, the right assets were going up on this cycle).  In August, it appeared that the first real thrust in the direction of our macro theme kicked in as the stock market cracked.

The mechanism of this confidence racket, which allowed the promotion of inflation right through QE 3, has been a global deflationary force muting inflation signals and providing the US with a Goldilocks benefit as the US dollar strengthened.  To this day the economy continues to ‘service itself’.  Manufacturing and exports weakened under the regime of the strong USD, but those strong dollars bought a lot of services (which make up the vast majority of the economy) and consumer-related commodities.

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S&P 500 on the Cusp

A couple days ago it was noted that stocks are high risk, but also that I was more long than short.  Yesterday we reviewed the still bearish state of the broad market.  This bounce has tested my patience (vs. the preferred scenario seeing it as just a relief bounce) but this morning it looks like we may be getting somewhere.  If pre-market holds up, here is what SPX is doing…

spx

I am no longer net long after yesterday and still have a full short on SPY, which was increased last Friday during the obnoxious greed fest.

One thing that the market has going for it is that though sentiment is fully recovered (which was the job and definition of a relief bounce) the optimism (red line) and pessimism (green line) reacted pretty much in real time to the small down hitch yesterday.  From Sentimentrader

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Broad US Stock Market

One question; do you think these are bullish yet?  I have been compelled to turn the resistance lines green for tentative support.  But in my opinion, none of these items have made a bullish signal yet.  It’ probably worth watching Tranny’s Q4 highs closely. Subscribe to NFTRH Premium for your 25-35 page weekly report, interim updates and NFTRH+ chart and trade ideas or the free … Continue reading Broad US Stock Market