It is more important than usual to be fine tuned on exactly why the gold sector, rising as it is with the general ‘anti-USD’ trade, is different.
We go into detail with analysis that may not flow as easy as the “China love trade”, ‘Gold to 5000 due to hyperinflation’ and ‘Gold to sky rocket as institutional money panics about inflation due to strong employment’ stuff you see out there. But we are not about easy, we are about right.
Also, #343 covers all the other usual macro market aspects.
Manufacturing Up, Pollution Down: How?–Conversable Economist[biiwii comment: economists being economists, he talks about regulation as the reason. having lived the industry for many years i’d say yes, most definitely. regulations steadily marched stricter and stricter and that is a good thing (i’ve seen companies totally disregard the environment and human health). but don’t discount the degree to which automation has played into this as well. progress is progress after all.]
A strange situation in Copper sees the metal sagging and the miners popping. The metal has been on a rally that we have been tracking all year (easy now, there is huge long-term resistance above, not shown on this daily chart) but has sagged for the last month. The miners on the other hand, have risen over that period.
Conclusion? I don’t have one. Just pointing out a weird situation. Maybe Copper was a barometer to the present USD weakness and now the various touts, pumpers and carnival barkers across the commodity spectrum are doing their thing. It’s easier to buy the miners after all, than the metal. That stuff is heavy!
The very term “Resource Sector” is something that bothered me going back to the ‘inflation bull’ market of 2003-2008. Back then I used to grouse about the gold is silver is copper is tin is oil is hogs crowd always lumping ‘resources’ together as if they are anywhere near the same thing. They are not; they are vastly different, with most ‘resources’ being economically cyclical while gold is counter cyclical.
Sure, sometimes when the inflation tout is going good it all goes up. But there is no resources sector as a discrete and unified asset class. So my conclusion was that anyone pitching “the metals” as many used to often do (gold and industrial metals all in the same analysis) is either just lazy or a ‘resource sector’ pitch man or woman. There were tons of ’em in 2003-2008.
Anyway, on to Casey here…
L: Well, Doug, we’ve seen another quarter of high volatility and significant world events. What strikes you as most important at present?
Doug: Everything is still held together with chewing gum and baling wire, for which I’m grateful, considering what’s coming. It’s very clear to me that the global economy is in very much the same space as it was in 2007—in other words, on the edge of a precipice.
So buy resources! Wasn’t that a solution from many corners of the fear trade into the 2008 top when resources of all kinds eventually crashed as bad or worse than the stock market?
Well, I just wrote 42 pages. I’m spent, so no big promo. I am personally enjoying the market for what it gives and having a good year so far. In that existing trends have not changed yet, the real fun however, begins at some future point.
332 is a good one. They all have been lately in my opinion. I know that because each week doing the work in these reports (and in-week updates) helps orient me and keep me cross-referenced and double checked in my own assumptions.
Frankly, I feel as though I am seeing the markets well this year. It’s sort of like conducting an orchestra and having all pieces playing to perfection. While patience is a key word, markets are moving along and making wonderful sense. To boot, even individual stock charts are working well and more often than not doing what I want them to do. Go figure.
The market manager side of me (as opposed to the idealist human side) is in control and pleased with how things are going. This manager does not care what the market does as long as we are on the right side of it. The idealist may need to find a hobby for a while.
NFTRH 332 carries the narrative up to today. It’s out now and you should check it out with an affordable subscription. I realize that everything on the internet is supposed to be free, but you know you ultimately get what you don’t pay for. We’re talking less than 4 Fidelity trade commissions a month for a weekly report and multiple updates.
One winning trade or avoided loss can pay for 5 or 10 yearly subscriptions (depending on trade size of course). When it comes time to manage the next macro turn? That could be a life changer. That’s what 2008 was after all. NFTRH will be there.
Long winded promo, every word of which I believe in and stand behind, ends now.
This week NFTRH moves further from the lunatic fringe and into conventional market analysis with lots of talk about relative global stock valuations, using P/E ratios and currency movements as the talking points.
We also break down the latest Semiconductor Book-to-Bill and illustrate why the precious metals are still not ready.
Also, there is a sentiment issue cropping up in US stock markets, even as indexes made big bullish signals. A wonderfully complex and interesting market backdrop folks. Make sure you’re on top of it.
Also, for reference here is the larger version of a graphic included in #331. Due to formatting it was not overly clear in the report. Click image for full size.
330 does some opinion making on gold sector perceptions and then buttons down to some interesting market analysis covering the usual suspects; US and global stock markets, commodities, precious metals, currencies, indicators and sentiment. Good stuff.
Posting here and at NFTRH.com will be light in the first half of the week as it is school vacation and the kids are going to get some daddy time, whether they like it or not!