Blog

Summary

US Stock Market (per last week): Further pullback potential was not realized last week. Instead SPX & NDX bounced to test the earlier highs, while SOX lagged. SOX > NDX > SPX leadership chain still intact. So is the potential for a major double top. NEW: No change other than SPX has joined the all-time highs breakout brigade and the question remains, double top or spectacular upside blow off?

US Market Sentiment (per last week): Gross over-bullishness continues to be bled out with a curious pullback in BOTH smart and dumb money indicators. II, NAAIM and AAII are all over-bullish but twitching nervously. Usually, a real market top does NOT occur with dumb money pulling back. NEW: Situation little changed. A top did not occur with dumb money pulling back. Nope, not at all.

Market Indicators: As has been the case since the banking scare in Q1, 2023 the situation is generally ‘macro intact and high risk’ with cyclical indicators sleeping soundly and potentially damaging ones like the Yield Curve, Gold/Silver ratio and the 2yr yield/T-bill relationship indicating forward trouble. Patience on that.

Inflation/Deflation: Disinflation continues, but recently some firm economic numbers and policy jawboning have indicated a little kick upward in inflation concerns. Big picture, the favored view has been deflationary prior to a potential big time inflationary phase in the next couple of years. But as per recent analysis, I am open to an inflationary outcome sooner as well.

Global Stock Markets: Still bullish on balance, but lagging the US now, presumably under pressure of the bouncing USD. China is notably weak.

Precious Metals (per last week): The pained rally theme is still intact, holding its daily chart parameters last week before a good pop on Friday. Silver is the most suspect and needs to hold and get above its daily moving average resistance. Bigger picture, if the rally continues as planned we continue to look at a likely ‘sell’ at the top side of the HUI downtrend channel (280 to 300 area). Meanwhile, there are viable measured targets of 2400 gold and 35 silver if these items clear resistance. NEW: It’s more pained now. Tuesday’s downside completely reversed whatever drove the sector and other markets perceived as inflation markets (wrongly in the case of gold mining) up on the Friday before. The bottom/rally theme is alive but never should have been taken overly seriously due to macro fundamentals that are not yet positive. As GDX/HUI become oversold and the former likely fills its 2nd gap, we can consider whether the rising Gold/Oil ratio during Q4, 2023 will show up positively in earnings results. Decent results combined with an oversold sector could do the trick. But the sector is not special and has not been special since Q1, 2020 and Q4, 2008 in microcosm, and since 2001-2004 in an extended macro phase.

Commodities: As yet the bump in inflation/economic signals (yields, TIPs ratios, firm employment & consumers) has resulted in the opposite for the inflation trades. Still, as the bubble moves forward we can watch for rotation to cyclical/value/inflation sensitive stuff. But with the primary view still including deflation before major inflation, it’s buyer beware and also buyer be nimble.

Currencies (per last week): USD is the anti-market to most asset markets. It is stuck at resistance. But with the constructive Gold/Silver ratio at its side it is recommended to have a level of caution until such time as these two may reverse. NEW: And to boot we’ve got the FOMC meeting in 1.5 weeks. Oh how fun. If you love noise.

NFTRH 793 goes a little more free form and conversational this week, rather than adhering to the usual segments…

Bubble Up

The latest pullback in market sentiment was as speculated; a twitch, a jerk toward bearish to refuel the bull. It’s how a speculative blow off is often built. If this is what I think it is, the final act could be a near-vertical shot upward, flame out and reversal. But first things first; BULL.

