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Making America America Again

After selling our house last year, we moved back to the immediate suburbs of Boston. Waltham, to be specific. Back to the city I grew up in, after a 41 year absence. A city where many people who are born here, die here. Townies, if you will. Traditional type people. This was not, and is not The Peoples’ Republic of Cambridge.

You can’t get any more Waltham than the corner of Moody and Main. The heart of the city. That is my neighborhood now. Waltham Common is right outside my office window. This section of Waltham is now extremely multi-cultural, with hard working families and people like us, on the back 9 and living comfortably while enjoying the bars, restaurants and frankly, the bustle of a city atmosphere after all those years (28 of ’em) in the sticks.

As I began writing this (Saturday) morning, I heard horns honking and saw people gathering on Waltham common. It was our city’s expression on a national pro-democracy day. My wife and I hopped out there and I took some pictures. It was heartening seeing real people (don’t believe the disinformation that some liberal conspiracy has bought and paid for demonstrations like this) doing a very American thing.

Editorial interlude: I did hear one offensive thing sounding through a bull horn: “No one is illegal!” Yes, some people are illegal. Especially undocumented non-citizens who are in this country for the purpose of importing and distributing Fentanyl and other lethal poisons (or trafficking people, or other evils). People who exist to exploit other people with the disease known as addiction. Reinforcing their imprisonment within their addictions and in many cases, enabling in their deaths. It is bad enough that some American citizens engage in this murder by proxy of a drug they peddle. It is worse when illegally domiciled people engage in its import from places on Trump’s hit list and distribute it in every city in America.

So that is my disclaimer. On the face of it, Trump’s agenda – if he is actually true to the items on his agenda – is not all bad. Do I like him? No. Do I think he’s a net positive? Absolutely not. Did America need fixing before Trump was ever a twinkle in MAGA’s eye? Oh yes. My public writing back to 2004 shows that, mostly from a financial/economic/monetary vantage point. But that filters down to the roots of an inequitable society. Officially manufactured inflation has created massive divides within the population.

But America is still America, regardless of how the world views us at this moment. America is the people, and it was reassuring to go out and be among the people in this protest. And to hear the horns honking in support. Horns honking by everyday people, by men in their work vehicles, even the driver of a huge gravel hauling truck owned by a conservative family of note here in Waltham. Honking in support of the protesters from liberals, conservatives and regular working people.

Trump: Just maybe, unintentionally Making America Unified Again. It will take time, but…

It’s the seeds of the average American starting to get beyond their polar differences and figure out that the country needs to come back together. On topic, financially it is a sign of a society that has darkened in social mood at the dawn of a bear market, but planting the seeds of its future recovery.

It is troubling to see that our Canadian friends (among many others, globally) have been put on such a hair trigger that a post I made critical of Trump’s handling of the trade war he started was summarily dismissed, as I was un-followed just at the sight of what was viewed as a re-post of Trump. The person did not even take a nanosecond to evaluate whether I was perhaps being critical of Trump. Sad, but not surprising I guess.

These are the knee-jerk reactions instigated by Trump and the chaos in his wake. People react. People cancel other people based on perceptions. It’s the way the world is going as it flies up its own asshole in the wake of the USA’s hard lurch to the right, and then, right off the charts.

Anyway, some pictures of what made me proud of America today (Saturday). You may think this was a bunch of liberals out there spewing the same old slogans. And in some cases it was. But the majority were not. It was regular people, families and a hell of a lot of honking horns of drivers going by, from people of all different backgrounds and political persuasions. It seemed like everyone who drove by, honked.

Our heritage is rooted in protest. Right now official American belligerence is dividing the world. Protest and the right to protest are very American things. America as we know it was born of belligerent protest. Our fathers and grandfathers fought for these rights. I tell you dear global citizens, this is a dark period. I am sure many of your own countries have internal struggles to varying degrees. But the worm will turn, and when it does we’ll be better for it.

A Word On Silver

Folks, I am not that guy. I don’t know where it comes from, but there is a powerful collection of sources out there that seem to constantly pump people up on silver with great effectiveness. I am not that guy.

