Post-CPI observations, per request

You may by now recognize Mike, who is a new NFTRH subscriber and who has had a lot of input and questions in the comments section. I think that is of good value, because it adds color to individual posts. Mike asks (by email)…


CPI flat, inflation expectations down.

–Gold, why down after quick pop?
–Wheat, why up?
–Oil, down, understood I think
–Stocks, up, understood I think.

Anyway, I am going to stop here, because I reread some part of 717 and my brain just isn’t getting it.

Wouldn’t mind seeing a couple paragraph post on why you think things are going the way they are after this report.



Well, CPI moderated a bit and that is as expected. Not necessarily for this report, but moderation has been due. Here is an excerpt of bullet points having to do with the matter of Payrolls and CPI in NFTRH 717.

nftrh 717

I’ll answer the questions as best I can.

  1. Gold down after a quick pop? Who cares? Oh wait, those micromanaging gold’s every twitch. I forgot. IMO it is actually good that gold did not knee-jerk the CPI report. Gold always gets punished when its boosters get on board too confidently in the wake of any individual news item. ‘Risk off’ gold will get where it is going and it is best if it gets there with as little fanfare as possible as ‘risk ‘on’ has a bit of a party today. In markets, our human brains see and factor events in real time. But there is no day to day, hour to hour correlation. Patience.
  2. Wheat is up because the Ags are up and Wheat has been due for a seasonal rally after tumbling to support. Hence, why I own Wheat (WEAT), Ags (DBA) and a ‘fert’ (MOS, while letting NTR go about screwing with the ‘death cross’ believers).
  3. Oil is down with its intermediate trend, which is rolling over. Energy was the poster boy for the 2022 inflation hysteria and as noted into June, the “last inflated man standing”. The reaction makes sense, but since no individual market need necessarily react the way it is ‘supposed’ to on any given day, it could easily have been positive today as well. Either way, I have little current interest other than the excellent improvement to mining fundamentals that a continued decline would bring.
  4. Of course stocks are up! And of course Tech is up heartily. This was the planned outcome and it is due to the ongoing sentiment relief from the tyranny of the previous hysteria, which was inflation and resulting rising interest rates.

I cannot answer for lazy analysis out there blathering about inflation, deflation, conspiracy or anything other than the correct market signals, which we anticipated well. If it’s a conspiracy, how come NFTRH projected it back in June? Stocks are up because they were supposed to be up if our analysis would be proven correct.

Gold could easily have exploded higher but it is best that it did not. Keep the pom pom brigade nice and muted. That’s the ticket. It makes me more bullish, not less, to hear only complaints among the crickets.

While the above reviews where we have been after correctly projecting it ahead of time, it’s what’s ahead that truly matters now. That’s all I care about. CPI came in a little light and that is to plan. Now we have to continue to update, refine and stick to the plan going forward.

On this page we note what NFTRH is and what it is not. One of the ‘is not’ items is as follows. In particular, in order to ‘get’ me, I ask you to leave aside the effects of previous ideological associations you may have. Part of my disgust with today’s market information cacophony running 24/7 through the interwebpipes is the prominent and very wrong garbage people are subjected to and often fall for, given the pitches that are usually wrapped inside the supposed ‘analysis’.

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This Post Has 14 Comments

  1. Anonymous

    Couldnt agree more…..Gold exploded right up to a normal resistance level 1827 ish…..and was immediately repelled like a noxious rotting fetid piece of old meat in this sweltering heat wave we are experiencing..and that is GOOD. \market is separating out the wheat from the chafe…..the weak hands from the strong hands by making it HARD to make money ……this is welcome news for any seasoned longer term gold bulls…..we arent yet quite ready for the momo crowd….that time will come. Steady Eddie slow uptrend for now culminating eventually in a type of crescendo when we can use the MOMO crowd to finish the up leg when its time.

    1. Gary

      Perfectly said!

  2. Michael B

    I, for one, am and continue to wait for Blood in the Streets in the PM patch. And in doing so, it is essential to ignore that cacophony of kookery that Gary keeps reminding us of. Ignore it! Let the NFTRH indicators steer you and your natural impatience. Go take a walk or do something else today.because the market isn’t ready to entertain today.

    1. Gary

      Well, the NFTRH indicators are for a rally. Ultimate bottom? Well, there could be a problem when the broader macro relief thing expires. But generally the gold sector is getting ready now and I am positioned for a rally at least.

  3. Anonymous

    in case you havent walked out of the cave recently, the carnage has already been proffered! geez

    1. Gary

      Agree. It’s been a hard sell down, but not a crash.

  4. MikeC

    This is my problem (my problem, specifically NOT anyone else’s, though you may be similarly inclined). I read the response (thanks, Gary), and then even in the two responses here, I see “steady Eddie slow uptrend” in one and “waiting for blood in the streets” in the other.