Key points to consider if this is a final stage rally:

• First dear gold bugs, the macro is not yet ready to favor the gold mining industry. There is no change to this view. Some noisy sources out there continue to proclaim the macro is right, but our favored view is that gold is the anti-bubble and thus, even though it is still trending bullish, the miners will not be fundamentally favored until after the stock mania – promoted by bubble policy for at least 24 years now – blows out.
• At best, gold miners are an also ran to the broad rally as they are perceived as part of the anti-USD inflation trades, along with commodities and commodity/resource markets. Makes sense since most gold bugs are inflation bugs.
• At the moment the markets continue to quake before the great and powerful Fed of Oz, reacting as they did in 2022, when yields rose in the fight against inflation. Confidence in these creators of inflation who are now perceived as inflation fighters is implied to be intact, otherwise the market would say “screw you, your financial magic won’t keep the inflation genie in its bottle!” and bid up finite resources and drop the US dollar.
• Yet there is the ultimate financial instrument, the US stock market (and other developed world markets) ramming higher despite the Fed’s slow removal* of the thing that birthed this phase of the bull to begin with in 2020. That would be an inflationary liquidity gusher.
• A little self reflection yields the realization that I am often right about coming events and just as often wrong about the forward duration of such events.
• For example, in Q1, 2020 we were bullish. We had to be because the Fed was literally printing a bull market in asset prices. But had I known the duration of the intense recovery in 2020 prior to the 2022 mini-bear I’d have just held positions for that 1.5 year run, with re-balancing in line with the market’s rotations, rather than keeping risk management (profit taking/loss limiting/cash) in play to the degree I did most of that time (risk management did finally come in handy as the 2022 bear phase engaged).
• As another example, no way did I think a year ago that the projected Q4 (2022) to Q1 (2023) rally would extend into 2024. Yet here we are, Q1, 2024 with bullish blow off dynamics developing.
• NFTRH is not a service to maximize your performance during a bubble. But by the same token it IS the service that will highlight the risks involved in dealing with a bubble even as its writer does not fight said bubble and even participates (with ongoing risk management). There is the obvious risk, that sentiment will blow off and out along with stock prices per the opening paragraph above.
• Another risk is in shorting the markets. It has not been an advisable way to go unless your fundamental view is firm about an oncoming bear market and you are willing to sit through some potentially impulsive upside (ref. the Big Short guys in 2007-2008).
• Fortunately, as our friendly inflation fighters try to restrict liquidity the tool they are using is the allure of cash, which is more attractive at higher interest rates. It makes risk management a no-brainer today as opposed to the bad old days when Ben Bernanke put us all at risk and paid us ZERO if we wanted to avoid that risk.

* Those who track the Fed’s QE/QT activities might argue that they’ve periodically added and removed liquidity at varying times during the supposed tightening cycle. For example, as the Banking sector began to fail the Fed sprang into action in tandem with a government that never saw a fiscal inflation opportunity it did not want to promote.

SPX has finally joined its Amigos in blue sky territory.

And right on cue ladies and gentlemen…

The MSfM is on the job, complete with happy fist bumping traders for Ma, Pa and legions of casino patron FOMOs to digest. You can click the graphic if you too want to get hyped up about these matters.

Here is a clip from the article that economic soft landers are digesting with glee.

1. Yes, indeed. History shows that the market tends to climb along with a Fed rate hike regime. So what’s your point Mr. Perma-Bull?
2. Yes, that is the projection as the inflation problem eased as projected in 2023. FWIW, CME Group has eased its rate cut view for March, now slightly in favor of a rate hold with the cut coming in May with a 2024 rate cut regime to follow.
3. “Investors”, AKA millions of former Doug Glatts and Ross Rheas now Wayne Gretzkys suddenly seeing plays a step ahead of everyone else (Ross/Liev Schreiber): “All I’m sayin’ is don’t go tryin’ to be a hockey player. You’ll get your fuckin’ heart ripped out. You’re a fuckin’ goon.”). Problem being, these investors ARE everyone else. Always. This media crap is literally saying that in investing everyone’s a Great One! Well, see the chart below.
4. As you know, I have participated in the AI mini-mania, investment wise (ANET, MSFT, SMCI, CRWD, etc. to varying degrees). I participate in it functionally as well every time I put an article on SeekingAlpha and its ChatGPT does a bang up job of scanning the article and writing a bullet point summary for me. I am also a long-term advocate of the Semi sector as well, because Semiconductors are in everything from computers to phones to medical equipment, autos, appliances and war machines) and as such are less violently cyclical than they used to be. But please, dear MSfM, enough is enough. This is the stuff of media creating after the fact rationalizations and bias confirmation for an already bullish market that has just signaled to all that we’re in blue skies and happy days are here again!

And it was all according to our plan for a FOMO driven sentiment blow out. So that pic of the happy traders above and the associated article were necessary ingredients for a coming ‘jerk ’em all in’ top. A lot of money can be made on the way up (e.g. silver in spring, 2011) but risk management (even if just a daily awareness of what this is) is called for ever more, the higher the situation goes. The segment could have been titled ‘Buckle Up’ just as easily as ‘Bubble Up’.

Once again let’s retreat to the historical chart that accounts for the more intense inflationary bubble years going back to 1999. There is no law that says history must repeat, but one fact is clear: the last two tops prior to real bear markets (2000 and 2007) featured the S&P 500 rising during the Fed rate hike regime, topping generally during the rate pause, and only declining after a Fed Rate proxy (orange T-bill yield) had begun to decline in earnest.

• If the market holds to this blueprint we could see an intact bull grind around into the spring and roll over amid rate cuts in the spring or summer. Or…
• The market could pull a new rabbit out of its hat and accelerate for a ‘silver 2011’ style blow off sooner, as the “ATH!” headlines sink in to a FOMO’ing public.
• Either way, risk awareness, at least, is highly recommended.

Do you think that just maybe there were happy headlines in 2000 and 2007 like today’s happy headlines? I would bet there were. Regardless, the chart shows a double top in SPX here and now. This could be the point where ‘it don’t get any better ‘n this’ now that SPX has joined the ATH party and CNBC is pumping the headlines. But we should also allow for hysteria to get in the mix. Hysteria can drive a market to who knows where… (e.g. Nasdaq 1999, Crude Oil 2008, Silver 2011). That is the risk for bears.

The risk for bulls could be less dynamic and more drawn out before it is realized. The market could take today’s contrarian signals (what’s Jim Cramer up to lately? Is Gartman still around?) and flop on Monday. But more likely the play is going to drag on. This is the reason I adjusted the view several months ago from Q1, 2024 out to H1, 2024. But again, I tend to underestimate the power of bullish momentum. So… caveat.

Here is SMCI, Friday’s AI/Semi star. While I sit here with the remorse of selling it into the big price spike on Friday, I also realize that I took a previous profit, bought the pullback and then held for the big price move. I think it’s going higher, but the stock is already at the pattern’s measured target and given the view that I don’t think this market is long-term investment worthy, sound risk management dictated that I take an outstanding profit with no tax implications (Roth IRA).

But the way I will play the mania is to always have guys in the bullpen (watch list), warmed up and ready to go. For example, I added back TENB, which I view as a sort of junior CRWD. Both are growing Cloud Security plays with a habit of exceeding expectations at earnings time. TENB’s valuation is much better than CRWD, but its growth is not at CRWD’s pace either. Its chart is lurking at resistance and is a potential ‘catch up’ play.

I also added Semi plays INTC (a relative value) and ACLS, a firmly growing and profitable Semi Equipment stock that has lagged since the summer. So in essence I ran away from the hype that will probably carry SMCI higher and replanted into some lagging situations and an out and out bottom feed in AEHR, which has filled a gap that I’d had my eye on. But stock price recovery would be dependent on some better news coming out of the EV market or at least stabilization of that market, as AEHR is heavy into ON Semiconductor, which is heavy into the EV industry.

The above is just an illustration of how I am going to play this market from here on. Healthcare tends to out-perform when risk starts to go off. As you can see, there is no risk ‘off’ signal yet. So the game continues. But as part of risk management we will keep tabs on this and other indicators.

