Author Archives: NFTRH

Politics, Psychology and Investing

By -

shadow

Robot-48x48There are 3 Things in the title.  Thing 2 is a big key to managing markets and being successful at Thing 3.  Thing 1, while a consideration to the extent that it affects policy and structural macro issues, can get people all screwed up with respect to Thing 2, thereby hurting their chances with Thing 3.  As noted in an article last April, it is vital for investors to deprogram themselves, especially when it comes to politics.

To the extent I went over the top with the theatrics after the election, making light of fully erected Trump Towers (vertical stock charts of the ‘Trump plays’) and whatnot, I got out of line with my normal mode, which is to tune it all out.  But hear me now; the Trump phenomenon was very good for me because it opened up a wellspring of psychological inputs I can work with.  The gentle, firmly entrenched Obama whispering lullabys to us for 8 years?  A snooze fest.

With Trump, politics are not involved in my market view but psychology surely is.  Fiscal (Trump admin) as opposed to monetary (Bernanke/Yellen Fed under Obama) economic manipulation may work or it may not.  But it is just a different form of government policy trying to will an economy to do what they want it to do.  I’ll just stay open minded because… psychology. (more…)

Gold in Euros Forecasting Gold’s Future?

By -

Gold vs. the Euro index can be a leader for gold in nominal terms.  I was reminded of this when reading an aside within Tom McClellan’s article Copper Leads the Way Lower for Bond Yields, posted at Biiwii.  His article was interesting to me because its thesis supports my view that long-term bond yields are due to decline.  But the aside about gold and euros got me pulling some charts for this post.

Au-XEU (daily) has declined to a support zone and retraced over 50% of the 2016 gain.

gold vs. euros (more…)

2016: A Year for Contrarians; 2017 Shaping Up That Way as Well

By -

alice2016 was the year I finally decided to codify my niche as a psychology-focused market contrarian, putting the Alice, Red Queen and Rabbit components of NFTRH’s logo right there on my inner forearm, forever.

This is because I love the imagery and themes of NFTRH’s guiding metaphorical story, Alice in Wonderland, and because the weird technical tools I use are generally in service to one thing; being right when the herds are going the wrong way. The concept originally came to me as the markets were beginning their descent into the crash of 2008 as the newly launched market management service needed a view that was apart from the emotional herds then preparing to go down the drain. Alice’s quote (Lewis Carroll), a portion of which occupies my other inner forearm was perfect in this regard…

“If I had a world of my own, everything would be nonsense. Nothing would be what it is, because everything would be what it isn’t. And contrary wise, what is, it wouldn’t be. And what it wouldn’t be, it would. You see?”

(more…)

R.I.P. Bond Bull!!!!!

By -

I had to add all the !!!!! because as in the mainstream media, this little outpost wants to get your attention and get you all riled up.  Here’s the headline (from Bloomberg, which I actually like a lot more than the average financial media backwash).

[edit] Just yesterday we highlighted the same MSM entity publishing some very sound words by Barry Ritholtz on a related topic.

Clicking the headline yields the article…

headline

So the charts say the last gasps have been taken, do they?  Oooh, the charts…

(more…)

Bonds: 90% of You Are Herding

By -

90% (my low-balled estimate) of you, the investing public, are herding when it comes to the bond market.  You may not know it because the overwhelming psychological atmosphere is to reaffirm, not question peoples’ behavior.  That is what herding is; a comforting feeling of going with the flow and being at one with your environment and the greater zeitgeist.

Now, please don’t be offended by the title; you dear reader may well be one of the 10%.  But out there in the financial investment realm, they are herding, BIG time, as bond yields are expected to continue rising, because… media; because“Great Rotation, part 2” and because… the story of epic secular changes and the chance to be early and clued in to a great new market phase are so alluring.

(more…)

Mid-Week Market Sentiment Update

By -

A quick look across the landscape on OPEC/Oil hype day in the global markets.

Public optimism in oil was already turning up pre-OPEC.  A production cut would get everybody lathered apparently, because rising prices are bullish after all.  I pre-bought our heating oil at cheap prices this winter, so bring it on I guess.  I am neutral on oil but a big surge from this hype could tilt it bearish.  From Sentimentrader.com

crude oil optimism index

(more…)

MSM’s Druck’in Suck-In Continues

By -

Disclosure (which I feel, given the post’s content, should be reiterated):  I am not short even a single equity of any kind.  I am only long selected stocks and cash at this time, but surely subject to a change of status in the future.

Why, did you know that in a note to clients Tom Lee wrote that Donald Trump’s term could usher in major bull market akin to those preceded by Ike and Reagan?  He did, in a note to clients and the MSM really wants you to know about it!  Now, there is a case that eventually his favored areas of Energy, Mining, Basic Materials, etc. will out perform.  But that word “eventually” is an important one, unless you are a died in the wool trickle downer willing to ride the big correction or bear market that is likely first.

Trump win could produce major bull market – here’s what I’m buying

“Notably, the two longest bull markets in history 1953-1974 and 1982-1999 were preceded by a Republican ‘revolution,’” he wrote.

Lee likened Trump to the Republican presidents in this way; Eisenhower in the early 1950s invested in infrastructure, and Reagan pursued tax cuts and deregulation, Lee wrote, much like what Trump has promised to carry out in his presidency.

(more…)