Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
Gold miners require a unique macro-economic backdrop
When gold stock bulls complain about a “smack down”, a “hit” or a “smash” against the poor gold stock sector what they should be thinking about is what a relatively small market the gold stock universe is compared to the multitude of galaxies populated by cyclical and risk on stocks and commodities and the massive bond market. The gold stock sector’s noise to trading volume ratio must be far and away the biggest bull market on the planet (I know because I am part of it :-)).
And once in a while the sector actually warrants all that noise. Like in 2001 when markets were beginning a bear phase and economies were faltering. Like in Q4, 2008 when gold stocks were crashing to unwind previous inflationary excesses, leading stocks and commodities into a terrible crash and rebounding first. Like in March of 2020 when the miners crashed and ‘V’ bottomed to lead what is to this day an ongoing economic recovery born of the inflation that gold and gold stocks first sniffed out.
I remember a reader describing me a few years ago as an ‘if, then’ analyst, and that was a pretty decent description, as nothing is ever certain and markets move from one inflection point to the next, where there is another ‘if, then’ decision to be made.
I was talking in my last post about the possibility that SPX would break up into a high retest, and it did, so the H&S is no longer forming, and the setup on SPX is now a possible nested double top setup. I went though decades of charts on SPX a few years ago and calculated that some 70% of highs and lows on SPX were some kind of double top or bottom so that isn’t necessarily bullish so far.
In the short term a very decent quality rising wedge has formed from the last low at 4164, so I’m expecting that to break down and at least deliver a retracement. If we see a retracement back to the 4164 low, that is now double top support on the smaller of the two nested double top setups.
Now that yet ANOTHER trillion dollars in government waste (AKA the “infrastructure bill”) has been approved, the prospect of more tidal waves of cash sloshing around have pushed equities to yet more lifetime highs. Let’s stroll through some important ETF charts. As usual, click on any chart, and it will fill up your screen as best it is able.
We begin with the diamonds, which had painted out ten red bars in a row, but have reversed hard and undone about half the damage.