Category Archives: Sentiment-Psychology

Armstrong on Time, Price and Gold Manipulation

By Biiwii

Time & Price

“They then form groups and ask for donations to fight manipulators, whom they pretend are perpetual, when in fact, the entire commodity sector is in crisis, no less the deflation that is destroying the economy.”

Since we have been on the subject lately, conjuring Armstrong in Saville’s post and conjuring GATA from my own recent experience (Thing 1 @ Biiwii & Thing 2 @ NFTRH) I thought this post by Marty was interesting.

His negative tone toward gold manipulation propagandists seems to me to be the result of much input from the hard assed end of the gold bug spectrum.  They are like a mafia you know, and they are not open to discussion about opposing views.  That is the fatal gold bug flaw… the surety with which they go about their business.  That is because after all, uncovering the crimes of the evil manipulative interests IS their business.  And business remains good, with lots of customers still buying.

Again, there is manip in all markets.  Why is it so publicized and turned into a cottage industry in gold?  What about all that oil manip?  The Euro is being manip’d right now, today with Draghi talking sweet somethings… in gold the true believers are the marks.  I am a believer in gold.  But not to the extent that I am going to let this monetary asset – with a particular place in an overall portfolio and an overall life – hurt me.  Keep religion, politics and ghost stories out of it!

[edit] In re-reading Armstrong’s quote above I can’t help but wonder if “the deflation that is destroying the economy” (well, it isn’t yet in the US, that must be a projection as exports/manufacturing are the ones suffering as we have shown in breaking down the Payrolls report and finding consumption and services still going great guns under the regime of a strong dollar) is going to be the thing that makes the distortion in this chart finally resolve with negative consequences.

irx and spx

In 2008 we had financial and market manipulation with the employment of ZIRP.  Then we had inflationary manipulations 1, 2 and 3 (QE) along the way.  But the greatest manip of all was the brilliant, evil genius of Operation Twist, which croaked gold (silver and commodities had already blown out earlier in 2011) and painted Goldilocks right into the macro picture.  The Fed’s own word was “sanitize” when it talked about making it look like there was no additional inflation being promoted.  They did this by selling short-term T bonds and buying long-term T bonds (i.e. neutering the bond market).  Voila!  A manipulation so simple as to be child’s play; just sell these bonds and buy those bonds.

But then we realize that the markets are made up of we the many participants (investors, traders, HFT’s, casino patrons, substance abusers and yeh, the algos and black boxes too).  We are (mostly) part of nature and nature always seeks to have balance.  That is why I so often post the ‘distortions’ chart above.  I wonder if the market will slowly come into balance in the form of the deflation – kicked into gear by the Fed’s own Op/Twist 4 years ago – that Marty projects will go on to destroy the economy.  Just riffing here…

GATA’s Ed Steer Has Never Heard of Me…

By Biiwii

From Ed Steer’s latest gold bug infomercial posted at Goldseek…

“Ted Butler’s mid-week commentary got accidentally posted on a website I’ve never heard of——and by an ‘analyst’ that I’ve not heard of either.  I’ve read what he had to say and you can safely ignore it.  Just scroll down to Ted’s commentary as it’s an absolute must read.”

Well Ed, I have heard of you.  You are the Director of the Gold Anti-Trust Action Committee, GATA.  When I was young(er) and impressionable, I actually gave your perma-ghost stories some weight.  Ed, you have never heard of me except for that time when I wrote something bullish about gold and GATA just happened to pick up the story and publish it for the troops.

Also Ed, maybe you do not read so well.  Ted Butler contacted me, and gave permission to reproduce his emails.  I was just doing what I always do, not swallowing perma-conspiratorial b/s and trying to go by what the market tells me to do.  Mr. Butler is respectful and courteous.  You seem to be aloof and ego bound.

Reference two posts of mine trying to figure out the bearish silver and gold CoT reports last week.  I had been warning of the bearish formations since well before the big drops in the metals.  Were you warning your readers sir?  Does it really matter how the CoT got so bearish when the end result is the same?  This is not a battle of good vs. evil, it is the financial market.

Who Exactly Are the Goons Gathered Against Silver and Gold in the CoT Alignment

More on the Silver and Gold CoT, w/ Ted Butler’s Comments

Oh and Ed, I suspect that while you profess to have never heard of me, you may subconsciously associate my name with some items from the past, including…

Scary Gold Bug Article on Cue

GATA posted a laundry list of gold bug heroes moments after the Fed punted on tapering QE.  That was September of 2013.  The gold “community” thumped its chest, was summarily mowed down (again) and it was all so predictable.  It is no wonder that so many of the troops now stand in line with Martin Armstrong.

