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NFTRH 853 turns out not to be abbreviated. I am feeling better each day, although I do need to get out and about more and continue back to full strength. At the same time, Trump2 has brought a particular type of mayhem filled with daily noise that does not work well with the following:

The Executive Summary that normally leads off NFTRH reports. It’s too mechanical and subject to whipsaw. I am going to shelve it for now. By the time the ink dries on this robotic summary, something radical has changed. We need to be mentally nimble, not robotic.

The Trade Log, which may make me look like some kind of casino gambler or day trader, also due to Trump2. I don’t like looking foolish, but the market wants me and many others to look foolish on a daily basis. If I add trading noise to the noise you experience daily, it’s not a good mix. We are all being cast about in this environment.

I have to think about how I’ll handle the TL as I get back to full strength, but I want absolute freedom to be a hyper-active trader without the embarrassment of showing such a mess to readers every day. This dynamic also keeps me from making speculations (taking gambles) I might otherwise wish to take. So I am leaning toward being as descriptive as possible in the portfolio segment and in updates, while maybe generalizing with notes in the Trade Log (and renaming it Daily Notes or something along those lines).

I am very serious about this and you may know I’ve had this bee in my bonnet for a while now. I was never overly comfortable with it (NFTRH is not a trading service), and now am even less so. Without the freedom to screw up and make big wins as I see fit, I feel handcuffed. Some personal moves will be made on intuition, and I don’t want others digesting my “intuition” and taking it seriously.

Again, I will be descriptive about what is going on out there. But I want to tighten up my own personal daily management, and broadcasting that to a readership is compromising my ability to tighten up.

Thank you for your understanding.

US Economy

The February Payrolls report continued what has been a slow deceleration in the US economic situation from an employment perspective, as we’ve been tracking for months. That is the bland headline. Under the hood, there is a man with a hammer, a blow torch and a chainsaw, trying to perform a delicate tune up on the fly. That is not so bland. It is very dynamic.

But the tools he is using are pretty blunt. The bottom line is that neither I, nor probably you, can see clearly the path toward resolution. If we assume that cutting waste will be a positive thing and that eventually with all of the stops, starts, revisions and backtracks on tariffs, regulations and government job cuts, the end result will be a healthier economy and financial system with the massive bag of 36T in debt greatly reduced (still very much only an assumption), the path to get there is likely to be painful.

Market Management

This calls us to attention each and every week if we want to be effective market managers. I don’t mean micro-managers, jerking to and fro with every erratic thing coming out of the White House’s orifice. I mean managers of the process with the tools that we have, which are things like investor sentiment, market internals (including rotations) and especially, technical analysis. Simple TA (in my case), not overly complex stuff that only adds another layer of confusion to the mix.

Trends, baby. That is the #1 tool for a time like now. Professional bears and day traders have probably been shorting and covering the mayhem of the last few weeks. Personally, that is not me and I will stick to my boring method of retreating to cash and equivalents when things look dicey.

One day, when the markets lose important technical support levels and start to turn their trends down I will look for short setups. For example, let’s say SPY loses a clear support level (defined by lateral support, a lower low and perhaps a key moving average and/or logical Fib retrace level), an ensuing bounce may be a short setup at newly formed resistance, with a “stop loss” somewhere above that resistance. But that is not yet in play. So no bear hero here.

US Stock Market

This week I’d like to retreat back to video format because of the time limits I have on my post-op stamina (got to spend time walking and integrating back into normal life). So let’s just let ‘er rip with a few daily charts and no up front prep. I’ll just wing it.

US Stock Market Sentiment

Smart money is eating the stock market while Dumb money regurgitates it. This is a positive sign on a contrarian basis. The reading can stretch further but is already at a point that could coincide with a market bounce.

As a side note, taking all of the info we think we know about gold out of the equation, its risk rating is high as the gold price has benefited through the angst of recent times. Notice how the two highest risk ratings are in gold and Treasury bonds. That is no coincidence, as they are both safe havens. Gold, however, acts as much more than just a haven. But insofar as players may be hiding in gold, it’s vulnerable from a sentiment standpoint.

The CNN Fear/Greed index has ticked to an extreme reading. Since this is our first time using this indicator, here is its description from CNN:

Recent market events have driven NAAIM (investment managers) from 91% bullish to 75% bullish. This was as of March 5th, before the market dropped lower. They surely declined in sentiment to end the week as well. NAAIM, a pretty good contrary indicator, is not standing in the way should the market want to bounce.

Finally, AAII (individual investors) took a severe drop in sentiment over the last two weeks. Ma & Pa are not pleased with the mayhem going on in the economy and its implication on markets. Ma & Pa watch the news, after all. The Feb 26 reading was a 1 year high in bearish sentiment. AAII are begging for a market bounce from a contrarian standpoint.

