Category Archives: Financial Markets

Gold Commitments of Traders

Silver’s CoT was bad for a while.  This week, gold’s CoT, which had been degrading steadily, got hammered by the goons into the worst of the corrective hit.  Funny how no word of the CoT data or the over bullish gold bug sentiment showed up in the headlines of the gold websites among all the ‘gold stock breakout!’ and ‘Ukraine bullish for gold’ partying.

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[edit] Note that the large specs, many of whom are hedge funds, got longer into the hit.  Tell me again whether these guys are smart money?

Run Gold Bugs, Run!

Finish your ritualistic selling squall so that the rest of us can get about taking this sector forward.  I swear that even though I see things like the Ukraine hype fully in advance I tend not to realize just how consistently this happens.

Gold bug hears Ukraine and ‘Gold Stocks Break Out!’ hype, buys gold stocks.  Gold bug sees gold stocks going down as hype unwinds, sells gold stocks.  WTF guys?

gdx

Hear That Sucking Sound?

It’s the sound of what ever fools were stupid enough to buy gold and sell stocks because of the impending Crimea referendum.  It is hard to believe there were too many of them, but I guarantee you there were some.  The ultimate herd members I guess.

If you ever hear an analyst talking about gold as a (non financial) crisis hedge or talking about a political event (no matter how inflammatory) as a reason to sell stocks or buy gold do me a favor and mark down the name and refuse to patronize that analysis in the future.

[edit]  And yes, this compels me to look closely at guest posts going forward, with a more critical eye.

It is good that the market is clearing Crimea now and once we get through Ms. Yellen on Wednesday afternoon maybe we can move through the latest bout of stoopid media stuff and get back on the fundamentals, which remain positive for stocks and the economy and thus, not fully formed for gold just yet.

That could all change next week (read: China, copper, etc.) but as of now any funnymentals associated with Ukraine can hopefully be put behind us.  That includes Russia’s minster of media propaganda going on TV talking about the Russian Bear’s ability to turn the US into dust.

How tawdry this whole thing has been.

Gold’s Grinding Message

Precious metals boosters will see gold’s nominal price break upward and probably get excited.  They will marshal the troops for what could one day turn out to be a full fledged tout, as if the 40% decline of the last 2.5 years had never happened.

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But it is gold’s ratios to positively correlated assets that tells the interesting story.  Vs. Crude Oil, the story could be shaping up to be a positive one for the gold mining industry, which is counter cyclical and obviously energy and fuel intensive.

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Gold Ratio Charts Constructive

The gold ratios are looking pretty good by daily charts.  Gold vs. the stock market is okay, same vs. commodities.  Gold vs. base metals?  Well, you just know that one is launching.  Hardly the stuff of a healthy economic growth cycle.  Not a good sign for stocks and possibly a sign of an overdue commodity correction.  Here is gold-oil looking a little peppy.  This one is of particular interest to miners.

gld.uso

NFTRH 281 Out Now

I have not noticed too many gold sector experts talking about certain indicators that are no longer favorable.  Funny how that goes.  It’s short term stuff though, so maybe the idea is to go along and get along.  Don’t ruffle feathers or upset the apple cart.  NFTRH 281 ruffles a few feathers but beyond the near term has significantly higher targets for later in 2014.

There is also some crackhead stuff in here as 6 Semiconductor charts that I find constructive are presented (with targets) in the event that the SOX holds its breakout and the market goes into blow off mode.

In all 34 pages of quality reporting.  NFTRH 281, out now.

nftrh281