NFTRH 741 [edit/update added]

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[edit] Regarding the 30yr yield continuum below, a subscriber inquired about how I interpret the yield and its future direction. I answered thusly…

I wish I could be clearer. But it’s pretty confusing out there. But generally what I am saying, when considering the 30yr, M2, yield curve and other distortions is that the Fed we’ve had over the last 2+ decades may not be the Fed we get going forward. In other words, I am considering that they may have blown a gasket.

As to whether it resolves inflationary or deflationary, while I had originally interpreted the 30yr yield as implying a new inflationary macro [if it has begun a new long-term rising trend to resume after the current pullback in inflation signals], lately I am considering the opposite. In other words, if the thing starts to deflate [with yields dropping or even tanking] as it did in 2000, 2008 and 2020 I am not sure they have the tools to stop (manipulate) it this time.

#741 takes the form as a blog post this week because, frankly, I enjoy the format and have a bit of a time constraint this weekend.

Not much has changed from our recent themes with a global bull rally in play that includes a wide range of asset markets, from Asia/EM to US stocks (lagging) to several commodities and of course, the precious metals.

It is also attended by signs of failure in the US and global economy and as we’ve expected for months now, fading inflation signals. The market does not move at the pace our brains fire off the signals we read and reactions we may have. The market moves at its own pace, but it sure does appear to be moving to the current plan.

The plan is/was ‘Fed hawk anxiety relief’ first, dis/de-flationary anxiety second. It takes time.

A Signal From NYC

In addition to the headlines about big Tech titans laying off thousands, Goldman Sachs laying off thousands and the Baltic Dry Index of global shipping costs tanking (thanks to Kurt for the heads up) in checks my daughter, in her final year of school in NYC, to advise that rental property rates in Manhattan are dropping noticeably.

She advised that rents are continually being revised downward on StreetEasy, a NYC rental hub. Great, after I got dope slapped for the final time (6 years) last spring, paying an exorbitant broker fee on top of all the other standard costs just to attain the right to rent a small space in a decent neighborhood. NOW deflation sets in!

Coming off a massive bubble like this I advised her that it’s very possible “you ain’t seen nuthin’ yet”. While the continuum in both time and in my indicator of the same name (chart below) have been the backbone of what has been in play for decades – deflationary signaling in bonds that gave license to the Fed to inflate at will at every point of economic/market stress – it is not wise to continue to extrapolate that continuum forward.

In other words, if central bank manufactured inflation was the product of deflationary signaling over those decades, might not deflation be the product of the inflationary signaling that literally broke the charts in 2021?

It might. While making predictions is the errand of fools (and an even greater one of those who believe and act upon the predictions of others) it is worth considering that given distorted indicators like M2 money supply through the roof and way above trend, the 10-2yr Yield Curve inverted to levels not seen since the early 1980s and the Continuum itself, having broken its decades-long trend, that maybe extrapolating to the future what has been in the past will no longer work.

30 year treasury bond yield

In other words, the spike on the chart above may well be seen as a sharp implement that finally pierced “the Everything Bubble”. Worth panicking over? No. Worth consideration? Oh yeah.

Maybe this time it’s not as simple as ‘buy the pullback’, as it was in 2000-2002, 2008-2009 and in a flash, Q1, 2020. Maybe a new regime is taking place.

With the potential for a new regime, the play has been “relief first”, such as it has been, under-performing in the US. But then the potential for “relief” to morph to fear as inflation falls too far. You see how absurd this continuum of Keynesian policy has been, right? Every deflation scare has resulted in more inflation by policy. Well, what is the recent inflation scare going to bring on?

Point being, there could be much further to fall in the various aspects of the Everything Bubble that perma-bears have been railing about for 20 years. So even if I could afford it, I would not be running out to buy NYC real estate. We have been trained to think otherwise, but when I consider the distortions in M2, Yield Curves and our handy Continuum above, I will at least have an open mind about what’s ahead.

To close the segment, let’s again review the situation in M2. Much like the distortion from the decades long norm by the Continuum above, here we see post-2019 money supply above even the accelerated inflationary trend from 2008 to 2020. In relation to the trend from 2000 well, that is one hell of a macro distortion signal, in my opinion. If M2 continues to ‘adjust’, well, relief may well morph to fear (of a completely different kind than the inflationary fears of 2020-2021) because the Fed has already kicked this inflationary tool out of whack and potentially broken it for some time to come.


