China’s ‘TIC’ for May…

By Alhambra Investment Partners

TIC For May Is Really What Is Missing About China

The latest update for TIC “flow”, for the month of May, was mostly what was expected given the “dollar pause” at that time. Central banks were still active but not nearly as engaged as they had been through the worst parts of the “dollar” crisis in late 2014 and early 2015. Official accounts (central banks and foreign governments) had turned positive in May for the first time since November, and even treasury mobilizations had dropped considerably.

This is not to say that all was decent and good about the “dollar” in May, only that it wasn’t nearly so vibrantly depressing. Given the activities in July, we may find out through TIC a few months down the road that this was the proverbial eye of the hurricane.

ABOOK July 2015 TIC Official UST Continue reading China’s ‘TIC’ for May…

Proper Seasonal Gold Chart

By Michael Ashton

In an excellent (and free!) daily email I receive, the Daily Shot, I ran across a chart that touched off my quant BS alert.

goldseas

This chart is from here, and is obviously a few years out-of-date, but that isn’t the problem. The problem is that the chart suggests that gold prices rise 5.5% every year. If you buy gold in January, at an index value of 100, and hold it through the flat part of January-June, then you reap the 5% rally in the second half of the year.

Continue reading Proper Seasonal Gold Chart

A Common Currency is Not a Problem

By Steve Saville

A popular view these days is that the euro is a failed experiment because economically and/or politically disparate countries cannot share a currency without eventually bringing on a major crisis. Another way of expressing this conventional wisdom is: a monetary union (a common currency) cannot work without a fiscal union (a common government). This is unadulterated hogwash. Many different countries in completely different parts of the world were able to successfully share the same money for centuries. The money was called gold.

Continue reading A Common Currency is Not a Problem

Market Bubble in Trouble?

By Elliott Wave International

Our new, FREE report shows you specific areas of the U.S. stock market that have become dangerously frothy

When I was in college, I had this weekly ritual. I’d drive home to my parents’ house every Friday, run inside to say hello, grab some food, and leave several bags of dirty laundry to be picked up the next morning.

One Friday during my sophomore year, though, the music stopped. I set out on my usual “drop and dash,” returning the next day to find my bags of laundry unopened. And there, attached to the washer and dryer, my father had installed token machines. Each token represented a different favor: Cook dinner, clean house, carry on an adult conversation that doesn’t include the words “like” or “dude.”

Continue reading Market Bubble in Trouble?

Semi’s Updated

By Biiwii

As we await the Semiconductor Equipment sector’s Book-to-Bill data for June, we observe that Semiconductor sector leadership (SOX-SPX) is still intact in the US stock market.

sox.spx

This sector is noteworthy because it was a real indicator in early 2013 of the general strength to come in manufacturing (Semi Equipment cycles often do that) and later, employment and the ‘services’ economy.

Today SOX-SPX rests at a decision point and the bulls have the ball as long as that point is not violated.  The answer here will be especially important given that its 2013 indicator running mate, Palladium-Gold, is very bearish now.

pall.gold

More MSM & Gold

By Biiwii

Today’s entry in the wrong headed gold obsession sweepstakes is…

4 reasons gold got caught in a perfect storm –MarketWatch

They even have a picture of a golden girl in a tiny little bikini bottom.  Okay, so MSM are not all bad I guess.

Gold is suffering a major meltdown. Prices for the yellow metal have dropped to their lowest level in more than five years, and the downdraft didn’t relent Monday, with futures recording an eighth straight session of losses.

The Chief market strategist at something called CMC Markets (what’s his middle name, Michael, Matthew… Milton?) is trotted out to tell us why gold sucks so much.

Over the past week, “a number of events and trends have come together to create what looks like a perfect storm for gold,” said Colin Cieszynski, chief market strategist at CMC Markets.

He listed 4 significant influences:

1). Reduced demand for defensive havens
The “risk of an imminent Grexit has passed for now,” and political tensions around the world also appear to be easing with the completion of the Iran deal and the U.S. “reopening diplomatic relations with Cuba,” said Cieszynski.

