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“Liberation day”, AKA the day the Europe got force fed Trump’s tariffs on the heels of Japan’s ingestion of tariffs, is cause for celebration in the world of equities. But it is also cause for celebration by Uncle Buck. Recall here that USD has done nothing until it crosses 99 at least, but more importantly 100 and then most importantly, 102, which would break the downtrend. USD has been downtrodden all year. This is normal.

Gold is cracking the lower Ascending Triangle line and the 50 day average today. If that is real, and not just a knee-jerk on the economic news, we’d be looking in the 3100 to 3150 area as the next support.

On the plus side, gold stocks are not broken in relation to gold (GDX/Gold ratio). Not by a long shot.

Also, the Silver/Gold ratio is hanging in there today. On such a firm day for USD I’d have leaned toward another drop in the SGR. But not today, not so far.

GDX is intact. It’s got a little gap where it would test the uptrending SMA 50 (blue) and the story remains the same; lose 50.32 and a door to a deeper correction to 46 opens up. I won’t ride that without hedging short or doing more profit-taking (loss limiting). But again, it has not even tested the SMA 50 on this pullback. I would, however, technically have preferred GDX tick a clear new high before taking this pullback because now a double top scenario is in play.

HUI Gold Bugs index is also technically fine at this time. In fact, it’s got a better look than GDX because it did tick a notable higher high.

The Semi sector apparently likes the tariff news the most as it jerks upward nominally, and also in relation to NDX and SPX. I have seen this movie before during precious bulls (2001-2008) and bears (most notably in the 2013 time frame when Semi led the cyclical world upward while gold stocks continued their bear market). Today’s situation is within a gold stock bull market.

Personal Strategy

So how do I deal with the above? The same way I have been. I will not short the stock market when it is in greed mode (I’d prefer to wait for roll-over setups), but I will play its game. The game has been to buy washouts or pullbacks and as per Friday, sell stocks that had big rallies. Previous to that items like CVNA and ZS were sold on big upside. Items like OKTA were bought on hard declines and those like GOOGL bought for bottoming patterns.

Today I bought a pullback in “bull stock” ZS to replace some of what was sold. ZS has been pulling back from euphoric heights while on my personal watch list. It cooled down, and now I am back in. It’s not a reco. It’s just one of my favored over-valued bull stocks. It’s not great technically, but this is about covering the market view and balance of holdings, not about one stock.

I will watch for others as well, in the event that the “movie” I have seen in the past plays out as it has before, remaining bullish (and over-bullish) for longer than I’d originally have thought. I will also sell the hell out of any holdings I see fit because it is a very high risk market, in my opinion.

Finally, I have got it in mind that I may have started basketing mineral exploration stocks at what could turn out to be an inopportune time (I’ll watch TSX-V, the TSX-V/TSX ratio* and the Silver/Gold ratio). If I was wrong to start in mid-summer I’ll trim those out, and maybe trim featured items TLO.TO and AE.V as well. I just don’t know yet. Today’s activity has already taken a bunch of paper profit out of remaining AE.V positions, so I’ll probably be inclined to hold it as long as it holds its chart basing pattern. TLO? I just don’t know. I love profit, but I also don’t want to look back in a year or two and think “woulda coulda shoulda” as I do with ISRG to this day 24 years or so after selling it.

Got to love the markets, eh? It’s very mental. All of the above is meant to be viewed as one man’s take on it at this moment in time.

* TSX-V/TSX is pulling back again today but firmly within an uptrend that frankly needed to be corrected.