I already know the script Ed.  Gold is going to enter a big bull market and you are going to be a poster boy, thumping loudly as the evil interests are vanquished.  But what I have been concerned with was the inconvenient 4 years (to date) of bear market that had to be dealt with.  You blamed criminals and I said ‘okay, maybe, maybe not… but we should not get caught up in the cross fire’.

People who understand the long-term value of gold as a monetary asset don’t tend to worry about manipulation anyway.

Sentiment Viewed Another Way, Small Caps

By Biiwii

A feature of the current sentiment backdrop is that people seem to be looking for market indicators (reasons) to be bullish as opposed to bearish.  I mean, if you watch this site you know how keyed I am on the Semiconductors, as they were a post-2012 market leader.  They led into the August correction and led right back out of it.  Yey, everybody’s bullish on the Semi’s!  Woo hoo!!

But why are we not hearing about another post-2012 leader, the Small Caps?

Here is the weekly view of IWM.  Why is the rebuilt bull backbone not factoring this?

iwm weekly chart, small caps

Sentimental Pictures

By Biiwii

Let’s look at some pictures of what was formerly a totally bombed out market sentiment backdrop.

From Market Harmonics a look at RYDEX fund sentiment, fully recovered from the August freak show.  Notice how volatility has expanded since Central Banks started becoming more aggressively intertwined with markets since 2011?  Hmm?

rydex, market sentiment

From Doctor Ed by way of Investors Intelligence, a look at the II (newsletter writer sentiment) as of October 20, a couple days before Amazon, Alphabet and Mr. Softie launched the good times, good feelings and presumably the need for the newsletter boyz to adjust to being ‘right’ with the market.  As we noted in #366 this week the bulls were recovering nicely but the bears got a little too eager too soon, holding the ratio down.

Continue reading Sentimental Pictures

Market Sentiment Reset

By Biiwii

First headline I saw at Marketwatch this morning:  Why a fanatical run higher may be shaping up for stocks

First headline I saw at CNBC this morning:  Fear of ‘missing out’ will drive markets: Technician (click image for article and video)…

cnbc, stock market rally... market sentiment reset

[edit] The guy in the video is actually rational and echoes my thoughts on Biotech at the time of the liquidation.  The lady is a little more crackish; another chartist heard from…

NFTRH 365 Market Sentiment Bottom Line:

“Folks, the over bearish backdrop that was a big concern for bears not even a month ago is being eliminated.  The stock market bounce is doing its job.  While SPX continues to target the 2020 to 2060 range (with an outlier possibility for 2100 +/-) the backdrop is now one of rising risk to the sentiment bounce rally.”

Here is but one of the indicators we used to support the above, Sentimentrader‘s Smart/Dumb money data graph.  If you look closely, you’ll see that aggregated dumb money has aped the bottom and bounce in the S&P 500.  Now we are poking up into the target range with the media telling newly greedy investors what they want to hear again.  Well, they were doing that in August in September as well, but investors wanted to be fearful back then.  Not so now.  The bounce is doing its job.

market sentiment, smart money and dumb money

Tinder Box

By Biiwii

tinder box to ignite stock market sentiment rally?We have been using the Tinder Box theme in NFTRH lately.  As in, stock market sentiment is so bleak, so depressed as to be a Tinder Box with the elements to ignite a flame that bounces the market, to clear the over bearishness at least.

We  have successfully followed a plan every step of the way… 1. down from the August breakdown, 2. up on the bounce to SPX 1975 or 2040 (hit 2020) and now 3. down to a test of the October 2014 / August 2015 lows, which is a decision point between a bounce or an entry into a bear market (by making a lower low to October 2014).

We arrive here amid an over bearish sentiment backdrop that is all out of whack with what has actually just been a twitch by the market in the big picture (with bull parameters still intact).  So whether this is the bounce, as it seems to be – and we are getting some follow through despite the volatility – or it comes from a lower level, it is going to happen.

There were the small speculators way too short the market and Investors Intelligence data showing newsletter writers having totally abandoned the trend they rode for eons (well, since 2011 anyway).  They are now advising extreme bearishness to subscribers.  Here’s the latest graphic on that, courtesy of Doctor Ed and the Daily Shot.