The usual reasons for the public to believe; Straw Men, all.  Just picture gold bugs clinging to their stupid metal and when Iran finally got done, they puked it up.  I criticize some gold bugs but on average, monetarily speaking, the real ones make the average market participant look like a casino patron and little more.  Any dumb rationalization will do as to why a market does what it does, for the average casual participant.  Say what you want about gold bugs, but they are most definitely not casual.

2). Reduced need for inflation hedges
With Iran preparing to return to the oil market amid a continuing supply war among other producers, the price of oil has tumbled back toward $50 a barrel. That means “headline inflation looks likely to remain subdued for some time,” Cieszynski said.

Oh my gawd, did he really say that?  Do not fear Uncle Buck, dear gold bugs.  In the best investment (gold mining) scenario Unc and Gold can each be firm.  Go ask Bob Hoye, he’ll tell you why.  The macro funda are incomplete as of 7:01 US Eastern time on Tuesday July 21.  That is because inflation is still in play as stock markets benefit.  It is when the inflation fails that the macro is going to turn.

3). U.S. interest-rate liftoff and U.S. dollar rally
The risk of financial crises in Europe and concerns that China could spiral out of control and disrupt the world economy have eased dramatically, “keeping the Fed on course toward interest-rate liftoff.”

That is a consideration, and I think gold is pricing in tighter monetary policy at this time.

4). China and gold purchases.
China on Friday released data on its gold holdings for the first time since 2009. Gold reserves rose by about 60% from 2009 to 1,658 metric tons, which would have been great for gold, “except that gold only represents about 1.5% of China’s forex reserves and this percentage has not grown in the last six years, crushing hopes China would save the gold market,” said Cieszynski.

Enough with the China demand crap.  It was worth ignoring when it promoted by perma bulls and it is worth ignoring now as a bearish fundamental.  For every seller there is a buyer.  Anyone who was buying the China/India “Love Trade” bullshit that has been churned out there through the bear market got exactly what they deserved and learned a great lesson.  That has value.

MSM Working Gold Hard

By Biiwii

MSM mainly reflect back to us the ‘news’, what is or has happened.  MSM, especially MSfM, never give the straight scoop ahead of time when it is actionable.  Anyway, gold is down big this morning (partially recovered) and it’s pig pile time in the financial media.

This screen shot is taken from the Live Gold & Silver page of the much improved Live Charting menu above.  Very nice tools there now for all markets (more may be added).

gold

For its part, here is MarketWatch chiming in to help investors realize that gold could keep on crashing.

This is what could keep gold crashing

Clearly, the precious metal hasn’t been helped by Friday’s news that China isn’t holding as much gold as originally thought and by signs the Fed will go ahead with an interest-rate hike. But ponder this question from WSJ’s Jason Zweig, posed in a commentary as gold settled at five-year lows Friday (and kept falling Monday): “So why, even as Greece has defaulted, the euro has sunk against the dollar, and the Chinese stock market has stumbled, has gold been sitting there like a pet rock?”

This Zweig thing seems to be everywhere.  Viral.  Some guy putting out a contrary indicator media piece years after it would have been useful and it is viral?  Well, in the opening segment in this week’s report we addressed this before moving on to the analysis.

Let’s Talk About Gold

“From a contrarian’s perspective, this is the kind of stuff that is going to help empty the still over-bullish side of the boat (after it capsizes) and temporarily break the gold obsession that is hard wired into so many people (it’s just a pet rock, after all). Here we have to remember that when the MSM trumpets, it is selling headlines. Who buys the headlines? The public. Who is always wrong at important turning points? The public.”

Check out the whole segment linked above.

NFTRH 352 Out Now

By Biiwii

We have had the pulse of the precious metals every step of the way.  We have mostly stayed on the right side of stock markets too.  We have indicators and we have proprietary economic information that most are not watching .  We have common sense and a pretty darned excellent market report this week.

NFTRH 352, out now.

nftrh352

Post-CPI

By Michael Ashton

Below is a summary of my post-CPI tweets. You can (and should!) follow me @inflation_guy or sign up for email updates to my occasional articles here. Investors with interests in this area be sure to stop by Enduring Investments.