Q4-Q1 Rally Limps On (daily charts)

The S&P 500, the headline index of the US, held the equivalent support that we noted for its futures (ES) in an update on Friday morning. It then doinked into the underside of the downtrending SMA 200. Not stellar by any means. SPX is grappling, not bulling. But the rally prospect is intact and other segments of the US market and certainly global markets, are leading and in better shape. SPX is lugging around all that over owned large cap stuff.

Side note: RSI and MACD have ticked positive again. I guess that’s something.

spx, broad us stock market

One thing still in favor of US stocks and the economy is high yield credit spreads, which rise when economic stress is in play. To the contrary, relief has been the signal since 2022’s inflationary angst peaked. This is in line with the current view of “market relief” after the first leg higher in stress in ’22.

high yield credit spread

Let’s look inside the US market’s sectors. While it is no great feat for the Semi sector to be leading bombed out big Tech, it is notable that Semi is in an intermediate uptrend vs. the broad SPX. I have 3 positions in Semi, all in the theoretical ‘front end’ of the sector, Semi Equipment (AMAT, LRCX and global play ASML).

As for Tech, the market seems to have left it for dead, but if the rally drags on long enough there could be some catch up as man and machine start to wonder if maybe bargains can be had. They once adored MSFT, GOOGL, AAPL, AMZN and others. Now? Not so much.


Some other aspects of the US market include large caps under performing and Mid Caps, Small Caps and Value intact, and Growth not surprisingly on the same path as Tech.

us stock market

As for sectors, relatively defensive Healthcare has been consolidating (dragged by its services components like the Insurers and CVS/Walgreens), but its Medical Devices, Biotech and Pharma components are still intact to the rally theme. Transports are okay and defensive Utes are fading.

us stock market sectors

Big tech held the SMA 50, so that is something at least. I am still open to a surge here, which could actually signal the beginning of the end of the wider stock rally if/when it happens. There is Semi in a potential bottoming pattern (Inverted H&S), along with potential bottoms in Communications and Cloud.

Staples are another defensive (like Healthcare and Utes above) that is struggling while Discretionary is similar to big Tech, as it usually is.

Finally, the broad SPY is obviously doing what SPX is doing, Energy holds its uptrend (I am long NOG & AR), Industrials cracked but are intact, Financials are unspectacularly intact, Materials looks interesting (CBT is my main watch item) and the Real Estate ETF (mostly REITs at last check) is trying to cling to ‘Fed dove relief’ hopes while also coping with the aforementioned decline in property values but getting a tailwind by declining bond yields.

us stock market sectors

Global Stock Markets (daily charts relative to SPX/SPY)

As we have been lately, I’d like to keep up with the trends in global vs. US and let individual global citizens track their nominal indexes as they will. Thus far most of the world has been outperforming SPX/SPY. In general, if the US (SPX) is intact, global markets are more intact (and bullish).

As a side note, much of this is driven by the weak US dollar and with reference to an update on Jan. 17 showing Uncle Buck at a long-term support level at least some level of caution may be a good idea.

Europe and in particular Germany are leading the US since the time of the USD top in September.

UK is on the same theme. It is interesting how global markets are rallying on a Goldilocks whiff, as their currencies strengthen against the world’s reserve currency. It’s like a microcosm of what happened in the US from 2014 to 2019 (ish).

Canada Senior (TSX) continues to be modestly leading SPX.

Canada Junior (CDNX, TSX-V) has recently been making a move within its major relative downtrend. A rise to the downtrending SMA 200 is another of those signals to watch for potential ending phases of the broader rally. Ref. January 11 update showing nominal TSX-V starting its move.

Australia is fine in its leadership to the US.

Asia is a big component of the global relief, with its general anti-USD theme coupled with the ‘China reopening’ story.

EM, which includes Asia on the out-performance theme as well. Side note: I took profits on both EEM and TEI last week, not wanting to overstay my welcome, although nominal EEM has a measured target higher still. In other words, if the global rally continues so too should EM.

