Author Archives: NFTRH

Blow Off in Progress, But ‘Launch Phase’ Confirmed

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On March 4 we reviewed the technical reasons why the gold sector was launching as opposed to blowing off. This, after articles began appearing calling the rise to that point a doomed parabolic blow off using daily charts. Those calling it a blow off were confused; silver in spring 2011 was a blow off in the terminal sense. But when a parabolic move comes off a bottom, it is an impulsive thrust to change the trend, possibly ending the bear market.

We have long noted that gold is the first mover to a new inflationary phase, as the previous deflationary backdrop gets played out. That is exactly what happened, even though the silver miners have made stunning strides in leading the exciting up move in silver that is currently in process. Silver, in taking over leadership from gold would confirm an inflationary phase. Gold is monetary and silver is an industrial commodity with monetary aspects as well; i.e. it is more positively correlated to inflated economies making the silver-gold ratio a sensitive indicator to inflation.

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Gold Sector: Macrocosm Updated

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We do in depth analysis on a weekly basis (and every day in-week) because there is no substitute for working to be right with the market’s evolving situation as opposed to making bias or ego stoked calls in hopes of being right.

The current situation has seen some calling ‘bullish’ on the stock market despite a still intact bear trend (noted repeatedly in NFTRH), people going bullish on commodities despite their “bounce only” (also noted repeatedly) status in the absence of real, market-based inflation signals (which I do think are coming soon) and global markets bouncing within bear trends of varying degrees.

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Deprogram Yourself

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Robot-48x48The title of this article is not an assumption that you, astute reader, are little more than a robot following the direct and implied commands of other robots when trying to make logical sense of the state of modern financial markets. Personally, I have found that I need to stay on a path of post-deprogramming maintenance in order to stay right with a complex market backdrop.

On an inward-looking basis, we as investors and traders are faulty humans going up against robots (Ref. Rise of the Quantitative Robots) that are much smarter than we are with numbers, with data mining and with extrapolation. What do we have, puny little human brains with all associated biases, ego distortions and other faults? Yes, that is us.

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At the Gateway to a New Phase

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[edit] I got the shivers when I read TK’s post about Gartman being still “bearish of stocks” as it seems to lend credibility to the bullish scenario.

The market, despite weakening corporate profits and several other headwinds, has decided it liked what it heard from the Inflator in Chief yesterday as it has scored the game Janet Yellen 2, Hawks in Drag 1 and US dollar 0. Is it a final score? I am not sure how our hawkish transvestites can be taken seriously now.

But with a market running on the black boxes of a million quants, large and small, who knows what will happen the next time some clown decides to eat a microphone and dispense dissonance into a situation that Yellen seems very clear on; as my late friend Jonathan Auerbach once famously said (it was famous to me anyway) as we prepared for the post-2008 inflation phase, “it’s inflation all the way baby!”

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Macro Changes and Future Inflation Problems

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macrocosmEver since beginning the ‘Macrosom‘ theme in July (and updating it here), NFTRH has been managing macro changes that would positively affect the gold sector, and quite possibly have a negative effect on broad stock markets. Early on in the precious metals bear market we noted they were “in the mirror” and opposite the stock market, which on the post-2011 cycle has been the beneficiary of the Fed’s inflation, instilling confidence in their policies by conventional market participants (after all, the right assets were going up on this cycle). In August, it appeared that the first real thrust in the direction of our macro theme kicked in as the stock market cracked.

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