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As noted previously, NFTRH 908 is abbreviated due to a personal commitment.

Summary

Precious Metals (bull market): Correction still in effect, but notable that PM complex was positive on a down market day. This supports our view that the precious metals lead, down and up. But it’s just one day. GDX popped, left a gap, dropped the next day to fill it, and then popped again. But it is pertinent that the PM complex did not track the bearish stock market, for a day at least. Let’s see if it happens more often. Personal plan is to perhaps pick off a couple more items, but with the view that gold stocks will not be special if the view of inflation to be unleashed by Fed/Government proves accurate.

US Stock Market (bull market): Sentiment (contrary bullish) has ticked further toward extreme fear, but not yet to the epic levels of the 2025 correction. This is working very well with our targeting, which using SPX as the example, is to test the 2025 pattern top below 6200 (38% Fib retrace level is 6174). That would be a routine 12% correction, peak to trough. Personal plan, subject to change, is to cover shorts on a drop below 6200 while holding/adding longs for projected H2, 2026 rally.

Global Stocks (bull market): Many European stocks are already testing their 2025 pattern tops. It appears slightly ahead of the US in the correction, while some markets are far from such a test (e.g. EM, Asia, Canada), but likely to get closer. India is dive-bombing, long-since below the SMA 200, Australia took a beating well below the SMA 200, as did China large caps. Japan’s Nikkei is in a short-term bear pattern well above its 200 day average, and looking to test it. In other words, global is all over the place, but generally in corrections from routine to severe.

L/T US Treasury Bonds (bear market): Bonds have taken a beating due to the perception that war is driving oil prices up, along with others like all-important fertilizer. These in turn will drive up associated costs. This in turn means “OMG, Inflayshun gonna kill us all!” This is not inflation, it is war driving up some prices. This is expected to prompt economic weakness and ultimately, a liquidity problem and/or deflation scare. Bonds expected to bottom and turn back up (yields top out and drop) in the interim, which was the view before the man sent us to war because… reasons. Big picture view remains inflationary and thus, bond bear market.

Commodities/Resources (bull market): Most will follow gold/precious metals as usual. Correction still in effect (outside of war-driven commodities like oil and its knock-on effects). The post-corrective play often goes like this: Gold > Gold Stocks/Silver > Commodities (in non-linear fashion)/Stocks. In the expected 2026 market recovery, commodity-related stocks should play a prime role.

US Dollar (bear market): De-dollarizers have been punished as Uncle Buck is on a 2 month rampage while the Gold/Silver ratio is biased for more upside. This is a still a warning to many markets, including that the precious metals could still see some hard volatility. Later, the 3 (Trump/Bessent/Warsh) Amigos are expected to promote what may seem like a nice bailout at first, but turn virulent in 2027 for the worst inflation problem yet, if not a Crack-up Boom (check out Friday’s public post if you have not already).

Comment: Currently viewing the situation much like the 2025 correction and to a more moderate extent, Q1, 2020. What we need to do is not be thinking like the majority of investors, i.e. the herd. Hence protection and risk management first, capitalize second. That second thing is the more fun thing.

Email From a Subscriber

Thank you to ‘L’ for doing some of my work for me in this abbreviated edition. I think L’s email can be helpful to other readers. So here goes.

Hi Gary,

Hope this email finds you well.

The following I’m almost certain you will touch on in this weekend’s report, but still would like to double check with you.

Something that stood out to me today is that, while SPX is taking a 2% drop, Gold and miners are actually doing great. This seems to be a break from the weeks-long correlation between SPX and gold that had been valid until yesterday, where if SPX dropped 0.5% then gold would drop 2-3%, if SPX had a Trump pump rally gold would too (they travel in the same direction). Obviously, this is just one day & could be premature, but I think it is still significant given what a bloodbath the general market is today.

I know you’ve mentioned this possibility (gold bottoming first, then rest of the market), but you’ve also noted that even if gold miners recover now they may no longer be “special” in the current macro. I guess what I’m trying to ask is: Do you think it is still possible for gold miners to regain their “pristine”/”righteous” fundamentals, even if only for a short while, especially given how SPX could drop further to 6100 (if that counts as “waning confidence”)? (obv. this still needs many things to play ball, such as oil) Or from this point forward the likeliest we’d get would be the 2009-11 phase (rising miner share prices, but worsening fundamentals, IIRC)?

Sorry if that’s a bit long-winded; feel free to respond by simply doing your usual coverage on markets & PMs this Sunday.

Also, thank you for your macro analysis during the past few years; it has been solid, especially on risk management.

