alice

NFTRH; USD, Gold & Market Notes

Here is how Uncle Buck ended the day yesterday, having bounced to the now down turning SMA 50.  That is the ultimate limit point for the bounce (just as we showed the upturned SMA 50s were the worst case limit points for a pullback in the precious metals).  If USD were to exceed the SMA 50 and hold above it, its correction would be indicated to be over.  This morning in pre-market it is trading at sub-101.

usd

Here is the view of gold, having traded down to the EMA 20 and the lateral shelf of support we noted on Monday.  It then reversed back upward.

gold

Silver and the gold miners (HUI) have so far held an even tighter pullback support level, the EMA 10, which is the purple dotted line on the chart of gold above.  Everything remains technically a-okay so far on this pullback.

As for the stock market, I thought about it and made my decision on the SPX short.  Yesterday, as the euphoria continued to gather I increased the short position, deciding not to be a wimp in the face of my convictions.  The plan (right for me and not necessarily right for you) is to scale in to bearish positions slowly into the time and price windows we’ve been mapping out (SPX 2410, ‘by March/April’ time frame).  At the same time I continue to very slowly take profits generally on long positions, in order to inch cash levels up on balance) while still adding a few long positions (ex. the bombed out QCOM and the consolidating ETSY).  But I am slowly raising cash and/or lower risk positions on a ‘net’ basis.

While I was away, I actually got to watch CNBC for the first time since I can remember.  I also watched a documentary on Warren Buffett.  I have to tell you, this is a man I very much respect.  The upshot?  CNBC had a gentleman on whose firm invests in a relative few good stocks for the very long-term and I found his ideas to be fascinating.  Yes, there are very intelligent and learned ‘bulls for the long-term’ out there.  As for Buffett, I was really impressed by the simplicity of it all; how he does not over complicate his process.

The point being that since we are all learning, all the time, I felt that I am a fractionally better investor today than I was 2 days ago for having listened to both of these men.  Take it for what it’s worth, but it reinforces my view of not trying to impose my will on the market and not trying to act (or write) like a hot shot know-it-all.  Humility and an open mind are what is called for in my opinion.

So the plan remains 100% intact.  The view is a market top of some kind (correction or even a bear cycle) to take place as the current euphoric surge flames out at, below or even above our targets (SPX 2410, NDX 5500 & Dow 21,000).

The plan also calls for gold to take the other side of the trade as the macro pivots to a more bearish phase as momentum players and casino patrons get caught thinking ‘it’ a Tump Trade! What could go wrong?’.

If this plan proves to be anywhere near the mark, I’ll ratchet up my confidence in it, do more net selling of stock market long positions and more raising of cash and short positions.  As most readers know, I always have a long-term (going on 2 decades now) position in gold, so that takes care of itself to a degree if the macro shifts.  But obviously I’d like to increase gold sector positions as well, from the current relatively light exposure.

Unless anything remarkable happens today and tomorrow and pending any NFTRH+ ideas I may find, I’ll see you on Sunday with NFTRH 435.