Notes From The Rabbit Hole (NFTRH) Archives - Page 8 of 19

Chop & Grind: Gold, Stocks And Commodities

Posted on October 3, 2020October 2, 2020 by Gary Tanashian

Whether the market is foreign or domestic, equity, commodity, or metal the grind is on. Speaking of grind, the one in gold has been expected as the metal builds out its big picture Handle to the bullish Cup with an objective that is much higher. Let’s take a look at a few NFTRH charts to gauge the grind in several markets and by extension, the grind many feel on their nerves these days. It’s not a time to make money. It’s a time to preserve gains and patiently position.

For gold, the grind would be the making of a Handle after the Cup’s key higher high to the 2011 high.

The daily chart below shows the form it is taking; a falling wedge toward the first support area just above 1800. If the monthly chart above is to make a substantial Handle the gold price correction could extend to a test of the rising 200-day average. RSI and MACD are negative.

Easy now, it’s not a prediction, but don’t let the perma-pompoms tell you it is not doable. Let’s keep it muted ladies. Continue reading "Chop & Grind: Gold, Stocks And Commodities" →

Fed Rules Out Yield Curve Control (For Now)

Posted on August 21, 2020 by Gary Tanashian

That we are even having this conversation is proof that we are and have been in…

…Wonderland for years now.

Since at least 2001, actually. Back then Alan the Wizard Greenspan (mixing classic fairy stories, I know) began pulling levers that could never be un-pulled. There were no breadcrumbs with which to find our way back. Off the charts is off the charts. Exponential is exponential. And that’s when funny munny out of thin air entered the realm of normalcy; new normalcy where the financial system is concerned.

I assume that the ‘tool’ known as yield curve control (per this article) is part of ~~MMT (Modern Monetary Theory)~~ TMM (Total Market Manipulation) that the eggheads promote with not an ounce of historical monetary grounding, caution or even human-like soul. They are monetary Humanoids, AKA bureaucrats, AKA economic Ph.Ds with more statistical and theoretical knowledge than common sense. They released the FOMC minutes and policy micro-managers offer their interpretations. Continue reading "Fed Rules Out Yield Curve Control (For Now)" →

The Big Picture Continuum

Posted on July 18, 2020July 17, 2020 by Gary Tanashian

The Continuum (monthly 30yr yield with the 100-month EMA ‘limiter’) simply states that the economy was weakening, as were inflation expectations, before 2020. In early 2020 we got a real deflationary jolt from which asset markets are still clawing back, with full frontal inflationary support from a Federal Reserve desperate to keep asset owners whole (and further enriched) and to further punish savers and those without the means to invest in the racket.

They called Ben Bernanke “the Hero” but he was actually the perpetrator of the next debt-backed inflation that would further ruin the country, primarily by greatly increasing the divide between asset owners and everyone else. If we had taken the pain in 2008 and 2009 we’d be on a new system now. Instead, we are riding the Greenspan>Bernanke>Powell continuum. Yellen is omitted because nothing egregious happened under her watch. She slipped in between the cycles and fell through the cracks.

Racism? Scapegoating? Xenophobia? Paranoia? Polarization? Caricature of the truth and of the debate? It’s all in there and it’s all in one way or another compliments of the rigged monetary system promoted by the Fed and whatever party happens to be in power at any given time (let’s remember that Bernanke’s ‘rich richer, poor poorer’ scheme was cooked up under a supposed socialist president). The public is filled with political bias and hatred but is relatively ignorant about where the wheels of injustice actually turn. Continue reading "The Big Picture Continuum" →

Following The Gold Stocks Leaders As The Fed Prints

Posted on July 4, 2020July 3, 2020 by Gary Tanashian

Gold stocks have led the market for a year, and with economic deceleration and Fed policy response that leadership looks to continue [edit: today’s ‘in the bag’ bounce-back Jobs report does little to alter the economic deceleration theme]

We have been on a bullish gold mining view for over a year now. Over that time there have been three interruptions, the downward-biased consolidation from August to November 2019, the flash crash (and very constructive gap-filling mission) in March and most recently the pullback that logically began in May as broad stock market relief started to fan out to more and more momentum chasers who’d finally gotten the hint that the Fed means to devalue the US currency (in competition to a degree with its global counterparts seeking to do the same), making cash a non-viable investment position (other than for risk management to the bullish asset market atmosphere).

