Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
STABLE COINS PONZI Crypto SCAM WARNING! Iron Titan CRASH to ZERO! Exit USDT While You Can! - 18th Jun 21
FOMC Surprise Takeaways - 18th Jun 21
Youtube Upload Stuck at 0% QUICK FIXES Solutions Tutorial - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations Video - 18th Jun 21
AI Stock Buying Levels, Ratings, Valuations and Trend Analysis into Market Correction - 17th Jun 21
Stocks, Gold, Silver Markets Inflation Tipping Point - 17th Jun 21
Letting Yourself Relax with Activities That You Might Not Have Considered - 17th Jun 21
RAMPANT MONEY PRINTING INFLATION BIG PICTURE! - 16th Jun 21
The Federal Reserve and Inflation - 16th Jun 21
Inflation Soars 5%! Will Gold Skyrocket? - 16th Jun 21
Stock Market Sentiment Speaks: Inflation Is For Fools - 16th Jun 21
Four News Events That Could Drive Gold Bullion Demand - 16th Jun 21
5 ways that crypto is changing the face of online casinos - 16th Jun 21
Transitory Inflation Debate - 15th Jun 21
USDX: The Cleanest Shirt Among the Dirty Laundry - 15th Jun 21
Inflation and Stock Market SPX Record Highs. PPI, FOMC Meeting in Focus - 15th Jun 21
Stock Market SPX 4310 Right Around the Corner! - 15th Jun 21
AI Stocks Strength vs Weakness - Why Selling Google or Facebook is a Big Mistake! - 14th Jun 21
The Bitcoin Crime Wave Hits - 14th Jun 21
Gold Time for Consolidation and Lower Volatility - 14th Jun 21
More Banks & Investors Are NOT Believing Fed Propaganda - 14th Jun 21
Market Inflation Bets – Squaring or Not - 14th Jun 21
Is Gold Really an Inflation Hedge? - 14th Jun 21
The FED Holds the Market. How Long Will It Last? - 14th Jun 21
Coinbase vs Binance for Bitcoin, Ethereum Crypto Trading & Investing During Bear Market 2021 - 11th Jun 21
Gold Price $4000 – Insurance, A Hedge, An Investment - 11th Jun 21
What Drives Gold Prices? (Don't Say "the Fed!") - 11th Jun 21
Why You Need to Buy and Hold Gold Now - 11th Jun 21
Big Pharma Is Back! Biotech Skyrockets On Biogen’s New Alzheimer Drug Approval - 11th Jun 21
Top 5 AI Tech Stocks Trend Analysis, Buying Levels, Ratings and Valuations - 10th Jun 21
Gold’s Inflation Utility - 10th Jun 21
The Fuel Of The Future That’s 9 Times More Efficient Than Lithium - 10th Jun 21
Challenges facing the law industry in 2021 - 10th Jun 21
SELL USDT Tether Before Ponzi Scheme Implodes Triggering 90% Bitcoin CRASH in Cryptos Lehman Bros - 9th Jun 21
Stock Market Sentiment Speaks: Prepare For Volatility - 9th Jun 21
Gold Mining Stocks: Which Door Will Investors Choose? - 9th Jun 21
Fed ‘Taper’ Talk Is Back: Will a Tantrum Follow? - 9th Jun 21
Scientists Discover New Renewable Fuel 3 Times More Powerful Than Gasoline - 9th Jun 21
How do I Choose an Online Trading Broker? - 9th Jun 21
Fed’s Tools are Broken - 8th Jun 21
Stock Market Approaching an Intermediate peak! - 8th Jun 21
Could This Household Chemical Become The Superfuel Of The Future? - 8th Jun 21
The Return of Inflation. Can Gold Withstand the Dark Side? - 7th Jun 21
Why "Trouble is Brewing" for the U.S. Housing Market - 7th Jun 21
Stock Market Volatility Crash Course (VIX vs VVIX) – Learn How to Profit From Volatility - 7th Jun 21
Computer Vision Is Like Investing in the Internet in the ‘90s - 7th Jun 21
MAPLINS - Sheffield Down Memory Lane, Before the Shop Closed its Doors for the Last Time - 7th Jun 21
Wire Brush vs Block Paving Driveway Weeds - How Much Work, Nest Way to Kill Weeds? - 7th Jun 21
When Markets Get Scared and Reverse - 7th Jun 21
Is A New Superfuel About To Take Over Energy Markets? - 7th Jun 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

2016: Current Gold and Commodity Market Themes

Commodities / Commodities Trading Jul 29, 2016 - 02:08 PM GMT

By: Gary_Tanashian

Commodities

A year ago almost to the day we began tracking a ‘Macrocosmic’ theme that would eventually see gold bottom and rise vs. stocks and bonds in 2016, joining its bullish status vs. commodities, which had been in place since 2014.


