Author Archives: NFTRH

Law 101 Meets Psych 101

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Lawyers and Psychologists

Steve Saville has a post out called Don’t Think Like a Lawyer. In the post he notes the following…

“The job of a judge or juror is to impartially weigh the evidence and arguments put forward by both sides in an effort to determine which side has the stronger case. The job of a lawyer is to argue for one side, regardless of whether that side happens to be right or wrong. As a speculator it is important to think like a judge or a juror, not a lawyer.”

While I often talk about the same concept in psychological terms (subordinate ego, bias and automatic thinking regimens in service to one simple goal; being on the right side of markets) the lawyer analogy works as well. Lawyers often argue cases that are lost causes; that is their job. The market and its millions of inputs from man, machine and casino patron alike is the judge and jury because it renders the verdict to any given stance.

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SPX Cycles, Fed Funds and Gold

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This “amateur cyclist’s” chart (I am anything but a cycles analyst) of the S&P 500 shows that the 12 month marker (C12) meant exactly nothing as the market remained firmly on trend, after brief pokes down in April and May. We noted that C12 was a lesser indicator than the 30 month cycle, which has coincided with some pretty significant changes (+/- a few months). That cycle (C30) is coming due at the end of the summer. Will it mean anything? Well, this market eats top callers for breakfast, lunch, dinner and midnight snacks. But it is worth knowing about to a lucid and well-armed market participant.

spx cycles

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Bonds and Related Indicators

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Excerpted from the June 25 edition of Notes From the Rabbit Hole, which also included comprehensive analysis of US and global stock markets, commodities, precious metals and stock charts galore (with the Market Internals segment, in particular, having evolved into what I find to be a must-have guide).

TLT is now a buck from its target of 129. Tell me, where is all that mania about rising interest rates and the likes of the “R.I.P. Bond Bull Market” headlines (Bloomberg called the bottom almost to the day with that Louise Yamada hype). Now a mature bounce labors on. 129 does not need to stop the move, but it’s a long-standing marker, so… (more…)

Bonds and Related Indicators

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The June 18 edition of Notes From the Rabbit Hole has a few less stock charts this week in order to ramp up the macro talk, which appeared periodically through the report; but especially in the Precious Metals and Bonds segments. Excerpted from NFTRH 452…

Bonds & Related Indicators (and more macro discussion)

The target for TLT continues to be around 129. Treasury bonds are in bull trends (remember back a few months ago to all the bond hatred in the media). How does an eventual decline in bonds square with what we just noted above regarding Q4 2008? [work done in the preceding Precious Metals segment] Treasury bonds were a wonderfully bullish asset during Armageddon ’08 and who’s to say that an upside blow off may not be coming sooner rather than later amid massively over bullish sentiment? I mean, there is certainly no stop sign at our 129 target. Sentiment, as we are all too aware, can take a long while to manifest in pricing.

bonds

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Gold’s “Bearish Bulls” Addressed, Now What?

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[as to the article’s title, I don’t have a firm, paint-by-numbers answer, but I surely do have strategy]

An NFTRH subscriber named Joe, who is a former fund guy and current chart cranking, idea generating maniac (←said with admiration) came up with the term “bearish bulls” recently, by which he meant that a whole lot of people were looking down in the gold sector, especially heading into this week as the dreaded ‘GDXJ rebalance’ and then next week’s FOMC loomed.

On the former, some bounce opportunities were created in oversold companies involved in the rebalance (with bearish bulls’ short covering providing the accelerant) and on the latter, I very much expect the Fed to raise the Funds Rate next week; and so does the futures market. From CME Group

fed funds rate futures

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Gold Miners in 2017 Whipsaw

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Ever since 2012’s failure of the ‘QE 3 rally’ in the precious metals it has not been fruitful to micro manage the gold sector, because that failure jump started a savage bear market that would need time to work out the excesses both in the sector’s investor base and in its mining businesses, which had become bloated and inefficient. That’s what bear markets do; they clean out the landscape to make it inhabitable for new investors one day. Here is a weekly chart showing the bear’s kickoff. HUI’s 55 week EMA then became the ball and chain that kept its fate sealed (red arrows) until January of 2016.

hui

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