HUI Daily Technicals
HUI got above the 50 day averages and changed the daily trend by gapping up January. It then made a consolidation handle, which found support at the EMA 50 in early February. It then became gappy as aggressive buyers chased it up to its over bought state (as of yesterday).
GLD is on a strong bull signal, but getting over bought as it heads toward the equivalent of gold 1340, our short term target. Over bought is seen in distance from EMA’s 10 and 20. A pullback would be normal.
As we did with SLW last week earlier this week, today let's take a look at a speculative leader to the precious metals rally and plot a near term upside…
Gold is Monetary Value
We preface the post with a statement that has not changed since I began public writing nearly 10 years ago: Gold is not about price; gold is about value. This point was hammered home to me 11 years ago by a person who had much influence upon my viewpoint toward the financial system and its various diseased components at a time when I was ready to listen and understand.
So whether we are talking about 2013’s epic price crash or a new bull trend in 2014, the simple fact is that physical gold itself is a store of monetary value. That applied last year as the value was marked down by greed and confidence and it will apply this year as it is marked up in the face of a likely unwinding of those things. Humans, what funny and hyper kinetic animals.
Precious Metals Speculation
Ah, but this post is about the fun part, the speculative part where we humans can make gains from gaming the simple store of value and its wild little brother, silver. As asset market speculators we care about prices, right? How about the share prices of the completely blown to bits miners that dig the stuff out of the ground?
The ‘bounce’ has been more powerful than I thought it might, bringing the prospect of the next up phase – indeed a potential melt up phase – into the picture. But one leader has been negatively diverging the rally of the last week…
Today there is some turbulence. Good, an extended rally scenario would not want to see the sector fly up to excessively over bought levels all in one big gulp. HUI…
A low priority update on Silver Wheaton's daily technical status. This post is not meant to call anyone to any sort of action. It is just noting some data points…
GLD climbed above lateral resistance yesterday and moved above the trend line. It is on a bull signal by all data points. The pattern measures to 129 assuming the green line holds as support.
Stocks, precious metals and the general commodity sector are all rising today. The Dow and S&P 500 are right at ‘bounce’ resistance now but a negative for the bear view is that leaders like the NDX and SOX are above their 50 day moving averages.
Yesterday’s bull fest seems to have quickly brought on thoughts of ‘here we go again’ if anecdotal evidence is any guide (referencing people’s comments at bearish sites like Slope of Hope among others). There were also a couple of emails from NFTRH subscribers putting forth thoughts on a near term bullish case for US stocks. One of those emails is copied here at the author’s suggestion. I will answer as best I can, point by point…
Franco Nevada (FNV) is described as one of the best (if not the best) run precious metals royalty plays by people who seem to know their stuff, fundamentally. What I…
GLD is on a weak bull signal. It must get above the downtrend line or risk fading to neutral or bearish.
The following is the opening segment of this week’s Notes From the Rabbit Hole, NFTRH 276:
Somewhere along the road from the 2000 bottom in gold stocks to the 2008 flame out of inflationary hysteria, the gold stock sector went from counter cyclical first mover to ‘inflation trade’ also ran. Gold stocks put in a secular bear market bottom in 2000 just as the US and many global economies were topping out.
Then came the era that NFTRH has labeled ‘Inflation onDemand’ (IoD). The economy was successfully* inflated by Alan Greenspan early in the decade as easy monetary policy fomented an epic credit bubble, which took over and did the heavy lifting for a cyclical bull market and buoyant economy that terminated hard in 2007/2008.
During this time of IoD ‘inflation bulls’ and commodity bulls who had all the answers for a newly inflation-phobic public emerged and took center stage. Misperceptions were formed, cemented and driven home. Nowhere were the misperceptions more intensely and dangerously embedded than the gold stock sector, which at its core is different than most commodity sectors and indeed, most stock sectors. Introducing another one of our ‘busy’ charts to illustrate…
Okay, article over… the chart says it all. No more words necessary! :-)
The chart is a confusing jumble you say? Okay then, let’s take it point by point.
