The Bond Yield Continuum And Gold

Have you heard the news? US Treasury bonds are skyrocketing as it turns out there is no inflation amid a global central bank NIRP-a-thon and race to the currency bottom. Going the other way, our 30yr Treasury yield Continuum is burrowing southward.

If you check out yesterday’s post you’ll see proof that the 2018 NFTRH view that people should tune out the bond experts instructing BOND BEAR MARKET!! was 100% on target.

But today the din is coming from the opposite pole. Everywhere you look on the financial websites it’s now about tanking yields, decelerating growth, trade war damage, and deflation. Here is the 30-year bond yield (TYX), which is front and center in this hysteria (click the charts below for the clearest view). That is one impulsive looking drop.

30 year bond yield

But just as we warned that the precious metals move was a “launch” (not a blow-off as some were calling it) in June because it was at the beginning rather than the end of an extended move, we note that TYX is impulsively dropping into a potential climax. Everybody is on the opposite side of the boat they were on in H2 2018. That would be the BOND BEAR MARKET!! side of the boat with experts Gross, Gundlach, and company. Now amidst the current Armageddon (the SPX is after all down a whole 4% from its all-time high, he said sarcastically) backdrop, it’s all BOND BULL MARKET!! all the time.

Wash…

Rinse…

Repeat… Continue reading "The Bond Yield Continuum And Gold"

Pre-Fed Precious Metals Update

We review these metals as the media schleps all over itself trying to tell people why the Fed will cut 1/4, will cut 1/2, should not cut at all and/or why the president of these United States of America is on Twitter haranguing the Fed to be as disreputable as Mario Draghi and China’s central planners because they know how to play the game. It’s all a game after all, isn’t it Trump? You old currency warrior, you.

Copper daily is nesting on the SMA 50 but locked below resistance and the SMA 200. Still in bounce mode but very unspectacular.

copper

Copper weekly still looks pretty gross. It’s above critical support but locked below a ton of resistance. The 2016-2019 pattern also looks like a freak. I refuse to like industrial metals (or cyclical commodities in general) until I get some technical reason to like them. Continue reading "Pre-Fed Precious Metals Update"

Precious Metals Big Picture

While many are talking about major new bull markets in gold, silver and the miners I find it safer to set realistic goals within a still very bullish outlook. After all, we became bullish in November, had to retrench due to over-bullish sentiment and fading fundamentals in February (both situations linked here) and then have been back in the bull seat since the gold stock launch as noted on June 3rd.

The point being, I have nothing to prove to you; nothing to woo you and tempt your greed impulse about. NFTRH has simply called the sector in line with its fundamentals and technicals, and that is what we continue to do as of this day. We chart 20 quality miners (+/-) each week and note short-term targets, resistance, etc. for the miners, gold and silver routinely.

The other priority is to stay on top of the still-bullish fundamentals. Most recently silver joined the party and is probably slamming our favored theme into gear, which is for it to take over leadership from gold and potentially lead the macro to a future inflationary cycle. Easy now, that is still in the realm of potential, not yet reality. But all of this fun – and it has obviously been fun lately – takes place against a big picture that is lumbering along at its own pace.

What I like best is that due to the big picture view I can put forth a conservative 2019 plan, and it still calls for a minimum of another 70% upside for the HUI index. Within that, many of the miners we track will do much better. And within that, we have not even seen the speculative end wake up yet. Those would be the little TSX-V type penny stock bottle rockets (lottery tickets) that pull 400% rallies out of nowhere when they finally get played.

Okay, let’s reel it into the lumbering big pictures on HUI, gold, and silver. As noted, there will be bumps and pullbacks along the way. Monthly charts are not preferred for managing those situations so we’ll stick with the dailies and weeklies in NFTRH reports. But with the ferocity of the current rally (and the fundamentals behind it) it appears a good bet that a second leg to the impulsive ‘A’ leg in 2016 is underway after the beautiful consolidation that killed everyone’s spirits (as it should) since 2016. Continue reading "Precious Metals Big Picture"

Very Long-Term Silver

Just for fun because I am a chart guy who all too often bores you (and me) to death with ratio and indicator charts and all too seldom makes charts just for the fun of it anymore…

So this long-term silver chart is just for the fun of it. What do we have here?

  • A very long-term Cup & Handle; and boy what a handle. It killed the true believers years ago. I like that the 2011 (bubble) right side high is higher than the 1980 (bubble) left side high (monthly closing basis).
  • A price that has held a very long-term support level at 14, coinciding with a 79% Fib retrace (if you believe Fibs are relevant).
  • Vertical cycle lines spaced around 8 years apart that have marked the two bubble highs, a minor high in the late 80s that led to a years-long trough, a whole lot of nothing in the mid-90s and the start of a massive bull market in 2003. The current line would appear to be a marker to a low.
  • Yes, that thing from 2006 to today looks like an ugly Head & Shoulders pattern, so let’s give it its due as well. If I am wrong about an inflationary near future – and the Gold/Silver ratio still stands in defiance of an inflation trade on this day – you’d want to at least be aware of the bear’s potential.
  • Another thing I don’t care for is the decade long trough that sprung the 2003 bull market vs. the much shorter flat period leading to today. Silver has certainly not had that level of desolation to its investment landscape since the most recent bubble popped in 2011.

So okay, there are at least two caution points if you want to take the long-term chart seriously.

That said, nothing’s changed. I am bullish on silver at this time and prepared to get more bullish if/when it takes over for gold. But obviously, that very important support around 14 that silver twice tested in the last year and three times tested in the last 5 needs to hold. Continue reading "Very Long-Term Silver"

Gold Stock Launch In The Books; What's Next

You may know me as the…

gold

…guy.

The guy using the planets of an imaginary gold sector Macrocosm with proper fundamentals that are decidedly not imaginary but rather, are necessary to call a real bull phase or even bull market. By managing a strict set of macro and sector fundamental inputs (to the sound of crickets and little else in the sector) NFTRH and its subscribers had a front row seat to the now obvious gold mining launch as first the fundamentals came in line, followed by the technicals.

The reason this needs to be highlighted is because there is a popular Elliott Wave analyst out there * (among a few others) talking about how it’s all in the wave counts (unless they are revised, as often happens with EW) or other technicals, and fundamentals don’t matter. As if the answer is all technical and sentiment based. Well, those two things are important, but please. As happened in dramatic fashion when we became super bullish in Q4 2008, the fundamentals kicked in first and gave a green light to taking technical signals more seriously along the way. Look, I am a TA too, but The Men Who Stare at Charts exclusively are pitching only half the story. Continue reading "Gold Stock Launch In The Books; What's Next"