Best,

L

• I am well, thank you. Wish the same for you, L.
• Gold/PMs had a washout event while SPX just remained aloft with a bearish chart that was biasing downward. It was very viable to believe that gold would be leading the markets lower, eventually. This, based on history.
• You are right. It is just one day. Let’s keep it in our, err, let’s remain balanced. Precious metals remain in technical correction.
• Yes, I think it is possible for the gold miners to reclaim unique status for whatever period of time that the macro may remain bearish and the effects of coming inflationary operations have not (yet) taken root.
• Last year gold and the miners were relatively bullish while the stock market took a bad correction. I don’t see a reason that can’t happen again. Especially since the PMs have already been beaten like a red headed stepchild while stocks got off relatively unscathed (until just lately).

Trading & Investing Discussion

Trading

The trading account continues on its mission. That mission is to understand what it is, what its identity is. Its identity is to be a dirty rotten scoundrel, unaligned with anyone or any dogma, bias or ideology. Its mission is grow from a small account to a less small account, and do it decisively and without emotion.

Beginning with the big crack in silver on January 30th (puts were sold that day, too soon, and extremely profitably), it has only been profit. That profit has come from those puts and shorting precious metals. Today, the account holds two positions short, GOOGL and PLTR. I am more comfortable outright shorting than thinking I can replicate the SLV success with options trading.

Those two items were shorted because of a daily chart breakdown (GOOGL), and per a February 18th NFTRH+ update, respectively. So far they are profitable. I don’t expect to hold them too long. That is in line with the current market view of a correction, not a big bear phase.

Generally, I’ll poke away at shorts like that until it is time to be long and pretty much long only. At that point it is possible I may add call options, but only on no-brainer type situations like silver was in January. More likely, I’ll not be greedy and simply buy stocks. Whatever I do, I am going to do it decisively, especially with respect to tolerance and risk management.

The darn account is up 43% since I began working it in late January. The key here is to not let anything go to my head, KILL bad trades quickly and take profits aggressively. There will always be another trade if I take a loss or end a position too soon. Think like a Grim Reaper, Gary.

Investing

First off, I have never thought of myself as an “investor” in a jerry rigged system supporting a stock market bloated by official efforts to keep it inflated. Well, I am an investor in one item; the long-term value of gold. You know that already. Semantics aside, let’s talk about my version of “investing”, which is actually trying to avoid cyclical drawdowns (as per today’s hedged status) and capitalize on extended rally phases. These are measured in months or years, not days or weeks.

Daily and weekly moves, to me, are the realm of day traders. I am talking about the macro swings. For example, risk management into the 2020 crash and bull positioning coming out of it. For another example, just last year, risk management into the 2025 correction (with the understanding that gold and gold stocks were relatively and conspicuously bullish), bull positioning coming out of it, followed by today’s risk management in anticipation a coming multi-month up-swing.

If I have a weakness, it is that I am not a gambler. I literally walked into a casino in Vegas many years ago, looked at the peoples’ dour faces and got the hell out of there. It was like Club Misery. A soul-sucking environment. Considering that my view is that the markets are a giant casino, you can see the areas I may not naturally fit. I am plucky, however. I’ll try to manage my conservatism as well as I manage my greed.

I am a “sure thing” guy. Well, there are no sure things and on the upcoming macro swing (projected, obviously nowhere near reality and may never become reality) I want to try to get more “in” so that I can take better advantage of my work, if it proves out well on the next macro swing (as it much more often than not does).

Since the market top, I have been talking about internal rotations and diversification. I remain aware of, and will try to stay somewhat aligned with the rotations, and am diversified across several sectors/asset classes (ref. last week’s portfolio segment).

Bottom Line

Thus ends abbreviated NFTRH 907.

Precious metals making some positive signs, price-wise, after flashing a big positive on a risk/reward basis. Could still be some hard grinding and volatility. Gold leads, others follow if things play out logically. Once gold bottoms and turns up, attention turns to silver and commodities.

Stock markets doing the “right” thing to a degree that I don’t recall ever seeing. Such bearish daily chart technicals actually play out that way. It’s almost as if the market wants to tempt bears in and then trap them. We await downside targets, which for SPX are still another 4% to 5% lower. It’s at least conceivable that the bottom could arrive as soon as this week.

Let’s also keep in mind that a target is just a target. It is not a stop sign. SPX below 6200 may not supply the necessary fear and angst to fuel the next big upside macro swing. What’s more, a crack of support at around 6127 could open the gates to a quick and final swoosh. Sort of like a lite version of what the precious metals did. Keeping options open.

Macro continues to see stress in the short-term, to be followed by a new inflation operation by the Fed/Government, headed up by the 3 Amigos (Trump, Bessent & Warsh). Much like Powell had a little Yellen on his shoulder whispering in his ear (“transitory inflation”) back when he was “too late” to fight inflation in 2001 into 2002.

Refer to the In-Week Notes under the NFTRH Premium menu at nftrh.com for market talk and occasional trading info, if interested. Also, you can follow on X @NFTRHgt for notice of updates.

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