Nominal gold bottomed in December 2015 before silver, commodities and stocks as a counter cyclical environment birthed a new precious metals bull market.  We updated the progress here, here and here in 2016.

But markets, being the product of immeasurable moving parts, are always in motion and you cannot get too hung up on any one theme, ideology or habit.  When the Semiconductor sector began burping up its positive signals for the economy and for stocks, we listened intently and I for one, put my capital where my mouth was and noted as much each week in NFTRH.

Back in April, with the first improvement in the Semiconductor Equipment sector’s bookings, we went on bull alert.  By June 22, we had established a trend in the rising bookings and noted the Details Behind Semiconductor Leadership and the bullish implications that this Canary’s Canary in the coal mine carried.

With silver firmly leading gold and more recently palladium making a move as well, we had the makings of a risk ‘on’ atmosphere.  The ‘buy’ point (and speaking personally, short-covering point) was the Brexit hysteria, which as NFTRH noted at the time was an (!) on the bear case and quite possibly, the deflationary case.

It was time for an economic growth spurt, quite possibly an inflationary economic growth spurt.  First gold broke down vs. silver and then it did so vs. palladium.  In January 2013 we used gold vs. palladium as a cross reference to the Semi Equipment upturn that had just begun.

This time we have an echo, only this time… silver is playing ball and hence, the precious metals are out in front of the broad market rallies and the indication may be inflationary as opposed to 2013’s global deflationary/US Goldilocks.  Here is gold vs. commodities, with the key breakdowns in the last two panels.

The above signals are bifurcated as the top four panels point counter cyclical still, while the bottom two opened up a pro-economy cyclical view.  We can only go by what is in the markets and what we have are some mixed signals.  But the trend in the signals is toward a firming economy with potential increasing inflationary issues (the Fed’s stated goal is to increase headline inflation after all) as evidenced by the economy-leading, cyclical Semi Equipment sector and firming price signals within manufacturing.

So unlike the post-2012 phase when the precious metals and commodities got hammered into the depths of a bear market, we are using the ‘Greenspan blueprint’ on the current cycle.  In that scenario, gold and stocks can rise together.

The first phase of the precious metals’ initial bull market rise is maturing and we have defined the stock market bull trigger out of the Brexit drama to be a “suck-in”, but so too was 1999-2000 a suck-in.  A lot of actively shorting bears got blown up back then and a lot of actively longing bulls made money (temporarily, at least).

So the current stock market view is one of taking some of the well-earned profits (the market is generally very over bullish, sentiment wise) from having been brave while many were cowering at the negative hype and rotating to positions that look relatively prospective.  For instance, I have been taking profits in the Semis (here and here for example), which are now over bullish with the herd stampeding in, and buying other items from Asia (ex-Japan) to India (each ongoing NFTRH+ trade ideas) to individual stock situations that look interesting.

In the precious metals, I tell you that I am not the one who has been a resolute bull with a “buy, hold, win” mantra.  That would be my friend at IKN, who has distinguished himself so well this year not only in philosophy, but in the quality gold stock situations he covers.  And yes, that’s a well deserved plug for a rarity in gold-sector-specific analysis.

In the precious metals, NFTRH simply continues to advise when risk is high (as with the recent short-term top amid rampant over bullishness) and when risk is favorable, as with an NFTRH update last Friday and last weekend’s (NFTRH 405) report.  As part of #405’s ‘Wrap Up’ segment…

“…over bullish sentiment is all gone (by Sentimentrader’s data, at least) in this bipolar sector. With the average gold bug now convinced of correction the sector seems to be shaping up for re-entry.”

There was one more hard down day and then all that negative sentiment manifested in a new bounce and potential new up leg.

We have our targets for the metals and the miners and given the mature state of the initial bull launch phase (as noted on March 4), I will continue to sell the surges and buy the pullbacks (especially when sentiment gets cleaned up as well as it did last week). Meanwhile, stop losses are easily observable in an up trend.

As we approach the end of summer and the rancorous political theater, market participants can be on alert for changes toward year-end and a return of volatility across most sectors.  But for now, despite short-term risks building in stocks, we have passed 2016’s mid-point in great shape with markets generally performing per our indicators and thus, expectations.

Subscribe to NFTRH Premium for your 25-35 page weekly report, interim updates (including Key ETF charts) and NFTRH+ chart and trade ideas or the free eLetter for an introduction to our work. Or simply keep up to date with plenty of public content at NFTRH.com and Biiwii.com.

By Gary Tanashian

http://biiwii.com

© 2016 Copyright  Gary Tanashian - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Gary Tanashian Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in