But I am the guy who highlighted this X post last week in NFTRH 856, noting:

Before continuing, let’s note that the #silversqueezers are at it again. Irrepressible, are those silver bugs. Make of it what you will. Personally, I don’t like it. Never have. To me it is a dangerous mix of conspiracy theorizing and hype. I guess it’s kind of funny too.

I am also this guy:

This morning I got an email from a subscriber assuming that the target of 42 was still active. Well, no it is not. Not based on the Cup pattern. I remind you that I am this guy too:

If I see a pattern, I note it. But that always comes with caveats about what TAs who want to sound really technical call “pattern recognition”. That is a fancy way of saying “ooh look, I see a pattern that gets me excited!”, much like the TA who calls a freak Head & Shoulders with too many shoulders a “complex” Head & Shoulders. No sir, it’s a mutant that you REALLY want to present as something technical sounding.

TAs… picture them in the back room, a couple of them even with propellers on their heads, really wanting you to take them seriously, while the real analysts in the main office joke about them and accidentally on purpose forget to invite them out for happy hour after work (because they act like reverse magnets to the girls at the bar).

Man stares at chart; man sees something on chart. Man tells you about it. Man is wrong a good percentage of times. In this case, man was wrong about the Cup pattern. And it had nothing to do with conspiracy.

The point being, I don’t think there are any TAs out there who have made as much fun of TAs as me. We are not to be taken overly seriously. Especially those of us who really REALLY want you to see the mystical things we see in nominal stock, ETF or index/asset charts.

It is also why I consider TA just one tool of value to be used in conjunction with others.

Silver may well go to 42 and beyond, but it won’t be because of this Cup pattern, on which I was flat out wrong. My response to a subscriber who asked me to cover a few silver stocks, assuming the 42 target for silver is still in play. I will chart a couple of them, but to show their now bearish look, not for the leveraged gains they could make on silver and its off the table (for now) upside target. First, my response to him:

I will try to fit in some silver stock talk, H.

But I am not a silver bull. The target is the product of a TA seeing a pattern. You may know from reading me that I favor gold much more and indeed felt negative when the #silversqueeze garbage came out again over the last couple of weeks. I am simply not the silver bull that so many others are, which is why I don’t give silver stocks much airplay.

I had added MAG (now sold) for its pullback above the uptrending moving averages. It was sold for a small loss on April 1, after the #silversqueeze crap was noted. I am inherently suspect of silver promotions and silver stonks. To me, they are plays and not much more.

The chart has since taken on some damage. This can be a caution going forward for any holdings, in that a classic buy opportunity (ref. Friday’s NFTRH+ update on gold miner, NGD) can be broken. Again, man, charts, caveats!

MAG could recover, and were it a favored gold stock I might have held it, looking to add more lower. But not with this speculative position. I got rid of it while it was intact, and I’m not taking it back now that it is hinting a breakdown. I don’t love silver and I abhor the hype that is hard wired into its market.

These internet sleuths seeing things that evil forces are doing to repress poor silver. No thank you. That said, when silver moves, it really moves. That is why I poke it sometimes.

SVM was a position I took more seriously, and I took a more serious loss of 12% on it on Friday. It has dropped to a support area, and if silver stabilizes, I’d consider bringing this one back, as its operational performance is good. It’s a real company, at least.

But I am looking at gold stocks, first and foremost, in the precious metals patch. Always have, and probably always will.

Silver bugs talk about their junk coins (I actually held my old bags of junk quarters and dimes dear before selling them many years ago, and still have a few rounds laying around). They say things like “keep on stackin'”, with much bravado. Cause silver is gonna go to 200, like any day now! If gold is at 3000, silver HAS to go to 200, 500, whatever. #bullshit

Gold

Gold is value. Silver is a hybrid tag-along, that is relatively burdened in times like this with its more pro-cyclical, pro-industrial utilities. It is also often a byproduct metal, mined and processed as part of the process of refining other industrial metals.

On the positive side, it is used in medical applications, clean energy and is also thought of as a monetary metal. But it is not gold. Silver is more readily produced, abundant but also more consumable. It has its investment rationale. But as last week proved yet again, when the chips are down, silver is not gold.

