Gold

Jordan Roy Byrne and Steve Saville are people that I think are highly knowledgeable when it comes to gold and the gold mining sector.  So this is not a post taking a shot at anyone.  Jordan focuses nearly exclusively on the gold sector and in my opinion does a good job either being right, or getting right when adjustment is needed.  He moves forward without hype, bias or ego.  Steve Saville is more diversified and a real sharp pencil in the drawer in his own right.

This morning Saville highlights Jordan’s video discussion of the gold Commitments of Traders alignment and why it is not necessarily to be feared in the manner that a certain hyperbolic technical analyst out there (30,000 [CoT] coffins anyone?) would have enthralled gold bugs believe.  Jordan’s video is here.

I purposely keep my public writing about the gold sector limited because there is enough noise out there in this overly noisy segment of the market.  But in NFTRH, we have been noting that if this is a bull market (folks, it’s not technically confirmed no matter what the pompom brigade would have you think) that “bear market rules are different than bull market rules” and so it is very possible that the current bearish CoT does not have to mean anything near what it has meant during the 2011-2015 bear market.  Indeed, in my opinion the worst thing about it is not the net short Commercials or the net long Specs, it is the over bullish little guy (small Specs).

While having all due caution in the face of the negative CoT buildup, the graphs below and the comments after them were when we began speculating about a possible change to “bull market rules” with respect to the CoT.  We reached back to the start of the bull market early last decade for reference.  It should be noted that Jordan subscribes to NFTRH, I assume for its coverage of the overall macro markets.

I am trying to avoid sounding territorial, but in this racket sometimes it’s about not being too shy to toot your own horn.  Toot toot…

From NFTRH 384 on February 28:

If I may affix my tin foil hat for a moment, let’s recall that in 2012 as the Fed announced full on un-sanitized QE(3) to take over from the expiring Operation Twist, the precious metals complex exploded higher. Many, including myself thought this policy would prove bullish. But that view was wrong because the CoT said it was wrong.

(more…)