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Admin Notes

Changes were made to last week and while I trust that most people rolled with the changes, there are a couple of changes that some may find confusing.

The website’s front page is no longer a blog. It is a static page. The blog is accessible with one click from the front page. The graphic below shows the option to either click on ‘Blog’ for all content, public and premium as well as ‘View Public Posts Only’ for non-subscribers.

Apparently a couple of people did not realize that you can click directly on the top level link, in this case ‘Blog’. The same obviously goes for other top level links (e.g. ‘About’, etc.).

All subscriber content is accessible under the ‘NFTRH Premium’ top level menu. I’ve added the ‘Report Gateway’, which links to both the PDF report page and a page for online reports posted to the blog like the one you are reading now.

That’s it, really. Click ‘Blog’ if you want to read updates and public content. Click ‘NFTRH Updates’ if you only want premium content (I’d recommend ‘Blog’ because many on-topic public posts dovetail with the premium content). Click ‘Report Gateway’ for the option to view posted and/or PDF reports. Let me know if you have any questions above the above.

Final note: the header images rotate randomly, so one minute you’ll see the candlesticks above and the next a golden bull fighting a golden bear or some compasses and coins.

The Macro is Shifting Toward the Precious Metals, but…

This public post shows a few pictures of the progress of that shift toward the counter-cyclical gold stock sector. But let’s realize that we – insofar as we will be gold stock bulls – are not out of the woods yet, as the ‘real’ 10yr yield continues to advise. The Fed is in control, says the market.

This is not at all a gold-friendly picture. The counter-cyclical shifting macro may well be leading the ‘real’ yield, but indicators like this continue to advise that we be ready for anything, including a final wipe out the gold stock sector. That would actually be my preference because if it comes with the fundamentals screaming bullish I’d likely be able to finally give that ‘buy’ call with confidence that I am not acting like a gold stock perma-promoter.

There is also the yield curve to contend with. This shows the Fed perceived by the bond market to be in control as the previous inflationary steepener is dead and buried (to a deep inversion). When something breaks in the markets and/or economy, the next steepener should be deflationary and that would be a positive signal for gold relative to cyclical assets and by extension, the gold mining industry. But like the chart above, this one is not yet nearly in a positive situation for the precious metals.

Gold and silver (monthly chart) continue in the cyclical bear that started in mid-2020. I had originally (and incorrectly) projected a Cup & Handle for gold that had to be revised to a double top when the 2022 high failed to gain blue sky. I’ve left the Cup drawn on the chart but that is no longer a handle of any sort. It’s a mess, actually.

The next technical target for gold is support in the 1500s per this Sept. 15th update. Also note that the update included an extreme downside below 1300. While not overly likely (IMO), that would put a hard test on the bull market, which was indicated when gold took out the 1378 “bull gateway” (the bull/bear line shown below) in 2019.

As for silver, it continues to hold important long-term support at/around 18 after making a quick breakdown and reversal.

Staying on the monthly chart theme, the little rally that halted on Friday right at the daily SMA 50 (197.75, per this update) allowed Huey to hold the support level at 175. Now the question is has HUI bottomed and if not, will it bottom at support at 150, at/above 142, at/above 131 or break down and go straight to hell? What a loaded question!

As would-be gold stock bulls all we are looking for is a higher low to 131.12 or preferably, 142.51. Daily HUI is right at the SMA 50 and as noted in the update, its immediate bullish mission would be to take that out and keep it taken out.

As an editorial note, I love how oversold this monthly chart is. I love how long the correction has gone on (3rd year in progress). I love how the loudest, most pom-pom oriented gold bugs have STFU or at least been muted. Now Huey needs that higher low. Patience.

As for the macro funda (aside from still-bearish indicators like the two that opened this segment), the public post linked at the top of this segment showed GLD/DBC, GLD/SPY and HUI/SPY all looking constructive. This daily chart has Gold/SPX, Gold/CRB and several other ratios that are coming along as well. But while Gold/RINF (inflation expectations) has popped lately, follow through is needed. Remember, this is not about inflation. It is about a would-be interim failure of inflation.

