• 11 hours Can Twitter Sway Economic Policy?
  • 14 hours Widespread Power Outages Hit New York City
  • 17 hours Equifax To Pay $700 Million To Settle Data Breach Case
  • 19 hours Netflix Struggles To Rebound After Subscriber Hit
  • 2 days $15,000 For Your Crypto’s Ticket To Visibility
  • 3 days The Next Fashion Frontier
  • 4 days What Is Africa’s Role In The New Silk Road?
  • 4 days Trump Was Right About The Dollar
  • 5 days Is Silver Gearing Up For A Rally?
  • 5 days World’s Largest Hedge Fund Turns Bullish On Gold
  • 5 days It’s Time To Spend More On Clean Energy R&D
  • 5 days Contrarian Investors Are Beating The Stock Market
  • 6 days Bulgaria’s Revenue Agency Falls Victim To Biggest Cyber Heist In History
  • 6 days Amazon Faces European Union Anti-Trust Probe
  • 6 days Commodities Are Having A Stellar Year
  • 6 days Bezos’ Next Big Project Could Be Worth $100 Billion Per Year
  • 7 days 3,600 Years Later, Climate Change Turns Mammoths Into $40M Market
  • 7 days Tesla, Apple Claim China Is Stealing Intellectual Property
  • 7 days EV Giants Duke It Out For Battery Dominance
  • 7 days Tech Billionaire Takes Aim At Google
Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

  1. Home
  2. Markets
  3. Other

Gold, Stocks and The Miners

One is the star of the year so far, grinding higher in what could be the launch phase of a new bull market as confidence wanes in the face of NIRP and other desperate global policy actions, and the realization that this disgraceful policy designed to spur speculation and asset price appreciation is all policy makers have got left in their bags of tricks. The endgame is a bag with a hole in it; a monetary black hole.

The other grinds on in what could be the last significant hope replenishing bounce before new downside is explored. Various US and global indexes are already in bear markets but casino patrons are trained to look at the S&P 500, Nasdaq 100 and Dow as "the stock market" and these have not yet gone 'bear'. If the current bear-trend bounce fails however, that confirmation would be coming promptly.

The comments above are verified by the charts of gold vs. the S&P 500 and the Euro STOXX 50. The bullish move and current consolidation are representative of all major stock markets. This is a trend change in gold vs. stocks (joining gold vs. commodities, which turned up long ago).

Charts are and are not lots of things, but one thing they are is 100% accurate pictures of history. Very recent history has seen gold break bear market trends as measured in these stock markets. As you can see by weekly RSI and the MACDs faded into the background gold became over bought vs. stock markets. That was impulsive and potentially a bull market signal, but it has also been in need of a cool down, which is thus far taking the form of a bull flag consolidation, which will provide a test of the bull thesis.

Gold/SPX Weekly Chart

Gold/Euro Stoxx 50 Weekly Chart

Gold vs. Long-term US Treasury bonds is also making a step in a positive direction toward trend change, but is not nearly as advanced.

Gold/30-Year US treasury 30-Year Chart

The above items indicate changing trends in confidence by the investing masses in global Central Banks that have had a really good run over the last few years, with ironclad confidence in their policies by conventional market participants. Of course, hard core gold bugs would not bow to this unprecedented case of global financial fascism, and for their beliefs they were served years of pain. Now the cycles appear to be changing.

Through gold's bear market I, a believer in more honest monetary systems, had to call it what it was. Beliefs and the biases they inspire had to be subjugated to the simplicity of charts like this one that said "Gold is below the EMA 75? It's in a bear market." Not having cheered gold in the face of the bear evidence, I feel I have the right to claim now that gold has broken the bear market limiter and made a strong (but not yet definitive) case for the beginning of a bull market.

Spot Gold Weekly Chart

As for stocks, the S&P 500 has made a weekly moving average signal that produced bear markets in 2 of the last 3 instances.

S&P500 Weekly Chart

Yes, the market is bouncing and we anticipated this in NFTRH well before the current crop of now-bullish momentum players came out of hiding.

Here is the view of the troubled, but unbroken US headline indexes. As we have been noting, the SPX and Dow can break above the weekly EMA 50's and still remain in a bear trend (NDX, in maintaining a series of higher highs and higher lows is in a relative bull stance) after bouncing from critical support as expected.

S&P500, NASDAQ 100 and Dow Weekly Charts

It is in the broader indexes that the US market really flashes bearish. All items are in intermediate bear trends but bouncing back to critical former support, now resistance. If they manage to negate the trends then so be it. We go with what the markets instruct, not our biases or egos. But the fact is that this is a bear bounce only, until otherwise indicated.

Wilshire 5000, Dow Transports, Mid-Caps, Small Caps and NYSE Composite Weekly Charts

The global picture is similar, except that most global stock markets are bouncing from already mature bear trends as opposed to the US market's newer bear trends.

Transitioning back to gold, the yellow metal is an insurance policy and a holder of value, long-term. The miners are the speculation associated with this boring asset and they are decidedly not boring. While we have been expecting a cool down (AKA correction), this has not yet come to be. HUI is in the hands of the momentum players now, desperately buying in so as not to miss the train. Sooner or later they will be punished and people should be actively managing a sector that may be birthing a baby bull market per their own orientations (i.e. trade, buy the dips, etc.). Personally, I mostly trade it now and will look to establish longer-term positions later.

HUI Linear Scale Weekly Chart

We call it a potential baby bull not simply because HUI broke above key resistance (now support) at 140, but due to other signals like the SPX-Gold and STOXX-Gold ratios above and the HUI-Gold ratio below.

HUI/Gold Weekly Chart

Here is the bigger picture view, also making progress but with some work to do as the long-term bull signal would come with a cross up of the moving averages

HUI/Gold Weekly Chart 2

NFTRH manages not only the general views like those above, keeping subscribers up to date each week with a detailed report on events, but also in-week as dynamic markets go through their motions presenting opportunities to gain capital and also protect it. We have been right on with the market's themes all along, not by trying to play Swami or Guru, but by staying on the pulse of macro trends, indicators and market technicals. That is the only way to manage soundly. Assuming you are not a day trader or pure momentum player, I am sure that you will find value in this hard working, time-tested and quality service.

 


Subscribe to NFTRH Premium for your 25-35 page weekly report, interim updates and NFTRH+ chart and trade ideas or the free eLetter for an introduction to our work. Or simply keep up to date with plenty of public content at NFTRH.com. Also, you can follow via Twitter @BiiwiiNFTRH.

 

Back to homepage

Leave a comment

Leave a comment