Continue reading Tinder Box

Market Sentiment Update

By Biiwii

In the last 2 NFTRH editions, we noted extremely over bearish market sentiment conditions in Rydex bull/bear fund allocations and in Small Speculators’ net short positions. These sentiment indicators have been reset to traditional correction-ending, even bear market-ending levels.  That’s the reality.

The latter especially, has been a reliable contrary indicator.  Basically, the Small Specs have never been right at important market turns.  For instance, they were heavily net short in the late 1990’s but by the time the market topped in 2000, they had covered and become net long.  They have reliably been a contrary indicator all along the current bull market as well, going net short at each correction bottom, post 2009.

Add to this the Newsletter writer community, which has a vested interest in trend following and always looking right with the market.  The latest Investors Intelligence data by way of Pension Partners and the Daily Shot email service shows that NL writers have quickly gotten right with the bear, and the fear.

investors intelligence, market sentiment

Another indicator is the NAAIM Investment Managers data.  These managers sell down toward 70% to 100% cash at every market bottom.  They are now at around 75% cash.

naaim, market sentiment

Of course, market sentiment is market sentiment, economic fundamentals are economic fundamentals, monetary policy is monetary policy and global pressures are what they are.

In other words, sentiment is a condition, not the be-all, end-all director in any short-term period.  Just as the market floated for years with over bullish Investors Intelligence data for instance, the over bearish data now in play is a condition to future bullish events, but not necessarily a fine timing tool.

The Bear Market Everyone Saw Coming

By Biiwii

The title lets you know where this article is going.  For such a routine correction in the US stock market, the Psych/Sentiment backdrop has gotten way out of whack.  Do some analysis on Rydex Bull/Bear fund allocations among investors and you will find a historic knee jerk reaction into bear funds over bull funds (by those who still use Rydex funds).

Go do a Google Trends search on ‘stock market crash’ or ‘bear market’ and you get the following results, showing a big rise in interest among the public.

Market sentiment: stock market crash

Market sentiment: bear market

Continue reading The Bear Market Everyone Saw Coming

Man, That’s Cheesy…

By Biiwii

[edit] I actually agree with Sinclair’s views on monetary sociopaths.  Beyond that and certain dogma that rings true, it’s too much information the likes of which has frightened people into what have been incorrect positions for years.

After the now-famous WSJ post, it seemed as if a bottom had just been called in gold…

Let’s Be Honest About Gold: It’s a Pet Rock

It seemed that the elements were in place for a contrarian rally if not bull market bottom.  Along with negative gold items routinely appearing in the financial media and a Commitment of Traders structure that had become very bullish, gold sentiment was bleak by indicators we track in NFTRH.

My how a 6% rally with an accompanying stock market down spike have changed things…

sinclair, gold sentiment still not ready
Click for the video @ YouTube

Here is the article associated with the video, sent to me yesterday…

Plunge Protection Team Losing Control of Markets -Jim Sinclair

I won’t even go into Sinclair and his ‘same old, same old’ spiel, trotted out the minute the stock market cracked.  Let’s just focus on one micro element of a case that implies gold bug sentiment is not yet where it needs to be for a real bullish stance.  From the article’s comments section…

Steve (website visitor):  “I used to believe in the rampant manipulation of the gold markets until i got proper information and grew up. If Gold is always manipulated to the downside, why buy it?”

Greg Hunter (website host):  “Steve you grew up to be an idiot. I got “proper information” from Dr Paul Craig Roberts* who laid out an analytical case for gold manipulation.”

It’s concerning if you are a gold bug, because the bear has apparently not dug deep enough into all the bunkers to devour the most ardent holdouts.

  • Above we have “Dr Paul Craig Roberts”.  From NFTRH 355 (very coincidentally I was reminded of this by a subscriber this morning):

Have you noticed that the bear and/or gold communities tend to make sure they call John Hussman “Doctor Hussman”, Jim Willie “Doctor Willie”, Robert McHugh “Doctor McHugh”, Chris Martenson “Doctor Martenson” and any other Ph.D. writing about markets “Doctor”, while conveniently forgetting to label the likes of “Doctor Bernanke” as such (“Helicopter Ben”)?

I don’t know about you, but when I am reading articles and I see a writer labeling someone with whom he or she agrees (and with whom they want you to agree) “Doctor” in order to convince the reader of the material’s seriousness or worthiness I think “man, that’s cheesy”.