Amigos 1 & 2 Arrive, #3 Is Still Out There

The 3 Amigos were a blogger’s way of not boring himself to death while fleshing out important macro indicators month after month.

Amigo #1 (SPX/Gold ratio) got home and dropped from target. What’s more, it has taken back the ratio’s equivalent of the entire Trump rally and that is an eventuality we are very open to on nominal SPX as well.

The gaps are interesting and among several possibilities for 2019 we could see fear, loathing and a fill of the lower gap (a greed gap of sorts) prior to a filling of the upper gap, which could blow out the stock bull in manic fashion one day. Relax, it’s just one of several possible roadmaps. For now, we simply state that SPX/Gold reached a very viable target and dutifully dropped with the market stress.

Yield

Amigo #2 (30yr Treasury yield AKA the Continuum) got the bond bears on the wrong side of the boat and kept them there for a couple of months before the big reversal (back below the monthly EMA 100) that came along with the risk ‘off’ rush amid Q4 2018’s market stress. Continue reading "Amigos 1 & 2 Arrive, #3 Is Still Out There"

Weekly Futures Recap With Mike Seery

We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.

Gold Futures

Gold futures in the February contract settled last Friday in New York at 1,283 an ounce while currently trading at 1,286 up slightly for the week, but ending on a sour note. The monthly employment report was released this morning showing that we added over 300,000 new jobs which were higher than expectations. That shows you how strong the U.S. economy is at this time despite the fact of huge volatility in the stock market as that sent gold down about $8 which isn't too bad in my opinion as I remain bullish. I have been recommending a bullish trade from the 1,252 level land if you took that trade place the stop loss under the ten-day low which now has been raised to 1,257 as the chart structure will improve on a daily basis starting next week. Gold prices touched the 1,300 level as I still think we can get up to 1,350 in the coming weeks ahead as strong demand has come back into the precious metals as I am currently recommending bullish positions in silver and platinum. Gold futures are trading far above their 20 and 100-day moving average as clearly the trend has turned higher so continue to play this to the upside and if you're not involved, wait for some further price pullback to enter into a bullish position
TREND: HIGHER
CHART STRUCTURE: IMPROVING
VOLATILITY: LOW

Continue reading "Weekly Futures Recap With Mike Seery"

The Men Who Stare At Charts

gold/silver ratioI was going to look around to see if I could find a media article out there (complete with a TA trying to sound really important) that would be appropriate to be made fun of in our little Men Who Stare at Charts series. But then I decided to create my own chart, stare at it a little, post it and talk about it (hopefully not too self-importantly).

Introducing an all too busy long-term (monthly) view of the Gold/Silver ratio, along with some key nominal markets.

The Continuum in the lower panel symbolizes the deflationary backbone that has been in place for decades. I maintain that this is a firm marker against which the Fed inflates money supplies, manipulates bonds and by extension manipulates inflation signals. We have been on a theme that like Jerome Powell or hate him, he knows exactly what he is doing because to do otherwise (promote ongoing bubbles on top of bubbles) would, in essence, end the Fed’s racket, as symbolized by a real breakout in long-term yields. Continue reading "The Men Who Stare At Charts"

Cyclical Assets Vs. Gold

In January of 2018, we noted a cyclical leader (Semiconductor Fab Equipment) in trouble: Semi Canary Still Chirping, But He’s Gonna Croak in 2018.

We also ran a series of articles featuring the happy-go-lucky 3 Amigos (of the macro) in order to gauge a point when larger herds of investors would become aware of cyclical issues facing the global (including the US) economy. Each Amigo (SPX/Gold Ratio, Long-term Treasury yields, and a flattening Yield Curve) would ride with the good times but signal an end to those good times when reaching destination (Amigos 1 & 2 got home but #3, the Yield Curve is still out there). Here is the latest Amigos status update from October: SPX/Gold, 30yr Yields & Yield Curve.

Today I would like to stick with a cyclical macro view, but do so through a lens filtered by the ultimate counter-cyclical asset, gold. As market participants, we are lost if we do not have road maps. That is why we (NFTRH) gauged Semi Equipment vs. Semi (and Tech), the unified messages of the macro Amigo indicators and many other breadth and cyclical indicators along the way to safely guide us to Q4 2018, which has been a challenge for many, but business as usual for those of us who were prepared.

But gold, which all too often gets tied up in an ‘inflation protection’ pitch by commodity bulls, is one of the best signalers of a counter-cyclical backdrop as its best characteristic is that of value retention and capital preservation. Gold, being outside the constellation of risk ‘on’ assets does not pay any income, does not leverage good economic times and does not inherently involve risk because it is a marker of stable value. Hence its underperformance during cyclical good times (leverage and all) and its outperformance during troubled counter-cyclical times.

So let’s take an updated look at gold vs. various cyclical items Continue reading "Cyclical Assets Vs. Gold"

Weekly Futures Recap With Mike Seery

We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.

Gold Futures

Gold futures in the February contract is currently trading at 1,261 after settling last Friday at 1,241 in New York hitting a 5 ½ month high continuing its bullish momentum. The stock market has utterly collapsed this week as money flows are continuing to exit and I do believe new money will start to enter into the gold market. However, I'm surprised that gold prices have not reacted more bullish to the recent sell-off in equities. I have been recommending a bullish position from the 1,252 level and if you took that trade continue to place the stop loss under the 10-day low standing at 1,236 as the chart structure is solid due to the fact of the extremely low volatility which is very surprising as craziness is upon us. Gold prices are trading above their 20 and 100-day moving average as clearly this trend is to the upside as I also have a bullish silver recommendation. There is absolute panic as I think the volatility in gold will expand tremendously to the upside in the coming weeks and months ahead so continue to stay long as I see no reason to be short.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: LOW

Continue reading "Weekly Futures Recap With Mike Seery"