Right now, the indication is that Semi > Tech > Broad (SOX > NDX > SPX) is not only intact, but fully back in leadership mode as NDX ticks a new high related to SPX and SOX ticks new highs vs. both of them. It is bullish. Period.

Fighting such bullishness is not recommended until we get more signals than just the re-fading of breadth internals implied by the Equal weight SPX vs. headline SPX. The headline stuff is the stuff of those happy traders pictured above that the media wants to serve up, after all.

What’s more, the main US index (SPX/SPY) is breaking higher vs. the global (ex-US) ETF with the implication that here on the deck of the USS Good Ship Lollipop is the place to be, at least relatively (Japan, India and a few others might have something to say about that argument, although even they are under-performing the Good Ship lately).

The SPX/Gold ratio continues to hold serve indicating that regardless of the bull market’s origins by its policy-making benefactors, the wider macro picture is that it is ‘real’ because the anti-bubble has not yet wrestled leadership away from mighty US stocks. The 2020 head fake was just that, a blip.

Speaking of head fakes, just a couple of weeks ago I was faked into thinking that ‘Value’ stocks had been rotated in, relative to growth stocks. Err, wrong sir. Lately, the Growth/Value ratio has spiked back to trend. Machines gone wild, I guess.

Meanwhile, the little piggies are sleeping soundly as the Libor/T-bill ratio is calm as cucumber.

High Yield spreads… sleep little bulls, sleep.

VIX: “Sleep little bulls, sleep.”

The 10-2yr Yield Curve, however, says “Just don’t get too comfy” because the inversion appears over and economic recessions (shaded) tend to come well before a curve steepener matures.

Bottom Line to the above

The US market is bullish, as are global markets on balance with a few bearish exceptions (e.g. China). But the US is leading and is itself led by its preferred components for leadership, Semi and Tech. What’s more, SPX has just ticked the awaited blue sky breakout, joining SOX, NDX and DJIA. The cherry on top? Why, just look at the happy, fist bumping traders the media is feeding us.

A contrarian setup in in progress. But right now, in its potential to accelerate into mania, it is dangerous to actively short it in support of a future bear market view. Cash is paying out a handsome rate of interest, after all. Personally, I am enjoying it because after a grind coming out of the gate, 2024 is shaping up to the original plan of a potential blow off and blow out. You can short and get lucky, or you can short and get incinerated. I’ll continue to nimbly poke short here and there, but with no commitment until the pig either rolls over or spikes upward and blows out.

While I was head faked a bit into thinking that the market may have been rotating toward ‘value’ and defensive sectors, the thing has sprung like a steel trap back to previous leadership and to boot, the big breadth thrusts we read about in Q4, 2023 are now fading as the market thins out and the machines chase down the sexy stuff (with the media fanning the FOMO) like now, apparently, my dear departed SMCI.

I plan to enjoy the process by trading it, but to also enjoy managing it. The report so far includes pictures that show two things:

1. A purely bullish US stock market situation with leadership intact, media touting what has already been factored, and breadth thinning. It also shows a sort of ‘nope, nothin’ wrong here’ complacency. Bullish, baby.
2. Perfect ingredients for a 2024 top as per the original plans.

US Stock Market Sentiment

It is still difficult to interpret the exact meaning of the retreat by both smart and dumb money indicators. Usually smart money would be eating the market with dumb pulling back to this degree. However, risk on the short-term is shown to have increased by Sentimentrader’s measures.

