Strategy is working well so far

It’s the Q4-Q1 relief play, baby

It’s getting easier and easier now to be bullish, but that is the product of FOMO* in the herds. Hence, today was my last day of buying** fallen items across, in order of preference and general acquisition, the Precious Metals, Emerging Markets, outlier/specialty Commodities, select US sectors and Energy (yup, Energy, the formerly “last inflated man standing”) off of their 2022 bear markets/corrections.

Early in Q4, 2022 it was not so easy and frankly, the Santa seasonal dud gave me some pause about my stance. But with patience, the play is playing out. In fact, some unbiased sources (you can’t set your compass by perma-biased gold and commodity/inflation bugs) that are well followed are talking about a new bull market. Perfect!

That is what we want, or at least what I want. While I may have appeared to be questionable at best a few months ago when writing about this in NFTRH, today it is a firming situation. With the laggard, SPX, finally making its attempt to get above its SMA 200 as so many other stocks, indexes and sectors have done, there has been a new rally leg, at least. Could end tomorrow, could keep going indefinitely.

It all hinged on the November 3rd low that SPX held. Had that given way at any point in Q4 or Q1 I’d have had to eat my Q4-Q1 rally crow. But as of today, 2023 is nicely profitable so far. Yay me!!!

But there is more to the strategy as sentiment will guide from here on. There is a very logical path that we are on and it combines sentiment, distorted indicators and technical analysis, probably in that order. While I have to save the details for NFTRH subscribers, my current view is that if I remain bullish past a certain point “yay me!!!” is going to turn to “boo me!!!”. Best to let the FOMOs buy from me if I can time it decently.

I am no day trader and I am no long-term investor. Macro swings of one or two quarters and bull/bear cycles are what’s right for me. Never will I endure a bear market exposed to it and usually will I not time perfectly my profit taking. But generally it’s the macro swings that I am interested in, whether shorter or longer. We’re on a macro swing right now.

* Fear of missing out.

** I may trade out of a few things and trade in to a few things but generally am as exposed as I’d like to get given the fact that cash and short-term bonds (of which I have a decent amount) are still paying out and bullish, respectively.

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This Post Has 4 Comments

  1. Roger

    Would you wait to for a pullback to enter the general market and gold/silver miners now to join in on the q1 releif rally, or do think there still is plenty energy left in these assets?

    1. Gary

      Well, it’s not a cut and dry question because I have a much more bullish view of gold miners than I do the US stock market, for example. So I don’t envision (at this time, anyway) dumping all my miner positions in H1, 2023. But I’ll probably take some profits or hedge when I think the turn in the broads is coming and might affect the miners for their first major correction of the new bull move.

      If it were me, I’d be happy that cash/bonds are paying and look for 1-2 day pullbacks in most favored items and tag along. But as noted in the post, I am in essence done and not reco’ing being bullish now because we are in the realm of the FOMOs.

  2. Roger

    Thanks for the reply, I’m mostly looking for entries in miners as well if to play this q1 rally. Would have tought that gdxj/HUI would need to cool off a bit to lett the MAs catch up.

    How low do you think gold/silver/miners can go when q1 is over and the deflation scare comes in over the market? As I understand it the play is to be out of everything when this happens, and then join in on the slingshot for the miners after?

    1. Gary

      Well Roger, in my opinion that is getting well out ahead and is the reason I only labeled it Q4-Q1. Lots of moving parts. But it certainly is viable that the waning of inflation would morph into a deflation scare. That would likely pressure gold stocks because… inflationist gold bugs love to panic when miner fundamentals are improving.

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