{"id":29280,"date":"2014-09-11T09:04:49","date_gmt":"2014-09-11T13:04:49","guid":{"rendered":"http:\/\/www.ino.com\/blog\/?p=29280"},"modified":"2014-09-11T09:04:49","modified_gmt":"2014-09-11T13:04:49","slug":"sentiment-shifting-for-gold-bugs","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2014\/09\/sentiment-shifting-for-gold-bugs\/","title":{"rendered":"Sentiment Shifting for Gold Bugs"},"content":{"rendered":"

From a post on the HUI<\/a> at the site last week:<\/p>\n

\u201cThere are worse things that could happen than filling a gap and scattering the wrong kind of gold bugs back out.\u00a0 Then it would be up to the longer-term charts to do the heavy lifting if the daily does fulfill this downside potential.\u201d<\/em><\/p>\n

The gap was filled, the top end of the anticipated support zone was reached and indeed, the wrong<\/em> [i.e. momentum players] kind of gold bugs are scattering back out.\u00a0 The hard sell down on Thursday was very likely due in large part to the selling by traders with a fetish about gold as a geopolitical or terror hedge.<\/p>\n

We should continue to tune out these people and while we are at it, tune out the \u2018Indian wedding season\u2019<\/em> and \u2018China demand\u2019<\/em> pumpers in favor of real fundamentals like gold\u2019s relationship to commodities and the stock market, the Banking sector\u2019s relationship to the broad market, Junk Bond to Quality credit spreads and US Treasury bond yield relationships.<\/p>\n

It\u2019s boring stuff compared to all that demand in China, Modi\u2019s pro-gold regime in India and of course how we are all going to go down the drain amidst war, terror and an age of global conflict unless we have a \u2018crisis hedge\u2019.\u00a0 The only terror gold investors should care about is that perpetrated upon paper\/digital currencies by global policy makers.<\/p>\n

So last week was good in that it blew out those who were hanging on through the 2 month long grind that did indeed turn out to be short-term topping patterns.\u00a0 I don\u2019t mind telling you that my patience was tested by the bullish spirits, especially on up days with Ukraine in the headlines.\u00a0 I did not think it would take 2 months to resolve, but every time the sector looked like it would crack, a new geopolitical flashpoint would show up in the mainstream financial media.<\/p>\n

That condition is now being closed out.\u00a0 Taking its place could be a bottom of at least short-term significance (i.e. to a bounce).\u00a0 We have a fundamental backdrop that is not fully formed and a big picture technical backdrop that has degraded in gold and silver and is not proven in the equities.\u00a0 So whether we bounce only, go bullish for an extended rally or even bull market, or (and it\u2019s still on the table folks) fail into the \u2018final plunge\u2019 scenario, we are dealing in potentials, not confirmed trends.<\/p>\n

Moving on let\u2019s check sector sentiment.<\/p>\n

\"st.au.optix\"<\/a><\/p>\n

The current hook down in gold\u2019s Optix (Sentimentrader.com<\/a>\u2019s aggregated Public Opinion data) is correcting recent surges in optimism.\u00a0 This is coming amidst a small positive trend.\u00a0 \u2018Uh oh, dumb money is getting positive!\u2019 think contrarians anxiously.\u00a0 But the historical view shows that the Optix rises in the initial stages of a bull market.<\/p>\n

So I am not calling a new bull market here, but I am calling a condition to one, which is a positive trend (subject to ongoing corrections like the current one) out of deeply depressed levels by the Gold Optix.<\/p>\n

\"st.ag.optix\"<\/a><\/p>\n

Silver is even better, as it became way over loved, conveniently right at the time we noted severely over bought technicals in nominal silver and in its relationship to gold.\u00a0 If we were to go strictly by this graph (which we of course will not) it looks like silver is ready to bottom and turn up.<\/p>\n

A view of how unhealthy silver\u2019s sentiment backdrop became recently comes from the most recent spike in the Optix to near the red line, while the price of silver barely went anywhere.\u00a0 Again, we cannot make foolproof claims about what lay ahead but what we can claim is that a bearish condition is gone, replaced by a more bullish one.<\/p>\n

The bottom line is that while gold\u2019s technical situation was compromised last week and silver is testing major support one more time (4th) than I personally find agreeable, the sentiment backdrop has become more favorable.\u00a0 Not shown above are the Commitments of Traders data, which improved again last week, but have room to improve further.<\/p>\n

This segment will probably be released as a public article to maybe try and convert one or two more people away from the stuff talking about weddings and war and corresponding sentiment traps that people in this sector all too often fall into from a bullish perspective.<\/p>\n

Gold is getting drubbed in ratio to the US stock market and in the face of a strong US economy.\u00a0 Those are facts and also fundamental considerations.\u00a0 In seeking a macro pivot phase, we are looking ahead to a potential time of change, but easy connect-the-dots analysis is not going to bring such a phase on, no matter how often the wrong kind of gold bugs click the heels of their ruby slippers.<\/p>\n

