In light of market moving events (Goldman’s ‘stocks are over valued’ Monday, JPM’s ‘PC’s are on a comeback, good for semiconductors’ Tuesday and this morning’s entry from the World Bank ‘Global growth to pick up in 2014, led by US’) in the media, we tighten up the ETF focus a bit.
How I [they] Learned to Stop Worrying and Love the Bomb [Market] paraphrasing Stanley Kubrick’s great cold war/nuclear paranoia film Dr. Strangelove (1964).
The USA thrived during a 20th century rife with war, famine and depression. This was a wealthy country however, founded on principles of self-reliance and valuing thrift, saving and honest work for an honest return. Add in unparalleled productivity and economically at least, the positives more than outpaced the negatives.
This week we add the long-term T bond (TLT) and crude oil (USO) ETFs due to their strategic value within our fundamental analysis.
GDX got a boost as the US stock market sagged. That is more like what we are looking for in the precious metals. Today GDX is trying to take the 50 day averages. Here is the view of this important parameter.
On Friday stocks went up, commodities went up… gold went up, with the weak ‘jobs’ report. All of this presumably because the Fed could decide to back off tapering QE because of the bad report.
Folks, today’s bad employment number is but one sample and it will probably take a trend to confirm anything about a softening economy. But with T bonds rising hard today and their yield spreads lurching in a gold positive direction, we continue the recent mini trend of improving fundamentals for the gold sector. Remember, gold is counter cyclical. On that note…
Another quick review for gold stock traders and investors... HUI has continued to decline in normal fashion. The gap was filled yesterday as expected and now 195 should hold on…
For those involved in gold stocks... The HUI correction continues to look normal. The gap has not filled yet and if it does and 195 is maintained, the index will…
The US economy is relatively strong and short rates are rising harder than long rates. This implies a continued ‘risk on’ environment. This is theoretically bad for gold but generally precious metals miners still remain constructive, technically, for a rally at least and a major bottom at best.
This morning, the ADP employment data was unsurprisingly strong at 238,000. Later today we have Fed minutes and on Friday the Employment report. (more…)
HUI is either dropping to fill a gap (not a bad thing) today or testing short term moving averages for support.
What Has Been
A solid 2.5 years of risk management (to varying degrees) has been required of precious metals investors. It was most intensely required after the announcement of QE3, when the net commercial short position in silver began a relentless march toward a very bearish alignment in late 2012 and then the HUI Gold Bugs index lost an important support level at around 460. Here is the chart of silver with a heavy commercial net short position from NFTRH 215, dated 12.2.12:
For anyone interested (and I continue to harp on the idea that most probably should not be, since NFTRH is a macro market manager, not a day trader service), here is a look at a couple of markets on which I have taken bearish positions.
Earlier in the week we noted the hard down and reversal in the precious metals as an indication to keep an interested eye on. We also noted that we’d want to see Thursday and Friday follow-on, preferably on volume. Yesterday added to the bull case as follows: