Slope of Hope Blog Posts

This is the heart and soul of the web site. Here we have literally tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. You can also click on any category icon to see posts tagged with that particular category.

A Rumbling Below the Surface for US Dollar?

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Today is all about Fed Chair Powell’s Jackson Hole Speech at 10 am Eastern, but from a market perspective, we might want to keep a close watch on the reaction of the USD to what Powell says or does not say.

Why? Yesterday’s strength in the Dollar has reversed overnight into this morning’s pre-market session.

In a post to members at 15:30 yesterday, I posited the following about the USD: “The $64,000 question about Gold and the Gold Miners depends on the direction of the USD: Was the recent decline in DXY the start of a period of weakness or a completed correction?”  (more…)

It’s Quite a Dust-Up

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The way I phrased it last week, I am long-term bearish on precious metals (in spite of their being in a 7 year bear market) and short-term bullish. Well, the “bullish” worked out, because gold, silver, and more specifically the miners, all had nice bounces. Those few days of reprieve, however, seem to have shot their wad, as precious metals have resumed what they have spent the past seven years doing, which is sucking out loud. One way to view this is via the triple-bearish-on-miners fund below, which has a critical breakout above its descending trendline (red oval) and a more recent gap-up (green oval). Let me put it this way – – the chart is bullish, and if this were just a normal common stock, I think any technician would draw the same conclusion.

Just Take The Metals Out Back And Shoot!

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So, does my title appropriately capture the sentiment about metals right now?

While the title may seem a bit extreme to some of you, many are leaving the metals for dead, and others have already written their obituaries.

In fact, this past week, just as the metals were hitting what will likely be a bottoming in either a third wave of this decline, or possibly even all of the decline, a headline article came out on MarketWatch entitled “Here’s why gold might die out as an investment.”

Within that article, the writer alludes to the fact that since gold was not able to rally due to the geopolitical tensions around Turkey, then it is a sign it is no longer useful. However, if any of you have read my articles on this issue, you would know that history does not support the premise that gold reacts as a safe haven for geopolitical tensions. This is purely a fallacy. But, since it is regurgitated so often most of the market has taken it as gospel despite the facts suggesting otherwise.

The next premise within the article upon which he declares gold as dead is due to technology, and he is not referring to cryptocurrencies. While he is not wholly clear regarding this perspective, my assumption is that he is falling into the trap of most people in the market. Since the Nasdaq has continued to rally strongly, along with its supporting cast of FAANG, then that is clearly where younger people are going to put their money, rather than gold.

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What Gold Is Not

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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…)

Gold’s Kill Zone

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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…)

How Low Can Gold Go?

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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.

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