We\u2019ll clip it here and move on to the nuts and bolts technical and fundamental analysis.<\/p>\n

[end excerpt, new material follows]<\/em><\/span><\/p>\n

Mark Hulbert:\u00a0 Gold may be a buy as investors turn ever more bearish<\/a><\/strong><\/p>\n

Okay, Hulbert\u2019s HGNSI is on board the contrary theme as well.\u00a0 That only reinforces matters.\u00a0 Gold trend followers are now hyper bearish, which is good because this is one sector you buy when it is reviled, not cheered for.<\/p>\n

\"hgnsi\"<\/a><\/p>\n

But let\u2019s also keep in mind the reason why said trend followers lurched bearish; a very real technical breakdown per this overly simplified chart of a Symmetrical Triangle breakdown.\u00a0 That\u2019s what\u2019s got everyone freaked out.\u00a0 Support at 1250 must hold and gold needs to reverse back above 1275 and then we could have a view of a bear trap getting sprung amidst over done negative sentiment.<\/p>\n

\"gold.weekly\"<\/a><\/p>\n

Subscribe to NFTRH Premium<\/a> for your 25-35 page weekly report, interim updates (including Key ETF charts) and NFTRH+ chart\/trade ideas or the free eLetter<\/a> for an introduction to our work. <\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

From a post on the HUI at the site last week: \u201cThere are worse things that could happen than filling a gap and scattering the wrong kind of gold bugs back out.\u00a0 Then it would be up to the longer-term charts to do the heavy lifting if the daily does fulfill this downside potential.\u201d The […]<\/p>\n","protected":false},"author":41,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[1840,4273,23,5519,615,5092,4785,294,6613],"class_list":["post-29280","post","type-post","status-publish","format-standard","hentry","category-general","tag-biiwiicom","tag-gary-tanashian","tag-gold","tag-gold-forexxauusdo","tag-gold-bugs","tag-nftrh","tag-notes-from-the-rabbit-hole","tag-silver","tag-silver-forexxagusdo"],"yoast_head":"\nSentiment Shifting for Gold Bugs - INO.com Trader's Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wwwtest.ino.com\/blog\/2014\/09\/sentiment-shifting-for-gold-bugs\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sentiment Shifting for Gold Bugs - INO.com Trader's Blog\" \/>\n<meta property=\"og:description\" content=\"From a post on the HUI at the site last week: \u201cThere are worse things that could happen than filling a gap and scattering the wrong kind of gold bugs back out.\u00a0 Then it would be up to the longer-term charts to do the heavy lifting if the daily does fulfill this downside potential.\u201d The […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/wwwtest.ino.com\/blog\/2014\/09\/sentiment-shifting-for-gold-bugs\/\" \/>\n<meta property=\"og:site_name\" content=\"INO.com Trader's Blog\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/inocom\/\" \/>\n<meta property=\"article:published_time\" content=\"2014-09-11T13:04:49+00:00\" \/>\n<meta name=\"author\" content=\"The INO.com Team\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"The INO.com Team\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"5 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/wwwtest.ino.com\/blog\/2014\/09\/sentiment-shifting-for-gold-bugs\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/wwwtest.ino.com\/blog\/2014\/09\/sentiment-shifting-for-gold-bugs\/\"},\"author\":{\"name\":\"The INO.com Team\",\"@id\":\"https:\/\/www.ino.com\/blog\/#\/schema\/person\/d86a8cce826b7bd105200d88bb28a280\"},\"headline\":\"Sentiment Shifting for Gold Bugs\",\"datePublished\":\"2014-09-11T13:04:49+00:00\",\"dateModified\":\"2014-09-11T13:04:49+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/wwwtest.ino.com\/blog\/2014\/09\/sentiment-shifting-for-gold-bugs\/\"},\"wordCount\":989,\"commentCount\":7,\"publisher\":{\"@id\":\"https:\/\/www.ino.com\/blog\/#organization\"},\"keywords\":[\"biiwii.com\",\"Gary Tanashian\",\"Gold\",\"Gold (FOREX:XAUUSDO)\",\"gold bugs\",\"nftrh\",\"notes from the rabbit hole\",\"silver\",\"Silver (FOREX:XAGUSDO)\"],\"articleSection\":[\"General\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/wwwtest.ino.com\/blog\/2014\/09\/sentiment-shifting-for-gold-bugs\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/wwwtest.ino.com\/blog\/2014\/09\/sentiment-shifting-for-gold-bugs\/\",\"url\":\"https:\/\/wwwtest.ino.com\/blog\/2014\/09\/sentiment-shifting-for-gold-bugs\/\",\"name\":\"Sentiment Shifting for Gold Bugs - 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