The ratio of the Banks (KBE) to SPX (SPY) is breaking bullish
I don’t care what you find out there on Twitter or the gold websites, the fundamentals for gold have been bad for 1.5 years now and that goes double for the miners. People who listen to smart people with dumb information get what they get.
Even after the Fed’s little spook fest this week the market is, by several internal indicators, still cyclical, risk (sort of) ‘on’ and biased to inflationary and value. Yes sir and ma’am, it sure appears I was wrong in leaning toward a continued seasonal bounce in the precious metals and even if that somehow regains its footing it will be against the proper fundamentals, especially where gold miners are concerned. I’ve been 100% consistent about that.
So here is one internal situation in line with the rise in long-term Treasury yields (and a possible new steepener of the Yield Curve… ah, don’t completely give up on gold).
The Pigs, err banks have maintained a daily chart uptrend after a second hard test of the SMA 200 and more importantly to our macro view, the KBY/SPY ratio may well be breaking its downtrend. That ratio is one of a bunch of internals indicators we track every week in NFTRH. Indications like that mean only everything to proper portfolio balance (which I am personally in the process of trying to get a handle on now).
It’s not good for gold. It’s not good for a one-size-fits-all bear view and it could well be good for the inflation trades, until they terminate. And folks, dey gonna terminate. Just a matter of when and where. We have targets on both the CRB index and some indicators.
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