India and Japan are pictures of two countries that had been relatively firm before the anti-USD rallies began, but are now rolling over to varying degrees vs. the broad US stock market.

Brazil continues to struggle to establish an uptrend vs. SPX, but the bias is positive. Argentina… well, what else? Bullish but vulnerable if previous inflated bubbles are any indication.

Precious Metals

Friday’s public article updates the bullish big picture for gold stocks. Again, I would not be bullish on gold stocks and certainly not more bullish price wise than on gold, unless their were real rationale for such a seemingly crazy view. Real rationale does not include inflation or China/India gold buying among other reasons promoted by, well, promoters.

Real rationale does include the prospect for a post-bubble contraction where the Hoye squirrel finally finds his nut (I write that with a smile, because though his view has been foiled the last few phases, he is no promoter and he’s going to be right if some of the indicators we track are indeed flashing something new and unheard of for the last few decades.

Meanwhile, let’s retreat back to our daily chart of GDX to view the nearer-term situation. We originally projected potential for GDX to take a healthy pullback after filling one or possibly both of the nearest upside gaps in an update on Jan 16. Instead it stalled right there on that day. But with the gaps unfilled I do not want to be short, even to hedge. To boot, overbought has been worked off and well, it’s an uptrend.

Importantly, GDX/HUI are also still trending up vs. gold and broad US stocks over the same post-September period that global stocks have asserted leadership). One thing I don’t care for about that with respect to the near-term is that gold stocks have been as ‘anti-USD’ as anything else. In their best fundamental suit, the miners would be bulling to the bewilderment of many while other more inflation sensitive plays fade or drop as USD firms (due to a liquidity bid if/when markets fail). Read that again or as many times as needed, if it’s not clear on the first take.

The best of the bull market will be when most everything else fails. We are a long way from that point and when it does come the gold miners are likely to take a hard correction in sympathy. Sorry, but we do not do easy analysis here. We try to be right and in tune with reality.

SIDE NOTE ON THE MINERS: I am expecting an improved earnings season starting soon. In the best case the miners would get dinged into FOMC and provide a buying opportunity for earnings season.

Meanwhile, let’s actually continue with the big picture bullish theme. The linear monthly chart of HUI was shown in the article linked above. But I never get tired of looking at the log either, which continues to sport and intact trend line from 2000, with the implication of a bottom having been formed.

We updated gold and silver (futures) daily charts (along with HUI/Gold and GDX) in this update on Friday. Here let’s again review their monthly log scale charts.

Gold… hmmm, not bad. Or in the words of Steven King “nope, nothin’ wrong here.”

Silver shows an intact trend line of its own (indeed, two of them) and the fork, which I’d drawn in as a novelty for fun, actually begging to be taken a little more seriously. “Nope, nothin’ wrong here.”

On to a few miners, reverting back to daily charts for a closer view than last week’s weeklies.

AEM continues on its way toward the resistance area. Note a couple of gaps coinciding with the ones shown on GDX above. I have not marked them up, but the one at 55.36 is filled and the one just above resistance is not. Holding AEM.

AGI is a beast that wants to take out the 2020 high.

The monthly chart is worth showing again for its beauty as a leader to the sector. A bull market in AGI began in 2016 and it is well afoot now and trying to lead HUI/GDM/sector.

BTG is a quality miner with a relatively good balance sheet that I sat on my hands too long about and now am left waiting for a pullback in order to buy. It will stay on watch as such.

Profit was taken on GOLD, as it was in the ultra conservative account and well, profit is good. Especially when they are booked. It’s at resistance and on casual watch to see if it can slip below 18.

Profit was also taken on KGC (and NEM, which closed out my holdings of large ‘headline’ miners, aside from AEM) as it looks upward at resistance. It’s on watch and a preferred buy would be the low 4s.

MAI.V (MAIFF) is good because its chart sucks, is trending down and has not given me the slightest urge to take profits. One day, if it breaks the SMA 200, it could get going. Holding.

NGD tempted me on Friday as it nested on the SMA 200. I bought SILV (below) instead because I just don’t love the company’s internals yet, at least based on my less than sophisticated review of them. But it has held its intermediate uptrend and is on very casual watch.