The daily chart of HUI shows a successful support test, purely up trending moving averages, all gaps filled but the breakaway gap (a ‘breakaway’ does not need to fill any time soon as it changes or reasserts a trend; there is also an old gap from 2016 near 100 that we need not worry at this time), RSI now positive and trending up above its EMA 20, MACD triggered up and positive and neither of them showing overbought readings. Ah, the beauty of a routine correction within an uptrend. All systems on this daily chart are technically ‘go’.

What’s more, the HUI/SPX ratio is now on an uninterrupted 1-year uptrend. With the come-lately players (institutions, hedge funds, black boxes, Ma ‘n Pa and knee-jerking herds of all stripes) having moved on to perceived greener pastures due to the broad stock market’s May-June outperformance the gold miners are again taking leadership. Continue reading "Following The Gold Stocks Leaders As The Fed Prints" →

Gold Sector Correction Is Maturing

Posted on June 21, 2020June 19, 2020 by Gary Tanashian

Gold Stock Seasonal Average

The HUI Gold Bugs index has over the last 2 decades (encompassing both bull and bear markets) tended to bottom in July per stockcharts.com's data for the index. A seasonal average is not a directive, but it is a (+/-) guide to be factored. Last year gold stocks bottomed in May as we caught what would be a violent upswing. This year I expect the low to be in June or July.

Why Gold?

As the stock market’s broad relief rally lumbers on, drawing the ire of bears that think it should be otherwise, a chorus of dissenting voices is blaming legions of shut-in Millennials and their Robinhood trading accounts for the excess. Maybe that plays a small part.

But here I’ll repeat that the Fed is balls-out printing money (really funny munny), manipulating Treasury and Corporate bonds and stating that it will have virtually no limits in this MMT (I would turn around MMT to call it what it actually is, TMM or Total Market Manipulation). They can give it a fancy name like Modern Monetary Theory but by any other name, it is chicanery and a scam that society will suffer the fallout from someday.

They are cheapening the munny units in order to give the appearance of rising asset (especially stock asset) units. Say it again… “they are cheapening the munny units in order to give the appearance of rising asset units.”

Hence, gold. The shiny rock, the bullion, the anchor to monetary sanity. In this surreal monetary realm, it is something real.

The goal of investing in or trading the gold mining sector is to capitalize on the desperate actions of monetary and fiscal policymakers vs. gold’s stability. Last week we covered a lot of details: Gold Stock Correction and Upcoming Opportunity. No need to repeat the details. People who know how to play this sector have been patiently managing the correction (whether that means selling into it, buying during it, being psychologically prepared for it, etc.) and planning for its end.

We keep a long list of quality miners, explorers, and royalty charts updated every week in NFTRH for this very outcome; an end to the correction and the next phase of gold’s bull market, which it is consolidating now, per this daily futures chart. If the negative RSI divergence does not resolve into a sharp drop soon it is going to then be big-time fuel for what could be a hysterical run-up to the 1940 target and possibly beyond.

Gold had become over-loved by financial refugees in March. They are now buying stocks again.* That is perfect because they should not be aboard the next phase. Their role will again be too knee-jerk and chase later on. Despite the consolidation since March, the daily chart (via TradingView) shows a completely intact situation at the up-trending 50-day average.

Gold/SPX Ratio

I’ll leave you with one final chart. There has been a reason gold has underperformed the stock market since the terror of early spring. That reason is because cyclical asset markets are and have been on a massive sentiment relief rally and sentiment will do what it will do in the short-term. Just remember that simple fact when you see the inevitable rationale like this that certain interests will try to feed you: Here Come the Golden Ghost Stories.

Gold/SPX has done a great job of taking out the excess while remaining intact. 5-year chart…

The Not So Great Reset

Lunatics far and wide talk about something called “The Great Reset” but that too is tin foil, whether aspects of it are true or not. It does not help your market management to have that crap in your head. Instead, let’s boil down the picture to the gold sector and realize that as the terror-stricken sentiment of March and April is being reset, so to is the over-enthusiastic sentiment in the gold sector.

The next bull phase should be arriving before long.

* I have been selectively long the stock market since March as well, but very aware of the gathering risks, which I personally and the NFTRH service manage accordingly.

Check back to see my next post!

Best,
Gary Tanashian
nftrh.com

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Tag: Notes From The Rabbit Hole (NFTRH)