Bottom Line

Sure, the macro is moving positive per the post linked at the top of the segment. But “moving” implies transition and “transition” begs patience, even if we miss THE bottom. As noted in an update on Friday showing HUI’s daily chart technical situation, “If a real bottom is getting made at this moment we will not catch it and I will not be out there touting how I called it.”

HUI ended the week as illustrated by the chart from that update. It has bounced to a logical target, but has not done anything technically yet to call it more than a bounce.

I will not break out the pom poms until I can do so in good conscience. If this is THE bottom, then the guy who’s been waving his pom poms since mid-2020 will get the glory as that squirrel finally finds his nut. If this is not the bottom, then there is going to be a lot of white knuckled hoping, praying and crow eating in the gold ‘community’, as it calls itself.

I don’t want that stink on us. I want us doing the right things for the right reasons, even if more patience is required. If the sector goes bullish I’ll note it with pleasure. But if it goes the other way I’ll take a different kind of pleasure in that.

US Stock Market (weekly charts)

This bear market has been very orderly as it has gone through its downside progression with an abundance of logic (as per our recent theme). It is a classic bear market thus far, on the order of 2000-2002 and unlike the crash of 2008 and the flash event of 2020.

There is some support in the 3500 area but even if it is just a routine bear market a more likely ending to it would be a final drop where we’d be looking at leg 5 in the 3000 to 3200 range.

However, it is a mid-term election year and US Bancorp checks in with some data advising that historically S&P 500 is weak in the year leading up to the mid-terms (check) and then shakes off the weakness over the next year. If this happens it could signal a strong and trade-able rally even if 2022 proves to have been the start of a secular bear market (which there is no technical proof of at this time).

Let’s have respect for the orderliness of the cyclical bear market but also the potential for the bear to be severely interrupted, if not concluded.

If this were to play out in 2022 then we could see a final swoosh down in the markets and then a bottom in November- February period (i.e. Q4 or Q1).

NDX continues to eyeball the 9600 area.

SOX is looking for 2000. Can you imagine the buy opportunities that could be presented if the mid-term averages actually play out?

Meanwhile, the bear market is fully on and it has been particularly mean spirited in that it has to this point offered casino patrons none of the traditional sanctuaries and safe havens, most notably of course due to the implosion in the bond market.

But let’s also consider the sad state of traditionally defensive Healthcare. XLV has formed a disgusting pattern, which measures to around 102 or so. It may be losing important support now.

Consumer Staples? Sure, it’s relatively defensive.  But it’s bearish.

Utilities? No sir, not happening.

US Stock Market Bottom Line

An orderly bear market is in progress. This bear market has not afforded casino patrons the ability to simply shift to bonds or other defensives and remain relatively unscathed. No matter where they have run – including to gold – they have been hammered.

Why on earth are so few voices out there touting cash? Interest paying cash. It’s not sexy, but it’s the only thing – other than nimbly shorting stocks – that has worked in 2022. And with each Fed rate hike it’s working better and better.

Political dynamics are in play and if markets drop to key support levels into the post mid-term window we may very well need to prepare to flip bullish for an extended period. Meanwhile, patience.

Global Stock Markets (weekly charts)

Europe is looking at a couple of downside gaps that can easily fill. Japan continues to eyeball our preferred target in the Nikkei 23000-24000 range. India is relatively strong but in not making new highs, vulnerable to downside. Canada’s TSX looks headed for a gap fill around 16000. Australia has support at 6250.

They say that there is a new axis of labor and commodity/resource rich powers aligning against the US and the west. Russia, China and other antagonistic powers are a major threat they say. Well, that may be so but the stock market has not factored it yet. China large caps, for example, are absolutely terrible. Maybe China will be an epic buy before long, but as yet it’s a firm bear market.

Speaking of the west, German DAX looks a lot like US markets, in an ongoing cyclical bear. Flimsy support is around 10600. Asia and EM are in terrible breakdowns. As with China, this could resolve into a big buy opportunity, especially in Asia. But as yet… bear baby, bear.

