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.

Hey, Did You Know…?

Psst… hey, did you know that US stocks snapped a win streak on violent Greek protests?  Hmmm, well did ya?

That’s what MarketWatch’s front page headline is declaring after the close.

How about this alternate headline?

US stocks snap win streak on slightly over bought, post-hype recovery momentum; market experts say it is a normal process for a slightly over bought market

Doesn’t have quite the same panache, does it?

The article also features Janet Yellen’s mug and this…

“Yellen seems very committed to raising rates and is doing everything she can to lessen the blow,” said Randy Frederick, managing director of trading and derivatives at the Schwab Center for Financial Research, in a telephone interview.

This age of transparency (i.e. Jawbones on parade) is a boon for the mainstream media, who eat up everything they utter and feed it out there as if it is news.  Just last week some Jawbone was talking rates into 2016.  The volatility that ensues does nobody any good other than the MSM, as it chases market sentiment around on a daily basis.

Meanwhile, Intel beats and Netflix sky’s on earnings.  Too funny.  But wait, there’s still those violent Greek protests to deal with.  Ha ha ha…

[edit]  Oh and INTC’s beat does nothing to hurt our boring headline from yesterday, does it?

Semiconductor Leadership; Intact

 

Dollar’s Grand Masterpiece…

By Alhambra Investment Partners

The ‘Dollar’s’ Grand Masterpiece Almost In Full View

When US retail sales jumped in May on seasonal adjustments alone, economists and mainstream commentary lost all composure as they were certain that meant the “slump” was over and the dominant narrative would continue. The same occurred in Europe over a slight pickup in overall lending, not even in the household or business sectors, which was proclaimed as nothing but the beneficence of QE already working. Neither of those “certainties” lasted more than a month, as US retail sales in June were “shocking” and lending in Europe quickly fell back to its normal flatline (which the ECB has really not been able to affect through its entire five years of deep experimentation).

This is nothing new, of course, as every uptrend is extrapolated into the recovery while at the same time every bit of weakness is qualified “temporary” or “anomalous.” The result over time is the regular saw-toothed monthly variation steadily sinking on that “unexpected” but somehow persisting downtrend. If you don’t observe the overall context beyond those shortest variations you might actually expect a domestic or global recovery intact.

Continue reading Dollar’s Grand Masterpiece…

Market Management; Remember DDD?

By Biiwii

Yesterday I made a post about the Semiconductor sector’s technical market leadership.  There are other considerations as well, not least of which is my own background in manufacturing and in particular, the state of the Semi Equipment segment within the general Semi sector.  I am not trying to hype anything, I am trying to be logical and if the technical and fundamental aspects marry up, there will be a trade here.

The technicals show that leadership is still in its trend channel per the link above.  They also show a nominal SOX index that dropped hard to around a point where those fundamentally bullish would at least start buying.  We have previous history (up to May) showing very strong Equipment sector bookings and we await new data to be released later this month.

In managing markets, you have got to have themes in play, plans extrapolated from those themes and above all else, an inclination to admit when you are wrong and revise those plans.  For now, we are on a Semi plan.

One plan that never needed a revision was the ‘Wall Street and associated media were printing up a big plastic model of HYPE for investors to suck on’ that I harped upon continually.  This site, due to my manufacturing background and familiarity with 3D Printing and Citron Research with a 3D Systems-specific bear view were the only places I can recall that called this promotion a scam at the heights of the bull frenzy.

3D Printing; no Barrier to Future Losses for Investors

ddd

Stratasys is the ‘best of breed’ in the sector and it too has been destroyed from the bad old days when the promotion was running full steam.  The stock market is higher than it was in February of 2014 and yet this entire sector sought out its true value just as the best laid plan thought it would.

My point is not to chirp and harp (well, maybe a little) but rather to continue to expose the b/s that runs 24/7 in this casino.  In October 2014 we had a hysteria in the Semiconductor sector centered around some stupid comments by the CEO of Microchip Semi.  He issued a PR talking about soft forward business and then the media popped its load falling all over itself spreading the grim news about the view of this key ‘canary in a coal mine’ company (hint: a better ‘canary’ is actually the Equipment group, which supplies the chip makers).

The point?  Hype is everywhere *, in the micro (company-specific like Microchip Semi; no pun intended), the macro (Yellen now blabbing about rate hikes still to take place in 2015 after some doofus at the Fed used the little blip of a correction last week to talk about pushing rates out to 2016) and it comes in positive and negative form.

One day when there is no longer a Biiwii.com (which will probably mean there is no longer a me) I want people to simply remember it as a source that hated hype above all else.

Okay, market’s opening and I’ve got to go manage it (which hopefully means doing nothing if I am properly positioned).  :-)

* I forgot to include the greatest hype of all time, from Stratasys and 3D Systems, some absolute gems talking about printing football cleats (during the run up to the super bowl) and Hershey’s treats.  Unbelievable. 

Semiconductor Sector Leadership; Intact

By Biiwii

In NFTRH 351 we had an extensive look at the Semi sector including its nominal technicals, its market leadership status and a potential setup that could be in play if my read on its fundamentals proves out.  FWIW, here is the status of the Semiconductor sector’s leadership.

Since Q4 2012 SOX has led the S&P 500, which makes sense since Q1 2013 was when we became alerted to the Semi Equipment sector’s ramp up (which in turn was an early economic signal).  3 times since the circus last October centered around Microchip Semi’s outlook brain fart SOX’ leadership became over done and now the question is, has it been over done to the downside yet again?

All trends end sometime, but as of now this one is completely intact.

sox.spx

Treasury Has Problems…

By Alhambra Investment Partners

Treasury Has Problems With Computers, But Huge Bubbles Are Beyond Any Scope

The US Treasury Dept. released its awaited report on October 15 today. I started to read through its 72 pages but it became clear rather quickly this wasn’t anything but, frankly, junk. The ultimate message is simply one of “computers.” In other words, there is no discussion, apart from simple bland references here and there, about what really transpired on October 15, just some mechanical issues that might have played a role in the specific events of that morning. There is really no attempt to discuss why UST’s were bid so heavily in the first place, only what that sustained bid did once it hit the “market.”

Bloomberg’s summary was perhaps the best on that account:

Continue reading Treasury Has Problems…

Bulletin: It’s a Credit Bubble!

By Biiwii

As posted at NFTRH.com

You may have caught the title’s little inside joke.

Sometimes you (well, I anyway) can look at a graph representing data that is a culmination of history (i.e. reality) and just let it settle in for some perspective and even some conclusions.

Whether these conclusions are right or wrong is subjective and open to debate. But what I see here when viewing the Prime Rate historical is summed up after the graph (graphs courtesy of Economagic, mark ups mine).

prime.loan

In the pre-Greenspan era, every rise in Prime rates was eventually corrected through recession. This makes sense as the Federal reserve would, through its Funds Rate, make borrowing by banks more expensive during economic up cycles and hence, this was passed on to the borrowing public by the spread between FFR and Prime.

Continue reading Bulletin: It’s a Credit Bubble!