    And the problem is, I am not saying Gary or either of the comments are wrong…just that *I* can pick and choose the path *I* want to take and all three of you can be right or wrong at various times.

    I have a couple people on Slope that I follow more closely on their comments and they are wrong, currently. Tim is wrong, currently. He always laments about selling his puts at the top sometimes, for example.

    I am just *thinking* I want to understand. But usually (I would say until recently MOST of the time) if I did 180 opposite of what I did do, or thought I should do, I would have done better. It is incredibly frustrating having been an EE all my life and you very clearly have conclusions you can base choices on because it is real world, take a measurement or do a calculation type stuff, not this market stuff that is like probably 50+% emotions and BS.

    *I totally get that I should not be micromanaging this stuff.* I just had a long conversation with my wife about this. The anxiety inducing part is being 55 and wanting to retire, or at least go part time, within 5 years. If the market doesn’t cooperate, or I get something exceedingly wrong, I can screw the stuff up, and significantly impact retirement. If there were not an i-bond amount limit, I would probably have moved everything in there!

    It has gotten to the point that after these last rate hikes, I have looked at annuities again. The payouts have jumped significantly. A large part of me is really tempted to cash a lot in and buy an immediate annuity.

    Just to not have to deal with the concern anymore.

    Anyway, rant off! :-)

    1. Gary

      First thing is to understand ‘trader’ vs. ‘investor’. Those people on Slope are pure day traders, from what I’ve seen. I find it unhealthy to read that stuff. Stuff that is the product of in-day observations and reactions. It seems to me Mike that you would do well to be who you are and stay who you are.

      That does not appear to be a day trader, so the thoughts of day traders should IMO be completely tuned out. And the thoughts of others like we three who’ve commented here should be filtered or tuned out as needed if they create dissonance internally.

    2. largefeline

      Here’s my perspective.

      I’m in my early 20s. I’m not putting the house on the line in my portfolio. The emotionally relative value is something along the lines of “I still don’t feel it as something tangible and I don’t feel fear when imagining losing it all”. From the beginning of this year I’ve been curious about global markets, what drives them and how they function. I find the human-computer side of the trade completely boring. Sure you can probably boil it down to a stochastic set of rules that’s statistically guaranteed to generate you some yield that offsets your engineering costs, but I don’t find that fun, I think it sounds like a vivid description of a fever dream.

      I truly enjoy my time reading thoughtful texts by the likes of Gary, John Hussman and Grant Williams (any more recommendations I would greatly appreciate). I don’t feel like activating my reinforcement behavioural patterns in reading bazinga articles, twitter feeds, daily executive summaries and other bullcrap. Machines can do that. What has been the most important lession for me though is that markets are not at all rational and efficient. They are moved by the psychology and wims of hedge fund managers, government fiduciaries and people with monetary power and taste for blow (Mickey Mouse and Santa Claus) and that’s just how it is. More or less the rules of the game are set up so that the default strategy is “stocks go up a couple decades then crash”. Besides, a lot of things in life are cyclical and I feel like our impending problems are due to our impermanence and inability to think for more than a lifetime ahead of ourselves (maybe this is just the trend for the next 100 or 1000 years, who knows).

      The thing is, I don’t really want to think about my brokerage account more than a couple of times per week and surely I wouldn’t want to live with a fever dream anxiety every day. I do realize the fact that being a tardy trader could mean I still lose big even if I get the directions right, but I still haven’t and I’m still having fun.

      I think Gary’s analyses of the last few market cycles have been both very valueable and exactly in line with his mission statement. To me, this really is a digestive service that shelters from the information overload of the massive sea of minute detail.

      1. MikeC

        Wish I had your insight 30 years ago!

      2. Gary

        If only I had that level of perspective and sophistication at your age. Very impressive.

  5. Brad

    Gary, I’m a new subscriber as well and just curious since I think you mentioned you are in 85% cash currently if you are still expecting a return near or below the lows of June?

    1. Gary

      Hi Brad, that has been the plan and still is the plan, pending incoming info. SPX never did hit the downside target range, although it did get close. Caveat: In 2020 I had a lower target on SPX that never quite got dinged and that kept me from loading more positions than I did sooner than I did.

      BTW, I’d like to keep certain info about positioning private. Cash level is no biggie, but questions ID’ing positions, whether stocks or cash, would be best if privately emailed or made on protected subscriber posts like the update just posted a little while ago.

      That update by the way has a view of something that could require the current NFTRH view to be altered. As yet, no and I think it’s unlikely. But it’s an example of what could happen to alter the view.

      1. Clint

        Lots of good info in this thread. Thanks Mike for asking.

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