Rick Ackerman's pal Chuck is bullish. He too heard the "death cross" chants blaring far and wide, saw sentiment in the dumper, saw Robert Prechter and other D Boys broadcast far and wide and figured the fear was not sustainable. Now, at the dawn of -- yawn -- another earnings season, Chuck is bullish on stocks.
And you know what? Chuck could be right. There are no absolutes in the markets. Leading promoters of inflationary and deflationary Armageddons are leaving out an awful lot of nuance and mitigating, often contradictory analysis. So Chuck is bullish... Rick is bearish... the question is, over what time frames and what is in force over the intermediate to long term?
The 30 year bond continues along as it has for decades and thus, policy continues along as it has for decades (with the supplement of steroids which keep up appearances for the aging Keynesian financial construct). Keep a big picture view at all times; it is the only way not to get lost within this macro silliness. Keep your compass well tuned (can a compass be tuned? I guess calibrated would be a better word).
Chuck is bullish on gold and the gold stocks, noting a huge inverted H&S on the miner indexes (here we go again, if anything it is a huge Cup as there was no prior down trend - same diff though; bullish with the same measured upside target). Great, except that I do not want to hear a gold adviser talking about gold, gold stocks and broad market going up all at the same time because that would NOT be the favored scenario for gold stock investors who want to make an absolute killing.
No, the gold stock upside blow off would be born of fear and desperation elsewhere. Gold has higher to go before common sense is enforced upon myopic policy makers as it simply provides a barometric pressure reading on the system. Then one day, when we have our financial coming to Jesus, I suppose gold will settle back down and go dormant until once again needed.
Gold stocks would be the real bubble, starting one day in the not too distant future, by my work. This is predicated on the D Boys asserting their dominance at least one more time, the gold-silver ratio breaking out and the treasury bond pulling in all manner of sheeple (to use a well worn gold bug term).
Alternately, if the silver bugs and inflation captains are correct and gold declines in silver terms, copper attains new highs and the powerful next leg up in the broad markets ignites from today's 'dumb money' fear readings, gold mining is done as the go-to sector. We will then look to a world full of other possibilities.
Do I make myself somewhat clear or am I riddling? Sometimes I honestly don't know.
Edit (a few minutes later): I forgot to note, NFTRH92 is out now. It feels as though it knows what it is talking about and is in a 'things are making sense' zone. Guess I'll add the Alice in Wonderland graphic to the post and let you know that I have a lot of confidence right now in my personal stance within the markets. That is the case even if Chuck is right and I end up dropping the Dow and S&P short positions currently held against a healthy collection of gold stocks. #92 also introduced an initial dipping of the toe into a global emerging - or is it a frontier - market under theme that the world is not ending, just changing.
Disclosure: No positions mentioned