The yield curve is flattening. I don’t cheer-lead a given view, but if I were to do that I’d be cheering for a yield curve flattener to put a correction to inflationist dogmatists quoting von Mises to the herds and otherwise sloganeering about inflation and a “commodity super cycle” (that term is pure promo).
Well, the curve is flattening.
Which means one of three things. Continue reading "Yield Curve Is Not Currently An Inflationist's Friend"
While I hold a special place (in my thoughts and in NFTRH) for the gold stock sector due to its counter-cyclical nature, it’s a big market out there, and a strategic view of the macro helps with successful positioning. Following is a snapshot of some sectors/markets with general thoughts on each. I will provide one chart or graphic for each but not mark them up or get into too much technical or fundamental detail. There’s a weekend report for all of that stuff. For now, a brief review.
Gold/Silver Mining & Royalty
Gold miners have been fundamentally impaired by the inflationary macro as costs (energy, materials, humans) have outpaced product (gold) for well over a year. As with other markets/sectors, sentiment became overdone to the downside in September, and from there (one of our key downside support targets at 230), we projected a bounce, and with some stops and starts, the rally logically began.
I have now seen an Inverted H&S (bullish) show up among gold stock ‘analysts’ (code for ‘obsessives’ if all they manage are gold stocks amid a field of many sectors that are actually working). We projected a pre-FOMC pullback to the SMA 50, which would be the healthiest thing to do during FOMC week, and that is what Huey has done. The H&S potential lives although the trends are down. Continue reading "A Brief Sector Review"
Inflation has permeated the macro markets; where to from here?
Apologies in advance for some of the possibly confusing content to follow. But if this were easy anyone could do it, eh? There are a lot of balls in the air; balls known as inflation vs. deflation and most of all time frames.
The media present inflation as this guy picking out higher-priced fruit. Wait till he gets to the meat department! You can click the graphic for the article at CNBC.
Meanwhile, the Biden administration’s Minister of (financial) Information, Janet Yellen, informs us that all that cost-pushed inflation about to be shoved into the economy is actually going to be anti-inflationary as it actually lowers some costs (in Wonderland anything is possible). Continue reading "Inflationary Wonderland"
Gold calmly continues cobbling its Handle; Miners lay in wait.
You see, there is all this noise out there. It comes mostly from inflationists touting gold in the same breath as copper, as oil, and as commodities of all flavors (and aside from gold and, to a degree, silver, those flavors are cyclical).
But you also see, gold is counter-cyclical in its best suit. You see on this monthly chart that gold has been forming its Handle to the bullish Cup ever since the inflation trades came to the fore in the summer of 2020. Therefore, you see that those touting gold and inflation together have been wrong for over a year now (and counting).
For those dealing in reality instead of dogma, gold is a candidate to break the Handle at any time. Then it would be off to the target at 3000+ over the course of a year or more. But reality holds another option as well, and that is to finish the Handle making lower.
So why not tune out the perma-pompoms in real-time, realize that the thing is bullish, but the trigger is either coming sooner or later? We are doing that more focused work in NFTRH and associated updates every week and will be on the spot when the proper signals engage.
This chart was created in 2020 as gold spiked to an all-time high and reversed (into the then-projected Handle). Continue reading "Gold; A Thing Of Beauty..."
US dollar (DXY) has activated its Inverted H&S, Gold/Silver maintains its uptrend, watch silver going forward…
I do not make predictions because I do not pretend to be a guru.* But NFTRH has been tracking what has been an uptrend in the US dollar for all of 2021, keeping us well aware of the potentials being realized from late summer into the fall. A higher low was made in May and now a higher high, completing an Inverted Head & Shoulders pattern that we’ve been projecting since USD put in the theoretical right side shoulder last spring.
Until recently it was a projection. Now it is active after testing the (dashed) neckline, holding the (blue) 50-day average and busting to a new high for the cycle. Simple, no predictions but a heck of a lot of attention and respect for the process.
You can see the three targets we’ve had laid out for the world’s reserve currency, which has logically caused market stress of late. It’s as simple as ‘you live (pump markets) by devaluing the currency, you die (markets correct) when it rebels. Now if the rebellion does not become something more than moderate and should end at target #1, we’ll probably go back to our regularly scheduled programming of pervasive inflation problems on the macro.
As you can see, the three targets are Fibonacci retrace levels. All doable depending on how aggressively risk goes off and man and machine seek liquidity (as opposed to market speculation) in the near term. Of note, the pattern itself has a theoretical measured target of 97. Again, not a prediction but now that the pattern is active a viable objective.
And speaking of liquidity, the issue is compounded when USD’s fellow Horseman (of the Apocalypse) is riding alongside. Continue reading "US Dollar On Plan, Attended By Gold/Silver Ratio"
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