  • Core CPI +0.18%, y/y rises to 1.77%. Pretty much as-expected on the headline figures.
  • Was some market concern about a possible higher print following PPI, but there isn’t much correlation.
  • Note that the next two months of CPI will ‘drop off’ an 0.10% and an 0.05%, so we should get to 2% on core inflation by mid-September.
  • Of course the Fed’s target is ~2.25% on core CPI (since they tgt core PCE) so Fed can argue it’s still below tgt. Uptrend may concern.
  • Housing inflation on the other hand going to the moon
  • This is great chart and it’s the reason core never had a chance of entering deflation territory. & will go up. (retweeted Matthew B)

oer Continue reading Post-CPI

Precious Metals Extremis?

By Biiwii

The precious metals, which happen to be my anticipated next big macro (long) trade have been bearish since HUI lost 460 for the last time back in oh, what, 2012?  And that was being lenient.  Not being a cycles guy, I was not able to time the top.  I merely observed support parameters and informed NFTRH subscribers of technical violations first, and early eLetter readers subsequently as well (the eLetter was launched after the bear market began).

So now here we are, with the precious metals doing what they usually do when looking to end a bear phase; they are becoming extreme, as in waterfalling…

gdx

There is a solid contingent of analysts and writers now bearish on the precious metals.  There are also the perma-pom poms and idiotic hallucinations like the “drop dead gorgeous bull wedge” on GDX above (it failed as expected about 15% ago).  There have still been too many of these guys out there, obsessing on the precious metals every step of the way calling play-by-play for transfixed gold bugs.

Anyway, what there also is is an HUI target from 2012/2013 of around 100, based on the old monthly H&S top.

hui.mo

This is cross referenced with a gross looking pattern on the weekly chart.  Below is the blown up view of a more detailed chart, showing the pattern.  Here’s the NFTRH 351 excerpt that went with it…

Below we blow up the above chart (no pun intended) to show the breakdown.  The little pattern measures roughly 210-150 = 60; 160 (breakdown point)-60 = 100.

 What I find interesting here is that for years now, the big H&S top on the monthly chart has had a target of 100 (+/-).  While nothing in TA is set in stone (it’s an art based on probabilities, not a science), confluence adds to the probabilities.  The weekly and monthly charts each have independent patterns indicating the same general target.

hui.wk

For years now the sector has been bearish, but at the same time, being a macro trend trader (i.e. my desired mode is not this daily and weekly trading I have had to do in the mature stock market bull, it is to try to anticipate a big new trend or macro theme and be positioned for it) I am thinking like a predator or hunter, as has been advised in NFTRH.

In a situation like this, all you can do is have patience and your best laid targets and plans.  I hold exactly 5 junior miners (as of this writing), all of which have charts that are vastly better than HUI and GDX (and GDXJ for that matter) above.  I also have been shorting NUGT and holding JDST for full protection against what has been an uninterrupted bearish technical view and an incomplete macro fundamental view.

I know that NFTRH subscribers are prepared and hope that eLetter readers and website readers are prepared as well to the extent they have been able to read gain information and between the lines.

While I have conflicts going on (like the still <barely> intact Semiconductor market leadership vs. the deplorably bearish looking Palladium-Gold ratio) I think we are heading into Extremis, Q4 2008 style.  Timing?  Not sure.  Only regular work will help tell that story.  A short-term bottom could come about in the PM complex at any moment, before THE bottom.  However, THE bottom could come sooner rather than later if that waterfall continues to spill.

Regardless, whether it is measured in hours, days, weeks or even months still, it is time for the real gold bugs (the ones who long ago tuned out the cartoon characters the sector holds aloft) to be ready to act.

Biotech Index Updated

By Biiwii

Well, what can we say?   The market is the market and it is what it is.  We have to go with its signals.  Here’s how NFTRH 351 concluded the US Stock Market segment on Sunday…

Let’s close the segment with a look at the Biotech index.  The daily chart pattern still has a sneaky bullish look to it.  If it gets above 4200 the bullish look would be more than sneaky, it could indicate a return of speculation and eventually, momentum to the US market.  A failure of the 50 day averages, as BTK very temporarily did last week, would turn this thing bearish quickly.

Here’s the chart that was associated with the above (now updated obviously)…

btk

Bullish it is.  Really bullish as of now.