As a side note, Ma & Pa watch CNN, among other mainstream news channels. With day time TV among my recovery programs (I don’t normally watch TV before 7:00PM) it was not lost on me that CNN was really pounding the bearish stock market theme to the public last week. Obviously, this is an anti-Trump info tool. I am no Trumper, as you know. But I am anti-bullshit.

The agenda was to scare viewers regarding the Trump hatchet job and all the while I’m like “ah, but the market’s trends are up and sentiment is degrading.”

That usually spells “bounce”, at least. We shall see.

Global Stock Markets

“America great again”? Not yet. Not by a long shot.

The theme has been relative rotation globally, amid USD weakness. Global (ex-US) has been on that theme. Note that 55 is now clear support on an ETF (ACWX) that held a higher low to the would-be “bear market” decision point and rammed upward. Why again folks do we make such a big deal about higher/lower lows and highs rather than trend lines? TAs scaring or titillating others with trend lines are often naively misguiding them.

Once again, our global chart of interest. This is a trend change in progress in large Chinese stocks relative to large US stocks. It’s a global thing, folks. It’s also a wonderful contrarian thing, given that Trump is making America great again, supposedly at least, in part at China’s expense.

Other global areas in relation to the US:

• Europe/US: rallying for all of 2025. Trend not conclusively changed yet.
• UK/US: rallying for all of 2025. Trend not conclusively changed yet.
• Canada/US: potentially breaking upward from a sideways structure from last summer.
• Aussie/US: still trending down, but possibly bottoming.
• Japan/US: trending down.
• India/US: trending down.
• Emerging Markets/US: rallying for most of 2025, testing major downtrend (SMA 200).
• LatAm 40/US: rallying for all of 2025.

Bottom Line

The anti-USD plan is working well. Markets that were relatively impaired by a strong USD are now relative strong by a weak USD. Pretty simple.

Bitcoin/Crypto & Market Risk

Before proceeding to the precious metals, a note on Bitcoin. This supposed competitor to gold (and USD) nearly reached the upside technical target (again, close enough, as with gold to 3000+, SPX to 6200, and other markets). That’s the technical of it.

The fundamental of it is that this item I have called little more than a speculation is acting much like the world full of other speculations in this weak USD, risk-off environment. This only firms my view, as the proof is in the recent price activity. Bitcoin promoters will surely not admit it. But there it is. Thus far, under market stress, Bitcoin is acting like the speculation I believe it is.

Meanwhile, the Gold/BTC ratio has still done nothing other than to rally in 2025. As with Junk bond spreads (for one example), the situation is still pro-speculation, pro-cyclical, pro-happy stuff on the macro despite the recent uproar over tariffs and the DOGE doggie eating away at government.

It is economic deceleration that is going force bubble heads to the sidelines, not alarming headlines. As our less sensitive macro indicators flashed warnings through much of 2024, our more sensitive indicators like High Yield Spreads remained asleep.

The HY spread has bounced a bit and I have marked up a level at 3, which has been a clear support/resistance point of sorts. We would ratchet up the risk view if the spread takes out 3, considering other items like steepening yield curves and the 2yr yield’s negative divergence to Fed policy that are and have been future risk-off indications.

Precious Metals

With the ongoing caveat that gold is getting massive amounts of attention, it is and has been bullish. It has for all intents and purposes put in our target of 3000+, reaching 2956 on February 26. Does not mean it’s topped, and it probably has not. But there is sentiment danger in gold. Of that there is little doubt.

I again refrain from micromanaging the gold price. Dog gone it, I have an acquaintance (remaining nameless) who sends out a gold price forecast and he’s getting jerked all over the place (top is in, top not in, top is in, etc.). Which means so are his readers. The target is 3000+, it is nearly in or was put in with a 2% shortfall. A target is not a stop sign, it’s an objective.

Gold is not about price. It is about value, and those who do not have some of it tucked away right now are probably wishing they did, as insurance. Meanwhile, this insurance is not so overdone on the big picture compared to the US stock market, now is it?

Moving on, GDX held support just above the 50 day moving average and is flying in the face of bearish US stock markets. If it can take out the previous high (42.66) and the previous one to that (43.71) it’ll be on its way to our…

…equivalent of HUI’s next target at 375+. We are looking for Huey to put in a higher high to the 2020 high and this monthly chart continues to argue for that with good looking RSI and MACD and a corrective channel breakout.

Gold stocks held are shown in the Portfolios segment. Other than AE.V (AMEGF), I do not have much in the speculative area (e.g. TSX-V denizens), but I’ve had a complicated 1.5 weeks, don’t you know. I have stripped back to the stuff I have a more solid view of and confidence in. The spec stuff tends to really get going at the end of rallies or bull markets, signaling their impending conclusion. So maybe some of it will be added later.

