Death of the Dollar? Gold is an Inflation Hedge? Really?

[ed: Excerpted from NFTRH 301's opening segment.  Those looking for paint by numbers directions and casino game instructions (talking to readers at a certain site that may or may not re-publish this article) feel free to just skip the article.  You will not get what you are looking for.  The balance of NFTRH 301 did the nuts and bolts technical work on the relevant US and global markets, precious metals, currencies, etc.]

Take a look around the gold bull landscape and tell me how many of them are featuring a chart like this, showing the US dollar in a bullish short-term stance (to go with the weekly bullish stance we have noted for so long in the ‘Currencies’ segment).

usd.daily

This is not to say that the US dollar has real value. How can it when it is hopelessly dragged down by a national debt-for-growth obsession. But as with gold, value is one thing and price is quite another. It is just that one (USD) receives a price bid due to a ‘nowhere else to hide’ sort of mentality by the majority when asset market liquidity becomes constrained and the other (Gold) receives a more solid value bid, over time.

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Uranium; Hype or ?

Last week we did an NFTRH+ on Uranium in general, with a focus on the Global X fund URA.  I personally decided to take a try with its largest holding, Cameco today on the drop to the SMA 200.  The next clear level is at just above 20.

ccj

Of interest is Uranium holder Uranium Participation, U.TO, as it sports a healthy premium to its NAV as of the end of June ($CAD 4.03/share vs. today’s stock price of 4.95).

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What’s the Canary Doing?

Last week the Canary in the coal mine had a hiccup.

sox

SOX daily, from NFTRH 300

Further, the Canary’s Canary, the Semi equipment stocks took a hard hit.  The equipment stocks like AMAT, LRCX, KLAC, etc. were the ones whose ramp up we used to gauge coming economic (esp. manufacturing) strength [note: AMAT is making a Hammer candle at S/T support today].  Sooner or later the SOX’ big picture, massive breakout around 560 may get tested and that test would mean only everything for the broad markets.

Meanwhile, the S&P 500 ambles along…

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Fed Balance Sheet & Gold

Gold led the massive Fed balance sheet expansion in 2008, rolled upward in concert with the more gently expanding balance sheet and then topped out and dove as the Fed balance sheet kept on… well, you know.

So, despite the promotion of QE 3 gold (and silver) tanked into a bear market.  The question is whether or not gold is still leading the Fed’s balance of ‘asset’ holdings or whether gold through various – and well documented – official manipulations like the inflation-sanitizing Operation Twist, has some catching up to do.

fedbal.gold

Fed Balance Sheet & Gold, courtesy of MacroTrends

NFTRH 301 Out Now

36 pages and we never even got to the gold and silver CoT data or market sentiment.  That is fine because it is time to be following technicals from both short and longer-term perspectives and of course, the macro fundamentals.  Another good report this week.

NFTRH 301, out now.

nftrh301

Bubbles & Schemes

Guest Post by Doug Noland

Cracks appearing in junk bonds?

The “economic sphere” versus “financial sphere” analytical framework has in the past been a CBB focal point. Over recent years I have not given this type of analysis the attention it deserves. Conventional analysis holds that the real economy drives the performance of the markets. During bull markets, pundits fixate on every little indicator supposedly corroborating the optimistic view. These days, the bulls trumpet strong underlying profit growth as supporting ever higher stock prices.

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Wim Mertens

I just shared this with my musically inclined daughter and thought I’d put it up here as well.  I always liked Wim Mertens, especially when in a certain mood.  1:12:10 (or so) begins a song that is just amazing; blows me away.

Short Spain iShares (EWP)

Spain iShares EWP was one of two (Italy being the other) Euro markets NFTRH has used over the last year to gauge speculation over in that bubble.  The target for this market that people were running away from in droves (including its bonds) as recently as 2012 has been 44.  Check.

ewp

The stop loss would be above 43.  Otherwise, if my macro view does not change this could be a good hold back down to 30 or so.  Again, like with SPY, it’s a straight short with no leverage.