Gold is value. It is value when it is floundering, as in the 2013-2019 phase of an economic boom cycle. It is value today, as its price gets marked up in times of economic stress and waning confidence. I cannot make these points strongly enough. I’ve made them over the years, but today it bears repeating because of the man throwing Monkeys and Spanners into the spokes of the macro wheel and the hype that is flying around at a 1000/mph.

These are pictures of gold doing exactly what it should be doing at a counter-cyclical time like this. Even as its nominal price took a $77 (2.5%) haircut on Friday.

Gold Mining

Despite the drop in the gold price last week, what is happening now is exactly what is demanded if we are to follow the proper fundamentals and capitalize on the counter-cyclical gold stock sector. Again…

Everything is currently in place. However…

NFTRH is not a gold price pump house. There are plenty of those all over the internet. People obsessed with the price of gold, the gains gold will make. “Just keep on stackin’!”

Gold is monetary value and it is insurance. It is also pretty and heavy. But that is beside the point. It is gold’s RELATIVE value in times of stress that matters. This is a boring concept that all too many do not consider because they are little more than gamblers. Traders. Speculators. Promoters. Greed mongers.

If we are going to grind out a real investment case (which in gold stock terms means a much longer trade than usual) in a liquidity constrained macro, it is going to be a product of the real price of gold as measured in the ratios of Gold/Silver, Gold/SPX, Gold/Oil, Gold/Copper shown above as well as many other measures of crashing confidence by the bubble herds.

Using Gold/Oil as an important example, gold mining is energy intensive. Gold (the product) has made its surge to target (3000+) while oil (the mining cost input) has tanked within its ongoing downtrend.

Aside from debunking yet again the “gold is silver is copper is oil is hogs” promoters (“commodity super cycle” touts) who implore their herds to buy real “things” (tangible resources) as opposed to the evils of paper (like stocks and bonds), seeing the market the way we do allows us to be free from that dogma, free from the grip of lazy thinking gurus who simply want to pitch us and take our money.

If stocks are part of the cyclical world (at least T-bonds have a counter-cyclical utility) and commodities are cyclical assets (they are physical building blocks of economies, as I have taken pains to point out repeatedly over the years) and that cyclical world is falling apart, why the fuck would you want to hold commodities? At least prior to whatever inflated ‘rebuild’ phase (both literally in war torn countries and figuratively after Central Banks start trying to spray the inflation hoses again) may be in the future?

Gold Mining Reporting Season

If we are right to be viewing this correction in gold stocks a “buying opportunity”, and I think we are, consider that gold has done this vs. one important cost-input driver, crude oil during the quarter soon to be reported. That is theoretical performance hard wired into the miners, assuming any individual miner does not screw something up, which is pretty much tradition for the gold mining industry.

Gold/SPX, Gold/Materials, Gold/human spirits and hopes for prosperity? These ratios are all rising. The macro-fundamentals of the gold mining industry are rising. I don’t say so. The Macrocosm says so. And let’s leave aside for now that these ratios have only jumped higher since the new quarter began on April Fools Day.

So where is the buy? Well, we discussed this in Friday’s NFTRH+ update on favored miner NGD. Could be here at the SMA 50. Could be lower at the SMA 200. We also discussed it in Friday’s pre-market article on gold stocks in general, using GDX.

Here is the GDX daily chart at the close. It is putting a hard test on the 50 day average (target #1). I think it’s got a better than even chance of dropping to the 200 day average (target #2) and a fill of the upper gap. People can cry “manipulation!” all they want, but to me it is the wrong kind of gold bugs puking out. With deflationary winds starting to blow, the inflation bugs (which is most gold bugs) are starting to panic.

This echos June of 2002, when HUI made a high of 155 and then dropped 40% into July, 2002 making a low of 93. That took place within the bull phase of 2001-2004 (which began amid a deflation scare, as is anticipated for today’s situation), when HUI made a low of 35 in November, 2000, and made its high of 258 in December, 2003.

That was a bull phase of 350%. Within it came a gut wrenching decline of 40%. That is the volatile way that gold stocks roll, folks.

I am not saying GDX/HUI would drop 40% on the current correction, which is only a sharp one day news-driven, margin-driven, hype-driven pullback at this point. But understand that we can have a pure fundamental view, but the market is going to do what it is going to do in the interim.

