As is usually the case if these riders are going to change the macro the damage starts at ground zero, the precious metals sector. Here is the Gold/Silver Ratio (GSR) slamming upward.
The USD bull fund UUP was up hard at the behest of the GSR, per the theme of this morning’s pre-market post.
Gold was down, but silver got hammered.
While gold stock indexes/ETFs broke down from bear flags. From NFTRH 515…
HUI is doing the same [threatening to break down from a bear flag], although RSI still looks constructive. Were Thursday and Friday just a pre-holiday head fake? If so, good job boyz! But at face value it was not positive.
Continuing with the gold stock interlude, NFTRH 515 concluded the Precious Metals segment thusly…
Speaking personally, I would like not to see another ill-fated bounce. I would like to see the sector wash out amid a test the 2016 low and ridiculously (contrary) bullish CoT and other sentiment data as the macro turns, along with the gold sector’s fundamentals. That would be an epic table pounder, ala Q4 2008.
What will probably happen is that the damn bounce will resume and delay matters. But a
guy can dream, can’t he?
Looks like I’m getting my wish, after all. At least part of it. We still need the 3 Amigos to stop riding and the 2 Horsemen to bring destruction to other areas as well, however. So speaking of which, let’s continue.
Check out the Canada dollar. It just went bearish today, pooping out of what turned out to be a bear flag of its own.
While GYX was down harder than gold, which… I know, I know… US/China trade war this, slowing China economy that. The fact is that a cyclical macro indicator got hammered and gold bugs are going to want to make their inflationist leaders (at least the touts who want you to buy gold stocks while cyclical inflation is working for commodities) walk the plank or at least tune them out with extreme prejudice if they want to plan to buy the right environment. This is a step in that direction.
Along those lines, we’d need to see the oil-supported commodity complex turn today’s little hitch down into something much bigger. It can start by invalidating that ‘W’ pattern.
Finally, something I find interesting. While the 10yr-2yr yield spread continues on a flattening trend, the 30yr-5yr maintained a constructive stance today toward changing its flattening trend to steepening. Think it means nothing? Well, maybe. But it did shoot above the SMA 50 during the early February mini market crash. Today it appears to be making a less impulsive attempt at forming a low of some kind.
I think in pictures. I learn in pictures. I love pictures. And I have a have website. So voila! Above are the pictures posted at said website for your consideration. Here is another one. Ha ha ha…
Let’s carry the theme forward and see where we end up. In the best case it’ll be an echo of Q4 2008, which was the last great money making opportunity I’ve had personally; because I do not buy heavily into bubbles like the current macro, some outer reaches of which are already falling apart.
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