• Investors Intelligence (Newsletters): Retreated to a still moderately over bullish Bull/Bear ratio of 2.54 on January 16. This was before the recovery that began on Thursday and had all major indexes at all-time highs by week’s end. If we could see the reading now, it would likely be ramping again.
• AAII (Ma & Pa): Similarly in a bit of a retreat but also still over-bullish as of January 18 with a Bull/Bear reading of 1.51.
• NAAIM (Investment Managers): 53.5% bullish as of January 17. NAAIM shows the value of correctly interpreting a sentiment “micro-twitch” as I call it. I have to believe that NAAIM includes a percentage of well meaning fiduciaries looking out for their clients’ best interests. Hence, the guarded stance against what I am sure the more astute among them (rightly, in my opinion) believe is an ending stage bull market. Now if things go to script we’ll await a sentiment jerk back up toward 100%.

Bottom Line on Sentiment

Complacent and over bullish. However, I have done this long enough to have seen plenty of phases where a manic bull market will jerk around to unload the weak hands (micro twitch) before springing higher. This merely increases the FOMO (fear of missing out) among the herd and firms its resolve to hang on next time (it’s blue skies after all; the media says so!).

Sentiment is very short-term risky (per Sentimentrader data, not necessarily to my eye), but generally reset from bull killer over bullish readings thanks to the sentiment twitch we began looking for a couple weeks ago. Generally, conditions are in place for a market top. But conditions do not time markets. Paradoxically, sentiment is currently aligned so that it is permissive of more bullish stock price activity should that be the play, and also permissive of a market top should that come sooner, not later. I know, it’s not very helpful info, functionally. But this is what it is. Hence, I report it.

Precious Metals

Frankly, I am tired of managing this garbage. How is that for some sentiment for you to chew on? Actually, there are positives if you want to see them. One positive is that the stock market is entering blow off dynamics as certain indicators show danger out ahead. So if gold stocks do not resume partying with the other stuff in the short-term we’ll be thinking like very greedy buyers at lower levels. We also may not have to worry about a GDX ‘sell’ at 40 (HUI at 300) that would be the case if the miners rally with the broads.

We don’t need the gold ratio charts this week because gold, the anti-bubble asset, is getting drubbed in relation to the bubble stuff. It is okay related to commodities, and silver for that matter. But the fundamentals are incomplete at best, as has been the case since 2020.

Now, let me ask you a question: wouldn’t it be great to see the fundamentals slam into place while the stock prices of favored gold stocks (e.g. AEM, OGN.V, AGI, RGLD, WPM, EQX, etc. in my case) and maybe a silver stock or two (e.g. HL, SILV, SVM) are weak or even dropping? An extreme of that situation was Q4, 2008 when I for one was getting my hands severed trying to catch all the falling knives that eventually bottomed, turned up hard and provided intense profits. Those, along with the already beaten to a pulp FNV are also on watch for a potential interim sector trade.

Q4, 2008 was deflationary. Tell me again why the best opportunities do not come amid an inflationary backdrop or for the reasons touted by inflation-centric gold bugs?

The time is not right and has not been right since Q1, 2020. That includes just a week ago when I was pretty well constructive on the sector’s ability to run with the broader bull to the GDX and HUI targets of 40 and 300. But there was also the little detail that those objectives, if reached before the end of the greater bubble, would be a ‘SELL’.

So the disheartening performance of the miners last week – in tow with the disheartening performance of most commodity related equities – was really not so disheartening if you were not buying the false narratives about bullish fundamentals. It just means that real opportunity is still out ahead and we will know what to do when it is time to do it. Again, in Q4, 2008 I knew what to do although I started doing it at HUI 250 before taking what was left of my hands and praying at HUI 150 as I expended my final capital.

But the fundamentals were right back then. I am going to be a stickler for the proper fundamentals this time around as well. A positive today that may mean the miners need not take any such tank job as they took in Q4, 2008 is that the sector has been in correction since mid-2020! In ’08 the sector topped amid poor (inflationary) fundamentals and utterly and righteously crashed (to a buy amid intense deflationary pressure).