Personally, I view the SMA 50 as a “nibble” opportunity and the SMA 200 as a “buy” opportunity. In the Q4, 2008 crash (from a high of 519 earlier that year) I bought hard at HUI 250 as HUI got cut in half, then expended the rest of my powder at the bottom, HUI 150. It was scary, catching those falling knives. But it was ultimately very rewarding, as the buying was backed by a view of the proper fundamentals. Fleeting though they turned out to be as the rest of the macro was soon effectively inflated by the evil genius of Bernanke and his global accomplices.

Not to tout (well, yes to tout I guess), but this email comment I received some years later pretty much sums up that time:

I don’t know what Bob Hoye (from whom I learned the concept of the Gold/Silver ratio and its meaning to markets) was doing, but I was buying and praying that my fundamental view would carry the day, which it ultimately did. I remember clearly thinking “Oh jeez, I’ve got subscribers depending on me not to screw this up”. NFTRH was only a month old then! Ah, good times.

Today we have the fundamental planets aligning. But price will be price and funda will be funda. Eventually they will meet. But humans are humans and in the financial markets especially, I don’t like very many humans and don’t want their stink on me. I respect relatively few of these humans because I suspect their motives and/or I don’t respect their fundamental outlooks and/or I think they are over-intellectualized “experts”.

As I get older, I am less varnished and don’t really care whether I am polishing the narrative. Especially in times like now, when the rubber meets the road.

Bottom Line & More

My analysis is my own. I sense that a lot of people are promoted to the hilt out there. Promoted with ill-conceived fundamental outlooks and assumptions. You either get and agree with my outlook or you do not. It is built for the big picture. Not the daily and weekly ups, downs, noise and hype of the moment. Maybe some parts are of value, while others are not. But the segments above are core to what I am as a market viewer… and as a gold bug.

As symbolically and effectively indicated by the 30yr Treasury yield’s upward smash through the limiters (monthly moving averages) in 2022, it’s a new macro with new rules. This ain’t Grandpa’s “stocks for the long run” market anymore, because it’s not going to be as effectively propped by supportive inflationary policy. At best, the inflation will work to boost some areas (e.g. critical commodities, etc.), but overall it will probably be Stagflationary. But first, the deflation scare (if not actual and long-term deflation) we have anticipated ever since yields topped out and yield curves began steepening.

On the big picture, gold (regardless of its nominal price) is ramping in relation to all things cyclical (as well as US and global currencies). It is in those relationships (gold’s “real” price) that gold mining fundamentals will emerge and eventually be discovered by a wider segment of the herd. But buying gold stocks early (in the scheme of much higher price potentials to come) can hurt. In 2002 it hurt by 40%. If GDX were to drop to the 2nd target at or around the SMA 200, it would be a solid decline of 16% or so. Not bad.

That is the favored view, especially with what I think will be a solid Q reporting season upcoming. But the macro is massively in motion, a man is throwing Spanners and Monkeys around, and now other countries are throwing them right back. NFTRH is not a gold stock rag. It is not an ideologue. It is nothing other than a caller of what it sees. Right now it sees a bullish plan with a buying opportunity upcoming.

NFTRH also saw that in its first month of operation as the service started on September 28, 2008. Indeed, that is why I pulled the trigger and did it. It was “now or never” because everything was in motion. With the exception of a brief moment in Q1, 2020, I have not felt like this since Q4, 2008. I nicknamed those events Armageddon ’08, as I nickname many phases and indicators. In Armageddon ’08 you could be part of the herd, or you could stand apart and in a measured way, do things apart from the herd.

I’ve tried to do it that second way ever since. Often it has been difficult because in the robo-inflated, perma-bull markets we’ve mostly had from 2009 into 2025 what I had to report was robo-bull. Uptrends tended by policymakers at the Fed and in government. I did not like it because anybody could do it. Just assume they’ve got your back and speculate, baby! Well, I prefer the current Spanners and Monkeys macro. I get the opportunity once again to distinguish vs. the analytical herds.

