AP checks in w/ some silliness of its own...

"Stocks fell late last week on worries about the strength of the economy, boosting safe-haven assets like the dollar. Analysts say investors will continue to look for dips in the rally as a way to get into the market, not wanting to end the year without participating in some of the big gains stocks have made this year."

More thanks to Mr. B

Okay Mr. Bullard...

I guess I will friggin' party on... but nobody says I have to like it. ;-) Linear chart shown for effect.

"Wall St opens higher after Bullard comments"

NEW YORK (Reuters) – "U.S. stocks opened higher on Monday after comments by a Fed official reassured investors the government is committed to helping the economy recover from a deep recession."

Translation: Look, you know this is illegitimate and we know this is illegitimate, but we hope that HOPE can become a transformational thing, with the best case being a cyclical bull market kick started through admittedly panicked, ill-guided and unproductive policy. We'll deal with the fall out later but for now, party on... we NEED you speculators to friggin' PARTY ON!!

NFTRH60 out now

It is a nice New England day, with wood to chainsaw, kindling to collect and football to watch. So, rather than go into a big description I'll just reproduce a snippet from #60. Things are making sense, and now the ball is in the court of various markets, including Uncle Buck.

"The gold mining and exploration companies will benefit in either scenario above. Ironically, if #1 comes to pass, this will probably do no favors to their bottom lines as gold potentially underperforms vital assets like energy and other mining cost drivers. That is why I would label a gold stock rise into a severe inflation blow off as a selling opportunity; an opportunity to sell your gold stocks and immediately put the proceeds into additional physical gold, resources and sound investments for sound living.

If #2 comes to pass, the irony would be that gold stock prices would likely decline with the rest of the Hope ’09 construct even as their fundamentals improve by leaps and bounds as gold’s real price takes the next leg higher out of the current consolidations vs. many other assets. Unlike the selling opportunity noted above, this would be a buying opportunity, with good investment merit for a new age as it slowly dawns on the herd that the old rules no longer apply."

NFTRH 1 year ago

Speaking of the TED spread, from NFTRH9 dated November 22, 2008:

TED Spread & LIBOR Still With the Program [TED & LIBOR 1 Mo. charts omitted]

Again, these are not the kind of charts I want to be posting on NFTRH. What I want to be doing is looking at markets, stocks, bonds and currencies in a relatively stable environment. But since the NFTRH launch, I have not gotten what I want. These macro indicators, along with the above money supply data are a necessary evil for the time being because they help us navigate a historically difficult period. They help us avoid becoming just another sheep to the slaughter.

These charts rising impulsively are the last things economists want to see. As it turned out, the pullback in credit and risk nearly ground the system to a halt. With the massive globally coordinated efforts on the part of policymakers to savage their currencies, we indeed have more indication that the panic is easing. But of course the cost will one day be extracted in the form of a more intense inflation problem. But for right now, all anyone cares about is refuge from the deflation impulse now in progress.

This is not good...

Stock promoters do not want you to look at this chart... the government does not want you to look at this chart... As risk rises, the t-bill generally rises (its yield declines) and well, there ain't no 'less than zero' involved and if there was, it would seek it out. You know, frightened money might actually pay for perceived safety.

Each time the Fed has met (and pretended to have a decision to make) during the supposed recovery, I have posted an updating chart of the t-bill yield ($IRX) with its implications stating that there is no decision to make. There is no real recovery either.

Unfortunately, all too many just go with the flow. They are the dumb money and that money is dumb for a reason.

I would like to know who, in this grand rally and economic recovery environment, is so scared they have just got to get themselves more t-bills? The lower panel is the TED spread, between t-bills and eurodollars which NFTRH used as a bullish indicator back in Q4, 08. Now, it is turning up and that squares with the message of the nominal t-bill.

Silver

Silver is not bearish. In fact since the breakout it is bullish as long as top line holds. There is a gap down inside the triangle, which would muddy things up if filled.