ORLA got shall we say “adjusted” on its 2023 guidance, but I did not see much wrong with it other than AISC rising, but still good at $750-$850 per ounce of gold. But again, <insert here> Gary is not a stock analyst. He is a macro market manager/analyst. Regardless, the unbroken chart kept me in position.

OGN.V (OGNRF) is an off the beaten path royalty play that has taken patience, but that volume seems to think it may get a little less off the beaten path in 2023. Holding.

SBB.TO (SGSVF) is held as its chart held the initial technical reason for buying. In other words it held the SMA 50 and lateral support at 1.25.

WPM is the big daddy royalty to the baby OGN and to boot, it has taken interest in SBB’s Back River Goose mine. Support is around 40 to 42 and it’s bull trending and not yet strenuously overbought. Holding.

The Silver Miners ETF is up against resistance, but still pondering whether or not it’s going to fill the upside gap. Will that Golden Cross of the SMA 50 above the SMA 200 instigate a pullback (not just occurring in SIL, but in many gold and silver stocks)? Sounds like a plan. Maybe they’ll start touting these crosses right into an emotionally charged FOMC week.

Yet HL just scoffs and says ‘gimme more!’ after eating the gap we originally projected. There is a little one right at 7, which I have not marked up. I took the profit here a while back and am not considering it for buyback unless the sector takes a healthy pullback.

I took a loss on MAG on the first day it cracked the SMA 50. Then it dropped more and tried to tempt me back. I selected SILV instead, but MAG is very much on watch as a silver player in ’23.

SILV sports for your eye test a would-be Inverted H&S pattern. I added it back on Friday at the moving average convergence. To activate the H&S it would need to take out 7 and leave it behind. The pattern would target (measure to) the 9 area if it activates.


Here I will do the bullet point thing again for some commodities while including a chart for the CRB index and charts of some stocks and ETFs of interest. CRB is trying to turn its long consolidation into a bullish one. In other words, it’s trying to join the global relief party (against negative signals like fading inflation and the aforementioned hard dropping Baltic Dry index of shipping costs).

CRB is not doing anything it has not done several times before, which is to try to take back the SMA 50. If it can do this and take out the SMA 50 it can still get a good rally on. I have no real interest in commodities in general, given the macro backdrop that I think is developing. I do have interest in some of the special situations for the near or intermediate-term.

Special situations like Uranium, which is trying to paint itself technically bullish. URNM took the downtrending SMA 200 and it did it on relative volume. As you know, when the machines pump the U sector, boy do they pump. It is at least postured to break trend, even if only temporarily.

NXE is probably my main individual target, aside from the ETF. Nice hold of the converged moving averages last week with green RSI and MACD. Also on watch are UUUU and CCJ.

  • Oil and Gas are both trending down, with oil in a potential short-term bounce pattern and Gas utterly bombed out. In consideration of this I hold AR, which is not good technically, and NOG, which is fine (if you ignore its gaps. As noted in the Trade Log, Gas bottoms seasonally (on average) in February. Something to keep an eye on.

  • Palladium still sucks but Platinum looks like a buy (if you want to be a Pt bull). It tested the SMA 50 last week on a sharp pullback and the test is successful so far.
  • The Agricultural sector (GKX) is still quite lame, rolling with a downward bias along its SMA 50. I hold Soybean fund SOYB simply for its intact chart and positive seasonal into July. It took a hit to the SMA 50 on Friday and if that does not hold I’ll probably get rid of it.
  • Copper/Industrial Metals (GYX): Bullish!!!! I am still not interested, as my belief is that this is a suck in due to the China story and I don’t think the China story is real and I do think that inflation trades are going to fail further than they did in 2022. I could easily be wrong about that, but there are other commodity related fish in the sea that I find more interesting than Copper.
  • Rare Earth materials are still trending down, although on a bounce. REMX is testing its downtrending SMA 200. My two watch items are MP and secondarily, U/REE stock UUUU.
  • Lithium stocks have put on a hard rally after taking a hard smash down. I took profits on both LTHM and ALB and am not looking back at this time.


USD held below the support (not shown on this daily chart) we noted at the 2020 high in an update. In closing the week that way we can say that support failed, at least temporarily, and the next support is our originally targeted 99.50 area shown on the daily chart.