Many gold bugs cheer for gold and cheer for silver even harder. That is because in my opinionated opinion, most gold bugs are speculators, not the purist monetary intellects some might view themselves as. The Silver/Gold ratio has not gotten going. But if the premise of our recent theme (the 2001-2004 analog) is a good one, we do not need silver to lead. Reference Friday’s public article on the subject, which lays out many of the details, including weakness in silver vs. gold (via a rising Gold/Silver ratio).

2001: A Historical Odyssey For Gold Stocks

I think some commodities can do okay if silver fails to lead gold, if the US dollar declines (as per the analog) and per political and supply/demand inputs. But a more comprehensive “inflation trade” would need silver taking over, which per the analog, if finally did in 2003. In short, gold stock traders do not necessarily need silver to lead, although it would be bullish in a different way if silver were to bottom vs. gold and take up leadership. As yet, it’s not happening (per the daily chart above).

USD & Gold/Silver Ratio & More on Gold Stocks

Here is a simpler version of the analog. As you can see, USD has only taken a sharp and quick correction (ref. Thursday’s NFTRH+ update illustrating a would-be bottom/bounce point. It is still at around that point (62% Fib retrace). Maybe bounce, may not. But one thing is clear; this cannot be called anything other than a correction within a bull market at this point. For the analog to work flawlessly, USD would have to continue to decline into a cyclical bear.

Meanwhile, the Gold/Silver ratio should not necessarily be feared by gold stock bugs. That is because the things that would drive gold up vs. silver are the same things that would drive up gold mining fundamentals. Those are things like market liquidity constraint, risk aversion and gold outperforming the risk-on trades, whether or not its price does much nominally.

Newer readers may never have seen my Macrocosm metaphor. I created it many years ago to dispel the bullshit in the Bug-o-sphere that gold mining benefits from inflation and that gold is a uniquely good asset for inflation (it often is not). The larger the planet (generally)*, the more important the fundamental consideration for gold mining.

* Ideally, some planets would be larger and some smaller. But the generally this is the macro-fundamental view.

Today we are on track for economic deceleration. While the stock market has not yet entered a real bear, a risk-off macro appears to be out ahead and gold is out-performing most other cyclical markets. Yield Curves are steepening. Gold is out-performing commodities. Gold is rising in all currencies.

Hence, why we track charts like this. Gold is THIS close to taking out a base vs. the S&P 500. But SPX appears ready for a contrary bounce, so let’s have some patience. All of the other items are trending up, which means gold mining fundamentals are trending up. The gold mining industry should eventually leverage these fundamentals and one day capture a wider investor sponsorship.

Commodities

• As proof of our assertion that gold is not silver is not copper is not oil is not hogs (this is my poke at those touting “protect yourself, buy commodity and resource stocks!”), the commodity indexes have been dropping amid Trump2 and its sledgehammer. This despite a hard dropping USD. We were prepared for that due to the still firm Gold/Silver ratio and a discipline not to be part of the commodity/resources herd.
• Some select politically charged commodity/resource producers (US Rare Earth producer MP Materials comes to mind) are doing okay and others are still trending bearish or getting hammered.
• We will not swallow dogma. We will make sense whenever possible, and when not making sense, start making sense ASAP upon realizing our wrong-headedness. Especially in an environment like, let’s not take someone else’s word for it (that includes you, taking mine).
• I got long a couple copper stocks, but they are trending down and are not firmly held.
• I also got long a couple uranium items because how low can they get clobbered? Maybe lower. It was not a technical buy.

The ideal commodity backdrop continues to be a weak Gold/Silver ratio and a weak US dollar. Today we only have the second thing.

Portfolio

Gold is long-term risk management & monetary value/stability in a balanced portfolio.

Taxable Account

In order of position size. Cash and short-term Treasury equivalents are by far the dominant positions. Extremely so. Insofar as positioning goes, I prefer gold mining/royalty but also am gingerly prepping for a potential stock market bounce. Also, Healthcare/Medical Devices may be a semi-special interest. A couple are held, and more may be considered.

Trading Account

No positions.

Roth IRA (non-taxable, no contributions)

The chart… sucks (if it is making a double top). However, if it is a Symmetrical Triangle, it would be a bullish continuation. I’ll just continue to manage day to day in the Trump2 market with an eye toward preserving capital over speculation. But I am also ready to speculate (long and short), if that makes sense. First we need to clear the noise and see how the markets shake out (US currently getting hammered, global doing relatively well).

Cash and equivalents are at 85%. Ready to decrease cash a bit if I sense a sentiment bounce playing out in the market. But for now, it remains defense over offense. Gold stocks are held and increased a bit, but will be hedged if/as needed on any widespread market troubles. That is because I resist any heavy profit-taking * on key items due to longer-term bullish view. Ideally, rallies would continue to see light profit-taking and pullbacks would continue to see position increases.

* I may plan to use GDX/GDXJ/DUST/JDST as a way to more aggressively trade the sector for fun (trading account). But I am generally not that guy in any serious way.

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 on X @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.