Another Stroll Though Time w/ the HUI-Gold Ratio

This is just a friendly reminder about how bloody important it is for the HUI-Gold Ratio (HGR) leading indicator (to the precious metals sector) to maintain its higher lows status.

Yesterday the goons apparently attacked ‘paper gold’ (according to sources who stand on guard for this stuff) after the HGR had become weak.  A pleasant thing happened however, as the HGR did not buy the take down in nominal gold.  2 Hour chart above. Continue reading "Another Stroll Though Time w/ the HUI-Gold Ratio"

Short & Intermediate View of the Market

The US indexes predictably rallied during the happy holiday week, with Friday putting a nice punctuation on the bullish proceedings.  In fact, I caught myself looking at the TECL, NUGT and individual gold miner positions in my trading account with a big dumb smile on my face.  Then I sold them all.  Sidetracking for a moment, I have found that I need to get back to more active trading so I am going to further fund this account and ruthlessly trade this market in a discreet account for pure trading.

Back on the post’s theme, the holiday volume was suspect to say the least.  I have a preferred macro theme for the intermediate term however, and it is bullish for an extended rally pending a confirmation of, or more likely a cleaning out of last week’s bullish enthusiasm. Continue reading "Short & Intermediate View of the Market"

Post-Election Thoughts

The opening segment of NFTRH 212 did what an unbiased financial writer probably should not do and discussed politics. Then 24 pages of straight analysis followed.

Financial writers far and wide are weighing in on the US Presidential election result and its implications. So jumping into the ring, here are mine.

For the third cycle in a row I cast a protest vote. After voting for George Bush in 2000 (actually it was more a vote against Al Gore) I wrote in Ron Paul in 2004 and 2008. This year I voted for Gary Johnson, although I do not consider myself a Libertarian. I consider myself an independent who has long since been alienated from a two party system that looks a lot like dangerously competitive cartoons from opposite ends of a narrowly constructed ideological spectrum.

When you write a newsletter, you learn about being a newsletter writer; just like when you become a plumber, you learn a lot about plumbing. I once made an unfavorable public blog post about what I considered to be a cartoon that went by the name of Sarah Palin and was summarily served with an indignant email and subscription cancelation from an otherwise satisfied NFTRH subscriber. Lesson learned: There is little place for political commentary in financial analysis. Besides, political ideologues make really biased financial commentators; and in the markets bias just kills you. Continue reading "Post-Election Thoughts"

Updating the HUI-SPX Ratio

There were reasons for the mind numbing gold stock correction out of the hysterical events of the 2011 Euro-led meltdown and its aftermath.  Take your pick…

  • Too many lousy gold mining operations not keeping on top of costs and/or execution projections.
  • Too many scammy smaller operations doing little more than issuing stock and telling stories needed to be weeded out.
  • Over bullish sentiment was that this time the gold bug true believers really were going to take Hamburger Hill as Europe’s implosion would be taking down the rest of the civilized world.
  • Highly strategic yet indirect manipulation of the gold miners’ product – a barbarous relic not welcome in an economic discussion by today’s monetary policy setting intellectuals – by a very overt (publicized) manipulation of the Treasury yield curve in Operation Twist.  I will spare you another chart of gold’s correlation to the curve.

There are more reasons, but now is a time for planning for what comes next.  Not crying over spilled nuggets. Continue reading "Updating the HUI-SPX Ratio"

Happy Halloween... Trick or October Pivot 2?

The run up and aftermath to the FOMC’s QE announcement last month brought a surge of bullish optimism to market players – especially those in the over bought precious metals – that was unsustainable. Enter the predictable October fright fest that has seen big-name US earnings reports routinely punished and sentiment knocked down across the broad markets.  It should be clear to all by now that the US economy is decelerating.

Of course, one look at the Copper-Gold ratio tells that story well enough and has been telling that story since the spring time.  Gold is a counter-cyclical asset that benefits when policy makers are pressured to attempt to compromise their currencies in service to economic growth.  Copper is a cyclical commodity that goes in line with economic growth. Continue reading "Happy Halloween... Trick or October Pivot 2?"