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.
Below is a monthly chart of HUI telling some stories of the past.
- The 2003 to 2008 bull rally ended with Huey’s “crown of thorns” as I used to call it back then. An H&S that formed at the end of a great inflationary phase in the markets.
- The great crash of 2008 (Armageddon ’08) was completely deserved
because as I’ve belabored for so many years now, you don’t buy gold
stocks in any heavy and/or long-term way during cyclical inflationary
touts as gold barely keeps up with mining cost commodities and other
assets/markets. The crash of Q4 ’08 cleaned out the inflation bugs and
it did so with great cruelty and relentlessness. Only when every last
bug who’d come aboard for the wrong reasons was exterminated did the
bloodshed finally end.
- So who turned and burned first out of the ’08 (deflationary) bottom?
Gold and then the miners, that’s who. They led the whole raft of
commodities and stocks, which finally bottomed in March of 2009. Then
another massive inflation trade ensued, before blowing out in Q1 of
2011. Then? What I called “Mr. Fat Head” formed as the first
drop found support at 375, the sector rammed upward on a QE tout, then
failed, taking out 460 on the downside and we proclaimed that was that.
Welcome to the bear market.
- Then years of a bear crash and grind took HUI down to Mr. Fat Head’s measured target, which was around 100.
I most often use linear scale charts for stocks, markets and indicators for their more absolute
views. But in the case below we conjure up a long-term log scale chart
showing the Gold/Silver Ratio (GSR) and the S&P 500 (SPX), as it
works better in providing a percentage-based relationship between an
indicator of market liquidity and inflation when declining and lack of
liquidity, deflation or… it has to be said, Goldilocks, when rising.
Now, when viewing the most recent Goldilocks phase, where SPX has
gone in positive correlation with the GSR we will have to suspend
disbelief that this is anything normal or natural. It was created by
will of man as first the Bernanke Fed conjured a balls out inflation out
of 2008’s deflationary destruction and then as a crowning achievement,
concocted Operation Twist in order to manipulate the bond market into
flashing this signal… ‘Nope, no inflation here!’
(Note from Tim; NFTRH was kind enough to post this, and I accidentally published a snippet of the article early today; here, in all its glory, is the complete article):
The Continuum (the systematic downtrend in long-term Treasury yields) has for decades given the Fed the green light on inflation. Sometimes it runs hot (as per the red arrows) and sometimes it runs cold. One year ago people were confused about why a declining stock market was not influencing Fed chief Powell to reverse his relatively hawkish tone.
The Continuum (the systematic downtrend in long-term Treasury yields)
has for decades given the Fed the green light on inflation. Sometimes
it runs hot (as per the red arrows) and sometimes it runs cold. One year
ago people were confused about why a declining stock market was not
influencing Fed chief Powell to reverse his relatively hawkish tone.
The orange arrow shows exactly why, per this post that will be one year old today.
Global central banks have been pumping the liquidity spigots 24/7 and
the US Fed is starting to go that way as well. This during a time of
supposed economic splendor and fruitfulness (it is these contradictions
that are the windows into a ginned up, leveraged economy dependent on
monetary policy) while the S&P 500 breaks through the bull turnstile
to blue sky.
This morning in pre-market the Amigos’ futures charts update the macro story…
…which goes something like this…
They call copper the metal with the Ph.D. in Economics. But these
days Doctor Copper is little more than a quack in that regard, taking a
cue from the metals whose interplay will be critical to deciding the
coming macro for 2020 and the run up to the next US election. Thus, they
are the 3 Metallic Amigos, riding together but providing different signals at different times (this being nftrh.com, you will have to put up with the odd shtick from time to time).