Brazil, like India, is relatively firm and from what I’ve read they are practicing more sound monetary policy. That bears further research, which I probably will not have the time or inclination to do. But you might wish to.

UK ETF is advised to hold 24 or it could real ugly, real fast. Note on the multi-currency chart in the Currencies segment below how the British Pound has bounced lately. That’s likely no coincidence.

Finally, our ongoing divergence to the previously bullish inflation trades, the TSX-V is at last ditch support.

Global Markets Bottom Line

It’s a global bear market. But in keeping with the US election cycle, not to mention the global anti-market USD’s potential to top out after its blow off, we can watch global for select opportunities in Q4 or Q1 2023.

Global is interesting because there definitely are distinctions between for example, EM and Europe. Patience.

Commodities (daily charts, except as noted)

I continue to view commodities as a place where a lot of inflationists are still hiding out, dogmatic views intact. The commodity/Bitcoin/inflation bull ‘influencers’ I’ve seen on Twitter have one thing in common; an anti-Fed point of view. Well sorry guys, but the Fed is winning (duh) and the commodity complex continues to grind bearish.

And inflation expectations (weekly) are not helping because they are positively correlated to the CRB index and are dropping as the Fed relentlessly hawks.

They mean business, because this inflation has come too close to annihilating the Fed’s ‘Continuum’ (monthly chart, 30yr yield) of decades of disinflationary trend (never misses an opportunity to present his favorite macro picture)…

CRB index popped and tapped resistance last week, after previously breaking down. I am short DBC in hopes that this tap holds to its traditional role and resists the index price. Of course, it could also bounce to the converged moving averages and fail there. So I’ll be keeping an eye on this. There is virtually no support until 240 should CRB fail here.

Usually we look at copper, but this week let’s look at the wider and very bearish Industrial Metals complex. Have copper and base metals touts gone silent yet? Eaten their fancily worded touts of earlier in 2022? It’s an ongoing bear market.

Palladium is curiously okay. What is that signaling? Is it a global supply/demand issue in an increasingly antagonistic world? Is it a very early signal of a turn back toward a cyclical market environment sometime in 2023? Is it a chart that has simply not broken down further but is destined to? All viable questions and I have little need for answers yet as it’s all still hands off until the macro resolves to the downside and we begin working on what comes next.

Meanwhile, Platinum is bear trending.

The Uranium sector is one that I fundamentally favor for the next cycle. But as of now URNM has broken down again and is gently shifting its trend down.

Over in the Energy patch Nat Gas is testing its major uptrend (SMA 200). I added UNG for this test, because Natty can go its own way against the wider macro and because the seasonal is positive per this update. I will probably not tolerate much of a decline  below the SMA 200.

Crude oil continues to trend down. Nice, if you’re a gold stock bull…

…because it is also on an intermediate downtrend in relation to gold as the moving averages have held the ratio down since August.


Let’s take a big picture view of the US dollar blow off. USD monthly shows that the price has stabbed a long-term resistance zone from the 2000-2002 top. What’s more, RSI is overbought nearly to the degree that halted the last spike in 2015. We managed that upturn in real time amid a US ‘Goldilocks’ phase, as the strong dollar pulled in global investment to US shores.

Today the situation is much different as the US is battling its inflation problem and exporting worse inflation problems around the world as global currencies suffer at the hands of Uncle Buck’s tirade against the usual ‘death of the dollar’ suspects. When USD tops out we’d begin to look toward support around 103. Such a pullback could go along with a coming US/global market relief situation as speculated upon above (ref. the mid-term election cycle).

The Gold/Silver ratio (GSR) has been an important part of currency considerations during the April-September phase of the USD rally that we’ve tracked from its improbable (to most) beginnings in 2021. The 2 Horsemen of the [liquidity] Apocalypse have overseen the waning of market liquidity and faltering inflation signals.

But the GSR took a hit about a month ago and negatively diverged USD, which finally took a dip last week. But technically speaking USD is only on a healthy pullback to relieve its overbought status on the daily chart. It will be important to factor what gold does in relation to silver in the near-term. A breakdown in the ratio would not only be a stronger negative divergence to USD, it would also indicate that market relief – likely beginning in the precious metals – could be coming sooner rather than later.