The would-be supportive companion to USD, the Gold/Silver ratio (GSR) has been rising within its downtrend, but so far has not been any benefit to Uncle Buck. As things stand now, the signaling is still supportive of the global market rally. But these two bear watching closely.

The daily global currency chart remains much as it has been, with everybody at least constructive and at best on intermediate-term rallies vs. USD.

BTC/USD (weekly chart) is still bouncing as part of the global relief rally. If you took it for a trade be aware of resistance starting in the 3000 area.

Market Sentiment

Dumb money indicators started to hook down as SPX dumped on Wednesday and Thursday while smart ones continue to be faded. Risk is elevated in stocks, short and medium-term according to Sentimentrader.

Newsletters got perky before the market got whacked.

AAII (individual investors) got perky into the whack job as well. Both are still far from euphoric, but they did get a little peppy and were served a pullback.

NAAIM (investment managers) got excited as of the 18th, then the market go slammed. Also logical.

Bottom line on sentiment is that it has long since lost its contrary bullish appeal and is now biased toward being a contrary bearish indicator as many sectors rally while SPX lags and big Tech lags even more.


‘Savings’ account is all cash and equivalents paying interest, and is balanced by gold.

Trading account has no positions, as I am apparently not much of a trader.

Roth IRA (non-taxable, no contributions)

Cash level is at 84% after some profit taking (on balance) last week. While my view of gold stocks is bullish for 2023 (and potentially beyond), I’ll remain aware that when the broad market takes a real hit, they can get dunked too. They are not yet special because they are running ahead of but in line with broad cyclical markets (and running behind cyclical copper miners). I’d prefer to use hedging rather than selling out when things start to look dangerous. I may sell an item or two along the lines of SBB.TO (SGSVF) or SILV because you’ve got to take profit from somewhere (or losses from somewhere). But generally, I want to stay at least moderately positioned and hedging – unsatisfying as it often is – can help with that.

As for the rest of the stuff, anything can be for sale in a risky market. I like NOG as an energy stock, but will let the sector (still trending up) decide. I like Biotech and hold DVAX and a speculation in CDTX, which crashed terribly on Friday. I bought a small position in that falling knife and got cut by nearly 8% for it by the close.

The port also holds 3 Semi Equipment stocks as long as they look reasonable to continue bouncing off constructive patterns.

Finally, another speculation, VXTRF (VXTR.V) is doing well as volume comes in to lift it off of a potential bottoming situation. This is an interesting and real company and in my opinion could benefit from a decline in US/global bond yields as its products are mortgage/real estate management software applications. But a speculation it is, nonetheless.

nftrh disclaimer


This Post Has 7 Comments

  1. PaulP

    Gary, Hi,
    I like the pdf version of NFTRH because i like to print it out & read it as a ‘hard’ paper copy rather than as a ‘soft’ copy on the screen.
    The online versions of NFTRH when printed out have some charts straddling 2 pages i.e. half of the chart is on one page & the other half is on the next page down.
    Is there any way for you to format the online versions to make online printing easier by including a “PRINT THIS POST” feature at the bottom of the report.
    Steve Saville’s Blog over at ‘The Speculative Investor’ does just that.
    See here;

    Alternatively if there’s some setting here at my end that will accomplish this. Maybe its me that is missing something here.
    Let me know what you think
    Thanks Gary,

    1. Gary

      Okay, well I added buttons at the top to print a PDF or a hard copy. Check it out and see if it works well enough.

    2. Gary

      Disregard the PDF option. But the printer icon at top should provide a printable copy. Please let me know how it works.

    3. Gary

      Better solution found. At the top of the post there is a printer icon next to the share buttons. Just press that, print and let me know how it works.

    4. Gary

      Also, through the print function you can save to PDF. Glad you prompted me on this. Now folks can print or create PDF docs easily and it allows me the freedom to create reports as posts more often.

  2. Gary

    Hi Paul, I’ll look into WordPress and see what I can find.

  3. PaulP

    Hi Gary,
    Wanted to send you an image but couldn’t do it here in the ‘comments’ section . . . . . sent you an email instead

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