Tag Archives: Stock Market

Big Pictures: Stocks, Gold and the Miners

Ukraine war hype, China demand drop, GOFO mysteries… these are the short term noise inputs on the gold sector.

US Treasury bond yield spreads, gold vs. commodities (i.e. the ‘real’ price of gold), gold vs. the stock market… these are some of the fundamental considerations that actually matter and they have taken a hit since January.

It is easy to say ‘I am bullish in the big picture’ (measured in years) but it is not so easy to actively manage in the smaller pictures (measured in days, weeks and months) with all of the above noise inputs and more bombarding the poor individual player.

We use shorter term charts to manage the shorter time frames.  Daily charts have most recently indicated a bearish set up as bear flags formed across the precious metals complex (with the exception of silver, which never got going to begin with) last week.  Weekly charts continue to indicate that an extended and oh so grinding bottom may be forming, but that includes the potential for ups and downs, also known as volatility.

There is also a lot of noise lately in the stock market.  The US stock bull celebrated its 5th birthday last month.  The last 2 cycles (the manic phase of the secular bull ended 2000 and the cyclical bull ended 2007) were each approximately 5 years long.  Today let’s retreat to the calm of the long term monthly charts and get a snapshot of the big picture.

The S&P 500 has a measured target of around 2190 that we have had open as a possibility since the big breakout occurred in early 2013.  A measured target is just that, a measurement; simple math.  It is not a directive and therefore 2190 is not hype, it is just a possibility.

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2014: State of the US Markets

What better day than today’s predictable hard bounce to present the other side?  If you believe the bounce and want to be a happy bull, just step along from this post.  If you don’t mind considering other opinions or are like me in thinking 2014 stands a better than even chance of being the year that the current cycle ends, check out EWI’s 24 page report by clicking one of the graphics below.

We have come to a point in this cycle where we are supposed to feel ashamed for having bearish views or opinions.  Prechter’s wrong again after all.  The thing is, even a bull could use some alternate opinions.  I am not talking about a market crash.  Please.  I am talking about a macro view.  That should be someone’s basis for operation.  I have my views and they have not changed since early last decade because the things I had negative views about have not only not changed, they have intensified and shifted (commercial credit replaced by official credit).  But there is still a debit waiting out there.

We who hold a negative big picture macro view were stupid until the 2008 liquidation made us geniuses.  Now we are stupid again and trend followers are smart.  Wash, rinse, repeat.  EWI is an affiliate and I make a commission on sign ups to their services.  So consider this a promo.  Also consider that EWI was founded by someone who was an influence of mine.  So it’s not just a pitch.  We’ve only recently gotten with the idea of partially funding all the free information here with ads, like most blogs have routinely done all along.  Consider this an ad that I wholeheartedly recommend.  And the darned thing is free for crying out loud.

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Stock Market Notes

  • Covered a short position against leveraged NDX bear ETF QID (sort of a hyper long position) and am going to take profits on triple long TQQQ too.  I may keep a couple other specs for a little longer, but the market is already bouncing toward points that satisfy a ‘relief bounce’.
  • I am well aware of the merger uproar surrounding Osisko and M&A seems like a bigger picture positive for the gold miners with Yamana and Agnico Eagle going tooth and nail with Goldcorp over this Quebec mine.
  • Until the precious metals start fixing their daily charts and I see something other than GOFO mysteries on the macro fundas… I’ll watch for now.  But M&A is a funda too.
  • Time to have nice steady heart rate and evaluate bear positioning again on the stock market.

A Good Article @ MarketWatch

I know I rag on these guys quite a bit, but this is an article well worth your while.

Be wary when you hear ‘this is the big stock crash’

I not only agree with the title, but also his representation of perma bears (and going the other way I might add, perma bulls) seeking to cash in to guruhood by making THE call.  The kind that Richard Russell still lives off of today.

Anyway he goes on to some pretty good technical analysis focused on the relatively week [dohhh, weak] Nasdaq and comes up with similar conclusions to the near term and reservations on the intermediate term that I carry.  I don’t think I like the article because he agrees with me; at least I hope not.  It’s more because I think it’s level headed and thought out, unlike so much of the crap out here on the internet these days.

 

COMPounding Stock Market Signals

[edit.1]  And in consideration of the relative clarity of indexes vs. individual stocks, I am going to focus trading on index ETFs, especially leveraged ones.  Long, short, any sector – including the precious metals.  Trader’s market and all.

[edit.2]  With the media serving up the Ukraine relief pap and some volume coming in, it is possible that said bounce may have begun.  We’ll see.  I shorted QID and bought a triple long on the QQQ.

Signals continue to gather that a top of some significance is forming.  Bull market top?  Undetermined.  But with the COMPQ (and also the NDX) making lower lows expect a couple things.

  1. A new bounce attempt that could be ferocious and
  2. Failure, with new lows down the road

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Signals like this lower low, even if neutralized as I expect it will be, tend to be shots across the bow for a later date.  So, my little bounce scenario played out in just 2 days (I am full sidelines now on any longs), showing just how weak this market is.  But that may not have been the bounce.  A fierce rally could be implied (as lots of things come to their 200 day moving averages) but the odds just increased that said bounce would ultimately fail.

One does not have to try too hard to visualize a left shoulder, a big fat head and a hard bounce that peters out around the 50 day moving averages.  A drive to 4200 could involve a lot of relief and renewed optimism.  People should remain at a steady heart rate if that goes on.