Other notes:

• Gold and Silver Commitments of traders made a lurch to the contrary positive direction even before the metals prices jerked down into Wednesday. So there may have been further improvement, although still nowhere near a clear positive alignment. The theme is and has been that at best the CoT is not standing in the way of a rally.
• BPGDM (Miners bullish percent index) never did become overbought before recoiling. So it too is not standing in the way if the sector wants to fill its gaps and rally from an oversold condition.
• HUI/Gold ratio got croaked back to a test of the November low. It’s not positive, but it is an oversold reading that I actually do not mind from the perspective of a buy for a trade.
• Have I mentioned that the fundamentals are not yet right with the intact macro bubble still going? That is a factor that can keep us from getting lathered up with the other bugs if the sector does indeed resume rallying.

Precious Metals Bottom Line

GDX and HUI are getting oversold on the daily chart and the prospect of a rally is not dead. But there is another gap to fill on GDX and maybe this weakness is about getting rid of that gap, which would be a good thing. Ref. Wednesday’s NFTRH+ update for a detailed look at the GDX and HUI situations. On Friday we had a more broad market based video update that also included some gold stock analysis as GDX becomes oversold on the daily view and may even provide a buy opportunity for a trade.

The bottom-most line is that gold is the anti-bubble. It’s not doing anything other than taking the other more stable side of the markets and biding its time as a future anchor in asset storms to come, sooner or later. Currently we are managing the latter stages of the stock market bull. Gold and gold stocks have no place in this happy atmosphere. They will have a place after things fall apart. Just ask Chinua Achebe.

Commodities

Despite a tough week that saw the machines drop the markets, first in fear of a re-hawking Fed (a Fed president ate a mic tamping down expectations for coming rate drops), and then bull back into the Goldilocks stuff that has worked best during disinflationary 2023, I think there could yet be some life left in a bounce scenario for commodity and resource related stuff as well.

Of note, the Canadian junior index – filled as it is with speculative commodity/resource stuff – held its own during a tough week. This could be the result of systematic re-buying by refugees who puked the index’s components during tax loss selling season. But at face value, da ‘V’ is intact and the first and possibly primary target is the daily SMA 200 at 580. There is more resistance above that it could target, but let’s take one step at a time. TSX-V could hold support here, but it could also easily bang the SMA 50 if not the gap well below it, before resuming any rally activity. It could easily fill the gap at 526 where there is better support and still keep the intermediate uptrend in play. But the trend is down, and as with the balance of the commodity complex, would be viewed as a ‘bounce only’ within that downtrend.

With the US Goldilocks stuff back in leadership mode, I would not get too excited about the inflation trades at this time, whereas I was getting constructive just a couple weeks ago as cyclical ‘value’ was starting to out-perform ‘growth’. Moving on…

• CRB Index: Potential to carve out a low here, but no real technical backing for that other than a daily chart’s decent looking MACD and RSI and the price at a support area.
• Crude Oil/Energy: Oil is much like CRB, as it is CRB’s driver. Again, reference a previous NFTRH+ update noting positive seasonal, contrary sentiment and a chart at support (hence, I still hold USO). Gas got destroyed on Friday by 16.5% to a new 7 month low. The Energy sector (XLE) had a false break above the daily moving averages and failed. However, at a higher low to the spring lows it is still viable to rally should the macro swing in favor of ‘value’ and/or cyclical inflation stuff.
• Uranium: Frankly, now that I am positionless I am happy to see what looks like a downward bull flag in the making on the ETF (URNM) and another in leader, CCJ. Now please keep flagging so I can buy something back (usual watch list: URNM, CCJ, NXE, UUUU). Interestingly, the sector is flagging while the u3o8 holder (SRUUF) is still at its highs. Considering that the holder trades at a discount to the value of u3o8 held, it’s even more interesting. URNM is pulling back, but if it is a bull flag there could be some catch-up to come.
• Industrial Metals (GYX) and Copper: GYX is going sideways within a gentle downtrend and copper is going sideways within a sideways trend. You could even call it a cyclical bear market in the metals. However… pulling monthly charts on both GYX and Copper (see below) indicate buying opportunities. Here let’s consider that amid war and geopolitical brinkmanship nations are pressured to hold on to precious materials and resources.
• Yes, China is tanking and that is a drag on copper and industrial metals. But when markets rotate back to China/Asia, look out. The buying opportunity will be seen in a rear view mirror. Let’s try to keep our view trained on what’s ahead. The play is that governments, which never met a fiscal inflation they did not like, will ramp up the debt spending or at least try to. This, under decree of various national/global emergencies. All I am saying is let’s consider the possibilities as we also consider the bullish monthly charts below.
• The Ags as a whole are trending down, although there is some variability within the individual Ags. Tough sector for me, as evidenced by the positive analysis on Corn, which had long-term support, positive contrary sentiment and a positive seasonal… and the trade still failed. Related stocks NTR and MOS have been drubbed along with many other commodity/resource related equities. I keep them on watch.
• Uranium is the favored outlier. But Lithium and Nickel (battery materials) equities remain on watch (currently low priority) and REE has gotten killed as well (I hold MP, rather stubbornly this time). Palladium cranked out a new low for a deeper test of the long-term support zone. It is on watch as a bottom feed. Platinum is retesting its 2023 lows also at a long-term support area.