Final Thoughts on the Miners

Let us not succumb to conspiracies and belly aching. The gold stock sector was again frothy from the standpoint of a fairly reliable indicator, the BPGDM. We noted it well ahead of time and should have been mentally prepared, in whatever form that takes. This sector knockdown is happening within a bull market and bull trend in the BPGDM. It indicates a pullback/correction that should prove to be a buying opportunity.

HUI had completely caught up with gold’s out-performance to “inflation expectations”. So it can be viewed as having accomplished its goal in the short-term. But as long as gold keeps rising in relation to inflation fears, the picture should remain fundamentally sound.

Let’s end on a note where the noise is quieted down and this long-term macro picture tells its story. The story has been one of bullish phases in the HUI Gold Bugs index that occur when the Fed is either dropping interest rates or had just recently dropped them. So, if you think the Fed is going to roll over in the coming months, you may also think that whatever low Huey makes in the coming weeks will be looked back at as a significant buying opportunity.

US Stock Market

We don’t need to belabor sentiment. It is deplorably over-bearish (contrary bullish). Risk ratings have recoiled to low from very high in December. The stock market is contrarian bullish. This is a condition that has enough fuel for a big rally. A “condition” that would be in place for such a rally. But in a bear market such “conditions” can persist for a long while before a bear rally manifests.

SPX has theoretically triggered our bear market view by dropping and closing below the August 5th low. It also filled the gap from May, 2024. I believe this is the opening act of the anticipated bear market. However, just one okay sounding news item, one utterance out of Trump’s orifice could ignite a rally like a tinder box. Oh, to be an investor who can read minds. Or to be one of those in the know, with a free license to become even wealthier.

Okay, that is speculation. The daily chart is oversold and speculates that SPX has entered a bear market, as it turns out the B(2) high was a kiss goodbye. Now that I have the downside marker in place, I am prepared to be a bear (ref. 3 current short positions, including two from this update, in the trading account at end of report, actually added before the bear signal triggered).

The favored view is that ‘3’ will bottom soon and something will ignite a relief rally. But that ‘4’ up will terminate in the 5600 to 5700 range. ‘5’ down will leave no doubt about the bear.

The much less favored view is that this is another A-B-C bull market correction, prior to new highs.

However, some of the biggest rallies happen in bear markets. I have put the portfolios back to highly risk-managed status, but also have a list of items to buy or buy back (for one example, they pried ALAB out of my dying hands, shoving a booked loss down my throat, but it is heavily on watch). I have all kinds of other things on watch as well. Items I like under normal circumstances and would play for a bear market rally.

First the market has to find a low. I hope he keeps his orifice shut this weekend. Later, if all goes to plan, it will be bear market management, meaning play some bounces maybe, but look for short setups.

Global Stock Markets

Not good, my global friends. Nobody wins a trade war.

Although there will be winners and losers on a relative basis. The US is thus far losing the war it started against the world. Do you remember back in Q4, 2024 when I noted a potentially grand contrarian situation where the US markets actually break bearish amid the “Make America Great Again” jingle? The 2025 rise since inauguration day in global markets vs. the USS Good Ship Lollipop is a pictorial representation of that.

And that includes vs. primary combatant, China, as Chinese large caps have turned the trend vs. US large caps (as we’ve been noting for months now).

Meanwhile, Canada broke down from the bearish pattern noted last week.

And Aussie is on the verge of a bear market if it ticks below its August 6th low.

While Europe has sliced through its 200 day average and looks to try to hold off a bear market signal, which would come with a drop below 480.

Japan’s Nikkei has also tanked from what we noted as a bearish short setup last week.

Let’s end the segment with the Canadian TSX-V, which is an index that should be bullish for a positive view on commodities, resources and even exploration stage precious and especially industrial metals miners and energy plays. In short, da ‘V’ is a speculative tailwind to these items when rising.

Unfortunately, this note from the March 28th Daily Notes played out to the “double top” scenario. Here is that note. Below is da ‘V’ after last week’s damage. It looks like it is on a gap filling expedition. I don’t want to touch any of the related stuff until this is resolved (I hold RIO.V and OGN.V, but consider them a cut well above most denizens of this index).

