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We began the Amigos theme last year in order to be guided by the goofy riders during the ending stages of a cyclical, risk-on phase that was not going to end until the proper macro signals come about, no matter how many times the bears declared victory along the way. The fact that grown adults see conspiracies around every corner (okay, I see them around every third corner myself, but work with me here) makes such macro signaling very necessary in order to keep bias at bay.
[edit] As if on cue, out comes Anthony B. Sanders with… US Housing Starts Plunge Under Rising Interest Rates
I agree with you, this does not look healthy.
See…
Trump delivers another attack on Fed, calling central bank the biggest threat
Here is the entire article (blurb)…
President Donald Trump unleashed another attack on the Federal Reserve, calling the central bank his “biggest threat,” in an interview he gave to Fox Business Network. “My biggest threat is the Fed,” Trump said, according to excerpts released by the network ahead of an interview to air at 8 p.m. Eastern. “Because the Fed is raising rates too fast and it’s independent so I don’t speak to them but I’m not happy with what he’s doing because it’s going too fast because you looked at the last inflation numbers they are very low.” When pointed out to Trump that he nominated Jerome Powell instead of Janet Yellen, the president said he wasn’t blaming anyone. “I put him there and maybe it’s right maybe it’s wrong but I put him there.” He also referenced the other nominees to the Fed he’s made. “I put a couple of other people there I’m not so happy with too but for the most part I’m very happy with people.”
“Because the Fed is raising rates too fast…”
The 2 year note players in the bond market are and have been raising rates too fast if anybody is; and I don’t think they are. But Trump does have a point in that it appears the Fed is playing catch up on his watch after being way too slack on the previous administration’s watch (as I used to routinely bitch about). (more…)
On the one hand you have the sons of Harvey & Erb, who called gold to $800/oz. and caused a stir in the gold “community”. Per Campbell Harvey in this video with Kitco’s Daniella (dig the flowing golden locks of hair)…
“Gold is just too volatile” to be an effective inflation hedge.
Well yes sir, you are right. Gold does not track inflation in any kind of a convenient time frame. Gold’s volatility is a reflection of the volatility of the assets orbiting around it in the constellation of risk. (more…)
A general review of the current status across different asset markets. This is not comprehensive, forward-looking analysis as per NFTRH, but it is an up to the minute summary (as of Friday afternoon).
Gold, silver and gold stock indexes/ETFs made what I had thought were bear flags yesterday, but today’s reversal painted them as short-term bounce patterns (‘W’ with a higher low in the miners and silver).
This chart of gold shows a flag breakdown, whipsaw and new closing high for the short-term move. As we’ve noted for weeks now, the Commitments of Traders (CoT) is in a contrary bullish alignment with large Specs all but wrung out of the market (they were fleeced again; don’t believe hype about their increased shorting being some sort of conspiracy). All in all, not bad for the relic. The bounce lives on. (more…)
I was reading a post by Martin Armstrong called…
Gold and the Changing Fundamentals
…and in it he published a question from an email sent by a reader:
“Mr. Armstrong; You are obviously the person worth listening to when it comes to gold. Every fundamental these people have argued to support gold has proven completely false. Confusion in gold is really very high. You have to be really stupid at this point to listen to this nonsense. Can you express any opinion on gold?”
“These people” the emailer is talking about are obviously the gold “community” at large and the “gold analyst” (ha ha ha, gold analyst; hi, I am a gold analyst; I analyze a piece of rock that does nothing whatsoever) community in particular. First of all, anyone who belongs to a community is already implicitly sworn in as biased. Secondly, a gold analyst is just another term for gold-obsessed idealist who really wants you to be obsessed with it too.
Don’t get me wrong. There are a lot of market and gold mining analysts very much worth their salt. Within a market analyst’s analysis there is gold analysis, just as there is tin, hogs, corn and global equities analysis. Within a mining analyst’s work is the ability to help us pick real companies in which to invest and avoid the plentiful scams out there. I have two who I trust through our long-term relationships; Inca Kola News (IKN) and a personal contact who is not public (although I think he should be). You should either do intensive fundamental work or have access to reputable sources for it. (more…)
There is nothing bullish happening on the gold and silver charts. Nothing bullish on the miner Index/ETF charts. Nothing bullish on the HUI/Gold ratio. In other words, when it comes to a segment as volatile and sentiment-dependent as the precious metals, we are in the kill zone.
That can be read a couple of different ways. First, the inflationist gold bugs are getting exterminated as the US dollar first rose and since has stubbornly refused to take a pullback.
But the time to buy the gold sector is pretty reliably when the bugs are dead or at least hiding deep in the woodwork; so deep that you’d not even know they are still there. Just as you should have caution when gold bugs are trumpeting loudly, you should be brave when they are in full retreat… or worse, dead. (more…)
The downward plunge never ends when you think it will. There’s always a lower level. That way gold bug spirits get crushed before those left standing can become “joyous”.
Some thoughts from NFTRH 510:
Both gold and silver look like they could be in little daily chart bear flags. Oh no! More bearishness on the way! I am getting bullisher by the week.
Again, that is how it is with the precious metals. Sure, if you go too quickly you get some cuts, scrapes and if too eager, even amputations of fingers by falling knives. But this generally is the type of environment where you stand up and take notice. The gold obsessives – i.e. gold newsletter writers, gold stock experts, “gold analysts” (ha ha ha) and others who want their herds to remain enthralled as if there is no other sector in the markets – are in damage control mode.
Because gold and silver are technically bearish, the gold stock ETFs are on the verge of breakdowns and the world is still risk ‘on’ right now, the amalgam known as the gold “community” may find a need to give the troops the straight scoop, which is that it’s bearish out there. With every fiber of its being the “community” wants not to be saying that, but they have to in order to maintain credibility.
This is when you buy the sector. Period. Now, what does “buy” mean? Well I personally screwed up trades in NEM and AEM. So I am by no means saying that [it] is easy. You have to manage risk while at the same time keeping an eye on the ball, which is a general buying opportunity for anything from a potential strong bounce to a bull phase.
As to that second thing, a turn in the risk ‘on’ world to bearish and/or risk ‘off’ would be the right context. What is happening now is that the inflationists are getting dismissed and the people who buy liquidations within disinflationary backdrops are at the ready. While I am bullish on all counts but the macro fundamentals – which continue to be mixed to bearish – I’d continue to respect the possibility of a final flush before the rally gets going.
No frogs were harmed in the making of this video! At the time of a boil it’s a rubber stunt frog, which gave me a sense of relief as I watched.
As part of the S&P 500 top-test scenario we have favored since February a key component to a failed test would be that the frightened Bullfrogs that jumped out of the pot in February and March would return, settle in and get nice and comfy. Maybe not with the bounce in their hop that they had in January but well, comfy. (more…)
