Slope of Hope Blog Posts

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.

“Post-Bubble Contraction”

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“Post-bubble contraction” (PBC) as coined by Bob Hoye, may finally be at hand

Bob Hoye has been talking about a coming post-bubble contraction (PBC) for many years, in my experience. Now after many false starts, it may finally be in play on the wider macro picture. Past contractions (e.g. 2008 and 2020) have proven to be little more than precursors, triggers to new asset bubble phases because the Fed’s main macro manipulation tool, bonds, were in a multi-decade long trend of disinflationary signaling.

To this point with respect to the PBC, timing has been an issue. This is not a critique of Hoye, a fine financial historian and macro fundamental analyst. In fact, it is the opposite. It is from him that I learned the proper fundamentals for gold and especially the gold mining industry. But perfectly good deflationary meltdowns (of previous inflationary operations) were foiled in both 2008 and 2020.

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The Gold Stock Road Map

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It’s a long and volatile road for the gold miners

A daily chart snapshot of the current technical situation for the HUI Gold Bugs index shows a small Head & Shoulders pattern that formed in July-August as noted in this August 28th NFTRH premium update (now public) before it broke down.

So we have Huey holding the neckline of an ugly little pattern today. What I find interesting though is that if the neckline is lost the pattern’s target would be around 178, which… is support area per the weekly chart.

You can see both charts as they were in the update linked above in August.

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Gold & Silver Big Picture

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Excerpted from the October 2 edition of Notes From the Rabbit Hole, NFTRH 725:

Gold & Silver

Gold and silver (monthly chart) continue in the cyclical bear that started in mid-2020. I had originally (and incorrectly) projected a Cup & Handle for gold that had to be revised to a double top when the 2022 high failed to gain blue sky. I’ve left the Cup drawn on the chart but that is no longer a handle of any sort. It’s a mess, actually.

The next technical target for gold is support in the 1500s per this Sept. 15th update [password protected]. Also note that the update included an extreme downside below 1300. While not overly likely (IMO), that would put a hard test on the bull market, which was indicated when gold took out the 1378 “bull gateway” (the bull/bear line shown below) in 2019.

As for silver, it continues to hold important long-term support at/around 18 after making a quick breakdown and reversal.

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Oncoming Gold Stock Bull

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As the proper macro fundamentals for gold mining grind into place…

The real price of gold, as represented on the chart below by gold in relation to commodities, is constructive to have bottomed. As inflation expectations continue to fade with the Fed still in hawk mode this should continue, in order to confirm a bottom.

A majority of gold bugs seem to think that gold stocks have utility against inflation, but they do not. Commodities, which are cyclical, and commodity related stocks have that utility. Gold stocks benefit from fading cyclical inflation as commodities such as mining cost input crude oil decline in relation to gold.

The Gold/CRB ratio (GLD/DBC shown here) is posturing for an attempt to break the downtrend that has been in place since the precious metals began their correction in mid-2020 amid a rampant cyclical inflationary backdrop.

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Gold Miners Start to Fail

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As we step toward a counter-cyclical macro, the fundamentals will finally improve for gold mining

From a June 19th interview I did with with Jordan Roy Byrne with respect to gold stocks, Energy and the proper macro fundamentals for the gold mining sector:

In my experience gold stocks will… they can paint ugly charts and then follow through on those ugly charts. But when a crash finally happens it’s almost poetic in that it’s like the final surrender of the inflationists. The ones who were packed in the sector for the wrong reasons because… ‘buy gold, buy silver, buy hogs, buy copper, buy oil’. No. You buy gold during weakness and when it would look forward to the new easing… of policy makers. The new dove regime or whatever. But it happens amid deflationary pressure.

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