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Strong

Politically-Driven S.O.D. (Sons of Druckenmiller) To Lose Again

By: Gary Tanashian of biiwii.com

You know who they are; they are the ones who denied and denied the ginned up bull market in US stocks that nearly tripled under the socialist regime, circa 2009-2016.  They are the ones who clung to gold well past the caution point last summer.  They are (yes, it’s another snappy buzz phrase to either entertain, bore or annoy you… ) the S.O.D., AKA the Sons of Druckenmiller, AKA politically biased and newly activated market participants.  Reference…

Druckenmiller:  Get out of the stock market, own gold (this helped load the boat full of ill-fated gold bugs in the spring).

The night Trump was elected president, Stanley Druckenmiller dumped gold (this signaled the beginning of reparations to gold’s sentiment profile).  He also became very bullish on the stock market; go figure.

Still feel like following the MSM and these media stars they shove down gullible peoples’ throats?

So the well known and much respected Druck was bullish on gold and bearish on the US stock market until he famously flipped his script literally upside down in a knee-jerked response to the presidential election, which cast off the commies and brought in a man who promised to ‘reshore’ America’s outsourced industries (folks, the smoke stacks are gone and they are not coming back, although more Robots may well be, in time).*  He has promised to cut taxes including especially, corporate taxes, and he has promised myriad other fixes to help the economy trickle down to the long-abused middle class. [Read more...]

It's January 2013, With A Twist

The title was not meant as a play on words in reference to Operation Twist, but now that I think about it, maybe it should be.  The Post-Twist financial world is far different than it was before the genius that is Ben Bernanke’s ‘bigger than yours or mine’ brain concocted a maniacal plan that would “sanitize inflation” signals from the bond market and break the then highly elevated yield curve.*

So, why is today like early 2013 and why is there a twist to that view?  Because two indicators have come together to point to economic stability (at least) in the US, with the twist being that other indicators are pointing to a potential unchaining of inflation this time, unlike the 2013 time frame, which was in the grips of global deflation (and Goldilocks in the US).

So gold bugs, don’t get too concerned just yet.  The sector has been overdue for a correction and that is what it has been getting.  Speaking of sanitizing things, over bullish gold sector sentiment has needed a good clean out.  The 2013 signal immediately preceded the worst of the precious metals bear market, but the 2016 signal need not for reasons explained later in the article. [Read more...]

'Gold vs.', Pre-FOMC

By: Gary Tanashian of biiwii.com

We are well along in the precious metals correction and have downside targets for gold, silver and the miners.  In order for that to be a ‘buy’, the sector and macro fundamentals will need to be in order.  Some of those are represented by the gold ratio charts vs. various assets and markets.  Below are two important ones.

Gold vs. Stock Markets has been correcting the big macro change to the upside since leading the entire global market relief phase (potentially out of the grips of global deflation) earlier in the year.  A hold of these moving averages, generally speaking, keeps a key gold sector fundamental in play as the implication is that conventional casino patrons are choosing gold over their traditional go-to assets, stocks.  A breakdown from the moving averages and it’s back to Pallookaville for the gold “community”.

Despite gold having topped out (in nominal terms) months ago, the gold vs. stock markets indicators are intact. [Read more...]

Why The Convoluted Message From Yellen?

By: Gary Tanashian of Biiwii.com

Why the tough talk out of one side of her mouth and ‘other policy tools’ language out of the other (ref. Yellen Lays Out Tools… )?  Oh, I don’t know.  Maybe it has something to do with this…

The stock market has merrily followed money supply aggregates upward since 2009.  When money supply decelerates the market corrects.  When money supply ramps upward the market ramps upward.  Money supply has been rolling over since 2014, which was not coincidentally when the first tremors began for the stock market in its recently completed top (that wasn’t).  From SlopeCharts

s&p 500 and monetary base

But something is out of whack here.  Let’s dial in for a closer look. [Read more...]

Semiconductor Sector, Updated

By: Gary Tanashian of Biiwii.com

We have been using the Semis as a one of several economic signposts, and as an investment/trading destination since the Semi Equipment ‘bookings’ category in the Book-to-Bill ratio began to ramp up several months ago.  But those who say that Semiconductors are subject to pricing pressures are correct.  It is a segment in which people need to be discrete with their investments.  NFTRH 410 updated some details about this market leader.

sox vs. ndx

sox vs. spx

Semiconductor Sector

Semi has been a leader for our overall market and economic view, which has been bullish since noting that a trend of three straight months of increased bookings was established in April. The Book-to-Bill for July came in strong once again, with a new high in the key ‘bookings’ category. [Read more...]

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