US Dollar & Gold/Silver Ratio

And here we come, full circle back to the 2 (would-be) Horsemen of the Liquidity Apocalypse. USD and GSR.

Except that Rider #1 has been bearish and Rider #2 has launched bullish. If we were to get a phase per the traditions of the 2004-2024 macro, we’d see them ride together. Gold receiving liquidity relative to silver (even if it declines nominally) and USD rallying on global risk-off liquidity bids.

What is actually happening, at least so far, is that USD has been declining and GSR just busted bullish. However, per NFTRH 855 two weeks ago:

Of course the Gold/Silver ratio has bounced back above its implied support. Because why would we ever want to have a definitive signal by which to navigate? So the GSR is still sideways with a slight bullish bias.

Now, as to Uncle Buck, the basis to call support at 103 is fairly flimsy. There are not a lot of lateral touch points other than the big one in 2020. That was a spike and immediate reversal, preceding the inflation problem cooked up by Fed and government at the time.

However, the shaded bearish pattern does measure to 103. That’s not nothing. USD has thus far held 103.

I have not touched the chart since then. The markups are exactly as they were. In that two weeks USD made another lunge down, tested the lower support area and on Friday recoiled back above 103. Meanwhile, its fellow rider made a launch that should be concerning for a large segment of the macro.

We have been expecting a liquidity crisis of some kind in 2025. It is likely arriving now. But will it be the 2001-2004 style crisis that saw USD weaken into a bear market and the GSR rise? That was a period that began deflationary and was in short order seen to by the Greenspan Fed and global central banks, eventually resolving inflationary. But back then USD was the foil, not the global liquidity receiver. To varying degrees gold, the Swiss Franc, Euro and other currencies gained that bid.

So now we need to consider whether our 2001-2004 analog is actually going to play out. Or will the situation be more of the tradition of the last 20 years, where the 2 Horsemen ride again and wreck the macro? We will refine the bigger picture narrative largely based on what USD does in the weeks and months ahead.

Portfolio

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

Taxable Account

In order of position size. Cash and Treasury equivalents are the massively held items. Beyond that, a few favored gold miners and a long-term Treasury bond position. Bring on a bear market rally, and I’ll buy some watch list items for a trade. A lot of good stocks got hammered because of indiscriminate selling. That includes gold stocks, which I’d add for more than a short trade.

Shorting is not something I am interested in until I get setups. I have not set this account for margin so I cannot outright short individual equities. Just bear ETFs. Of course, holding off until short setups appear is how I have missed deep market plunges and crashes in the past. So be it, when cash and Treasuries are managing risk just fine, and paying income. I am not a vigorous bear player.

Trading Account

Three short positions on quality but overvalued companies, so far doing well. But I’ll be on guard for any bouncy bull stuff. Again, hoping Trump keeps his market manipulating orifice shut this weekend.

Roth IRA (non-taxable, no contributions)

The chart is not pleased with itself this weekend. It’s a potential long topping structure, but still well elevated. I intend to keep it that way. I’ve already taken action on it and will continue to tweak as needed. Hedging, shorting and playing a bear market rally are all things that are on the table. But the default is risk management through cash and equivalents.

Macro’s in motion, baby. That is much better than that post-2020 inflated robo-bull, if you ask me.

Cash and equivalents are 90%, plus the 20+ year Treasury bond spec, which could be viewed as a defensive position as well. Obviously, any further damage to come can only be limited with that level of defensive positioning.

Generally there is no way I’ll speculate short with a market this oversold and this subject to a potential tinder box known as Trump’s orifice. Not when cash and short-term Treasury equivalents are managing risk and paying out. Notice a theme? I am not a speculating trader. I am a guy trying to Shepard a portfolio through choppy waters.

Gold stocks held are the ones they will have to pry out of my dying hands. I may hedge if I think we’re going to lower buying opportunity levels on the miners. But maybe not. Got to time that stuff right, which is easier said than done, for me at least.

As noted in the report above, I also have several bull regular stonks on watch as well. In this environment I’d probably favor Tech over cyclicals and inflation-sensitives, but in a spinning macro, that could change. Later, with short setups, I’d like to short index ETFs while individual shorts inhabit the trading account.

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.