Gold-Silver ratio remains the key to the various market plays, however. But silver is in no way technically bearish as it stands now. And that means my own personal whipsaw, ZSL must only be very temporary until the technicals change. Edit (2:34) Nice recovery in the PM's and silver looking good. ZSL likely to be sold again. I am getting tired of messing up the blog with this ZSL idiocy, so from now on just assume I am either in it or... not. But I am boring the hell out of myself with this amateurish in and out stuff. If it is owned, it will be noted in the newsletter's portfolio section. Jeepers Gary, ENOUGH already.

New Gold - Sometimes it's better to shoot 1st, ask Q's later

New Gold to appeal suspension of mining operations. On Monday, when I sold it, everything appeared okay except for this nagging issue that never seems to go away, as the company anticipated continued operations. Now, the all-too familiar work stoppage based on a ruling by the Federal Court of Administrative Justice, is again in play.

Mining is a risky business and these things can blow up out of nowhere. The chart looked fine on Monday. My gut on the other hand...

Gold stocks are not gold. They provide profit and that profit simply must go to you (me), not to management, Mexican kangaroo courts or institutional profiteers. It must go to you.

Dear subscribers...

In reference to this morning's note, I have just flip flopped back into ZSL (most likely for a short term) while I could get it for close to what I sold it for yesterday. This goes along with all the other shorts and helps me hold gold stock positions strongly.

Signed,

Your Whipsawed letter writer. :-)

VIX

Here is another previous chart that has been updating. The big spike to the SMA 200 gave me a chance to get out of some VIX calls that were looking at front month status, but I still hold some others, with higher hopes. Although time is becoming an issue there as well.

I had mentioned that the VIX needed to hold the SMA 50 area to keep the bearish proceedings rolling, but it was not to be. So, upon such time as VIX declines again to the bottom of the reverse symmetrical triangle, it will be time to punish the bulls, if only for a trade. But maybe more, since they are living on hope, denial and hype. Oh, and a heck of a lot of terrible inflation policy.

Keep buying little piggies...

Here is a chart originally done a few weeks ago, that updates on a chart list. The status has only degraded since then for risk vs. reward watchers.

Trouble at Evil HQ?

Does this look like a bullish chart to you?



How about this one?

GSR - What's it mean?

Here is what it means... Basically this ratio had better find support right here at the SMA 50 or I am going to once again cover the silver short in ignominy and let gold and silver miners ride naked and free.

Here is what else it means... unless gold can establish dominance in the short term (it of course already dominates in the intermediate and long term vs. silver, and every damn thing else) you might wish to get ready for some serious inflation headlines. Maybe even the most serious kind. Because inflation fears will be threatening to break out and the environment would be potentially dangerous to inflationists and deflationists alike, in a game of winner take all, or Russian Roulette, or what have you.

Authorities are getting very anxious, and a wet behind the ears President is over there in China with his hat in his hand. Things could get really woogly soon. Best for a deflationary impulse to hit when everybody least expects it. But we sure may not get what is best, or the better of two evils.

Edit (12:00) Silver short covered once again. GSR SMA 50 remains intact, but I am going to use shorts on other sectors against gold & silver holdings. Too much potential for blow off here. Edit: (12:25) And in the event that I just capitulated the top, I'll accept thanks in advance for the wonderful contrary indicator that is me. We are in the realm of the monetary however, so shorting silver is dangerous because hyperinflation is entering the debate. I am going to increase the shorts on other markets as opportunities arise however, which should provide a nice spread short the garbage and long the good stuff.

"Gold is my enemy" --Paul Volcker

From the Kudlow show... Rick Santelli recalls Paul Volcker thusly: "I can't remember the exact quote but when I used to trade and Mr. Volcker was Fed chairman, he said something like 'gold is my enemy, I'm always watching what gold is doing', we need to think why he made a statement like that. If you're a central banker or one of the congressmen or senators, watch what gold is doing because this is a no-confidence vote in fiscal and dollar policy.'

You know Greenspan, the former gold bug, was obsessed with what gold was doing. Are the myopic academics running the show today tuned in? Do they - perish the thought - actually want a gold bubble; the 'final bubble' as I have called it over the years? There's only one asset (the monetary one) in new high, blue sky territory. Stay tuned.