If GSR breaks upward and USD resumes its upside blow off then we’d watch for new lows in asset markets. This second scenario could prompt a final decline in markets during the reputed and oh so logical Q4 fright period, when lows are often made.

The daily chart of global currencies shows a couple of bouncers but everybody still trending down in relation to the US dollar.

For comic relief, let’s check in on Bitcoin, which is doing all it can to grapple with minor support on this weekly chart. The better buy would be 10000 to 12500. Meanwhile, Larry, Max and legions of promotional influencers far and wide can continue to pray that a bottom is in. RSI and MACD make the slightest hints that it could yet rally, but clear major support as noted is of the most interest for a long-term buy.

Market Sentiment

Sentiment is still in the dumps and if the market can stay bearish for a couple more months with sentiment in such a state we may well have the makings of that Q4-Q1 bottom and rally that NFTRH 725 is speculating about. The Fed and MSM are doing their part to keep people good and scared.

Sentimentrader‘s data show Dumb money in full retreat and smart money aggressively positive as well as the various short-term risk ratings. Bonds getting ready for a turn?? shows Newsletters in full retreat as of the 27th…

Ma & Pa in full retreat as of the 28th…

…and interestingly, the stock market continuing not to care that the CESI is in a solid positive divergence. Why should the stock market care about that just yet? It did not care about the significant CESI negative divergence for months on end until finally it cared… a lot! Folks, we are in the midst of a fine sentiment event and if these over-bearish readings can hold on  for another month or two we may just get a bullish contrarian play per #725’s early but developing thesis.

Finally, Investment Managers (NAAIM) were in full upchuck mode on 9/28. With the way the market went (down) after this and the readings above were taken, realize that they are all likely more contrary bullish than they were on the 27th and 28th.

Sentiment Bottom Line

The Fed is in control. The bears are in control. The narrative that is gaining momentum among the mainstream now is that the Fed is going to eliminate the inflation problem or die trying. The narrative holds that the Fed (even per some of its own jawbones) will not abort its hawkish stance against inflation even if markets and the economy blow up.

Pardon me, but contrary alarms are starting to buzz even if they are not yet sounding loudly. But let’s continue to think about the November mid-terms, the sentiment backdrop leading into it, logical support areas for markets and at least hold open the prospect of a break in 2022’s pervasive bearishness.

Meanwhile, the over-bearish sentiment is simply going with the trends in force, and they are bearish alright. It’s not yet time to act on contrary bullish impulses (which, frankly, are welling up within your letter writer).

Portfolio Notes

Roth IRA (non-taxable, no contributions)

Cash & equivalents (FDRXX, SHV & SHY) are at a whopping 97%. Portfolio is -4.8% for 2022, mostly owing to my stubbornness in holding Cannabis MSOs too long as well as riding a couple big winners (e.g. DVAX) back down. Considering the state of markets (and bonds) worldwide, I am not complaining. But in hindsight would that it were so simple as to have traded more and taken a few more profits.

The idea at this time is to stay fully intact and prepare for opportunity in the gold sector and if it leads like it so often does, maybe the broad markets as well (ref. the election cycle and sentiment work done in this report). There may yet come a point when downside to logical support marries sentiment and both possibly marry the election cycle and general market seasonal. Meanwhile, patience is and has been the 2022 theme.

I may or may not add/remove items (including shorts), but I am quite comfortable having patience at this time, collecting income on cash, while the mainstream absorbs scary stuff like the Powell headline graphic in the Sentiment segment above.


Short commodities and Tesla. I may add a couple shorts or even longs for nimble trades. I am using the ‘trading’ account for exactly that. No commitments to anything, but maybe a little fun along the way.


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Notes From the Rabbit Hole (NFTRH) is a weekly market report in which we provide analysis on financial markets.  We make every effort to provide accurate and high quality content, but this analysis ultimately represents our opinions and these opinions are provided without warranty or guarantee of any kind.  In no event will or its owner, Gary Tanashian, be liable for any decision made or action taken by you based upon the information provided in NFTRH or at ToS available for review here.