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:
First, please understand how much the many notes I received from NFTRH subscribers upon my father's passing meant to me. Thank you so much for your thoughts. This is about…
Given a potential bottoming in the Uranium sector, the Uranium ETF URA is added to the Key ETF updates.
Uranium prospect UR-Energy is up 17+% today. I had noted that the position was increased on a down day recently. I am using today’s pop to take a partial profit of about 18% in the form of those extra shares as URG bounces to short term resistance. I may also take the remainder of the profit before day’s end or tomorrow. I have not decided on that yet.
Since Broadcom was first presented in an interim update and I am still holding it, I wanted to update its status for anyone interested. The target is at or just above 30, but I am going to take my humble 4.4% on it and move on.
The following is an excerpt from NFTRH 270, dated 12.22.13:
Now What? This is What
From NFTRH 269’s opening segment ‘Market Correction on Cue, Now What?’:
“The question now is whether or not this is the start of a larger topping scenario and the answer to that question is for now at least, no, not by evidence showing up in our indicators like junk bond (risk on) speculation and sentiment, which was dialed back from heartily over bullish to neutral by the correction of the last couple of weeks.”
With things in the media like a market strategist declaring he wouldn’t buy gold with his worst enemy’s money (CNBC) and SoGen declaring gold is finished as a safe haven investment (MarketWatch) I am given doubt about our nice neat downside technical targets. The targets are there mind you, but technical analysis can go right out the window with one shift in the markets as we all know.
Party goers are gathered around the punch bowl as expected after the FOMC’s token move on QE. Jeff Lacker is jawboning additional tapers in $10b chunks and all seems right, except… the ‘continuum’ (AKA the 100 month EMA on the 30 year bond yield chart).
Let me ask you Beuller, what happened at the red arrow in 2000? What happened after the red arrow in 2007? What happened after the plunge in 2008? What happened after the red arrow in 2011? What happened after the most recent bottom in 2012? The answers are 1) the end of a secular bull market in stocks, 2) the end of the last cyclical bull market in stocks, 3) the birth of the current cyclical bull market in stocks, 4) the end of the big cyclical commodities rally and 5) the launch of this most powerful leg of the cyclical stock bull market.