• 288 days Will The ECB Continue To Hike Rates?
  • 288 days Forbes: Aramco Remains Largest Company In The Middle East
  • 290 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 690 days Could Crypto Overtake Traditional Investment?
  • 694 days Americans Still Quitting Jobs At Record Pace
  • 696 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 699 days Is The Dollar Too Strong?
  • 700 days Big Tech Disappoints Investors on Earnings Calls
  • 701 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 702 days China Is Quietly Trying To Distance Itself From Russia
  • 703 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 706 days Crypto Investors Won Big In 2021
  • 707 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 708 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 710 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 710 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 713 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 714 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 714 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 716 days Are NFTs About To Take Over Gaming?
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

Trade In Counterfeit Goods Hits Half A Trillion Dollars

Trade In Counterfeit Goods Hits Half A Trillion Dollars

The counterfeit market has breached…

  1. Home
  2. Markets
  3. Other

A Look at Sentiment and NFTRH 220 Wrap Up

The following is an excerpt from NFTRH 220, published on January 6:

Sentiment (Data courtesy of Sentimentrader.com)

Stock and Sector Sentiment

Well what do you know? Most US stock sectors are becoming unhealthy from a sentiment perspective (above), as the commercial hedgers have gone quite bearish (below). Here is the graph from NFTRH 218:

The Smart Money Has Been Selling Again

...and a short-term sentiment timing graphic:

Short-Term Sentiment


Sentiment Bottom Line

Note that Jason's comments are in contrast to the current NFTRH view that markets could remain strong into spring and then go bearish. A valid question is how long can markets continue higher while being sponsored by dumb, performance-chasing money? The answer is often "longer than you might expect". But we should respect the idea that US markets are in a poor risk vs. reward stance now.

Referring back to the top graphic on page 21, there seems to be one lonely sector - one red headed stepchild - that is out of sorts with the whole process of a degrading risk vs. reward setup. While it is painful in the short-term, it is certainly a positive with respect to the fact that there are phases when the precious metals go contrary to the broad markets.

Hulbert's latest data available to Sentimetrader shows a -6.3% for gold newsletter writers. Anecdotally, a friend advises that Lance Lewis has stated that Hulbert's HGNSI was actually down to -12.5% on January 3. The Sentimentrader data is delayed. This would mean that gold newsletter sentiment is as bad as it was during the summer when prices were 100 bucks lower. That is a bullish divergence, contrarian-wise.

Hulbert Gold Sentiment

The bottom line is that the sentiment data backs up NFTRH's stance of a bullish risk vs. reward on the precious metals (again, this does not mean lower prices cannot come about in the short-term), a bearish risk vs. reward on the broad markets and for sure a bullish risk vs. reward view of the precious metals in relation to the broad markets.


Wrap Up

Please remember that a perma precious metals bull did not write that last paragraph above. Yes, the PM's are in a secular bull market and I am big picture bullish. But when the shorter-term risk is high in the precious metals NFTRH has consistently noted it. When risk vs. reward is good in the broad markets we note it. If at any point it looks like I may be serving up dogma, please contact me and let me know about it.

I try very hard to keep personal views as a rational monetary system and market watcher subordinated to what I see actually happening in the markets on a week-to-week, month-to-month basis. But I have eyes, and as such I see inflation being promoted once again. The work done to date pretty much comes down to the Adjusted Money Supply as being the final leg to be kicked out from under the table that holds Ben Bernanke's carefully arranged place settings. Rising money supply would bring on the next inflationary phase and most probably the next leg up in the precious metals bull.

But there is another scenario that most gold and commodity promoters will not mention. What if rising Treasury yields stop the economy dead in its tracks and actually trigger a real deflation, as money simply seizes up and stops moving? What if the money supply does not rise? What if, just maybe the weakness in the precious metals is a forecast to this condition?

This question is not meant to scare people because I expect the opposite. We are only 1 week into 2013 after all, with Operation Twist barely in the rear view mirror. But various indicators in today's report say it is important for the precious metals to begin to out perform other markets soon in line with favorable sentiment and risk vs. reward profiles.

We will continue to manage the process in-week with interim updates.

 

Back to homepage

Leave a comment

Leave a comment