Here is the monthly chart of the index and its prime member, copper. A cyclical metals bull would be very interested in these big picture support levels. It does not mean the metals have to turn up soon, but despite the disinflation of the last year+, support has held and technically, this is a buying opportunity (with stops to suit below support) for the broader metals, assuming the macro fundamentals eventually kick in, which given the world at war, seems likely sooner or later. If the deflationary view plays out first, however, support could be lost prior to a longer-term buy.

Currencies

What else do we need to know? USD is the anti-market and said anti-market is paused at targeted resistance, deciding whether to take it out or not. Thus far, despite it’s best efforts last week, the answer is “not”. But in 1.5 weeks a certain group of market manipulating* eggheads will meet and there could be increasing noise.

* I am not wearing my tin foil hat. By definition the fixing of interest rates to suit a favored agenda (to liquefy or constrict markets) is manipulation toward certain goals.

Meanwhile, the Gold/Silver ratio (GSR) – a measure of liquidity stress and counter-cyclicality when it rises impulsively – has led USD to this point. But Uncle Buck appears more inclined to follow long-term yields, which have bounced as anticipated from oversold conditions. As for the GSR, it is currently aiding the disinflationary Goldilocks view, as the more inflation sensitive silver under-performs and a little squall of policy strength (hawkishness) is indicated by the bounce in yields. As I said, it’s noisy out there.

Portfolio

A perma note that funds are balanced by gold (long-term risk management, if you will).

Roth IRA (non-taxable, no contributions)

Cash is 81% and the favored areas continue to be Semi, Tech (where I can find relative value) and until the play breaks down, gold mining (due mainly to a forward bigger picture post-bubble macro view). As GDX eases to fill its nearest gaps I am going to consider adding positions. But I’d just as readily call the play over for now if GDX and HUI take out the November lows (26.58 and 207.53, respectively).

Meanwhile, I’ll remain aware that this market likes to rotate like crazy and I have an eye on cyclical/value stuff (e.g. CBT, a specialty materials co.) and the aforementioned Copper/Industrial Metals situation. Also in the cyclical/value category would be Energy (XLE). With the noise of the upcoming FOMC I am also content to sit around collecting income on cash and speculating once in a while for profit (e.g. SMCI).

Cash & income-paying Equivalents are at levels that are right for me and my real-world situation. Your situation is different. Cash will be adjusted as needed.

Refer to the Trade Log under the NFTRH Premium menu at nftrh.com for trade info, if interested (not that you necessarily should be). Also, you can follow at Twitter @NFTRHgt for notice of updates.

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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.  See full terms & conditions of service under the ‘About’ heading in the main menu.