Dat all ya got Bully?

I probably should not taunt these creeps because hope and hype can go a long way in the short term. Rather than contemplate covering anything, I added back starter positions in a couple favored gold stocks (sold on the unsustainable rise to HUI 400) because as noted in NFTRH41, the gold-silver ratio has come to a point where markets (including silver and gold stocks) can get a bounce.

Will it be a one day wonder or something more? I don't know. But the state of the various market technicals say hold short against long gold positions. So, if this mess drops as expected and takes gold miners lower, at least they have investment merit and the shorts will come back to life.

Failing that, if the market turns and burns higher here, mentally stopping out my short positions, it may invalidate what I have been following as a very bullish intermediate term potential as most recently discussed in #41. This is counter intuitive I know. But this is the markets.

To subscribers: Today's activity will probably be a good lead in to an email status update tomorrow morning.

Edit (2:51) Here is the operative clip from NFTRH41:

The GSR [gold-silver ratio] has chosen its path and broken to the upside of the wedge we have been watching. This signals bearish tidings for the hopeful trade in stocks and commodities. If the GSR hits some turbulence at the SMA 200, markets could get a brief reprieve from recent bearishness. This would include gold and silver stocks of course.

Again, if stocks remain on a higher course short term, a very bullish intermediate pattern will be all but invalidated. A drop to the low 800's by the SPX would be best for the bulls. The problem is nobody bothered to tell the bulls what is best for them beyond their short term impulses.

Edit (5:07) Adding the chart of the gold-silver ratio (GSR), the likes of which showed up in this weekend's newsletter along with gold's ratio to oil, industrial metals and S&P 500. This adds a visual to the above in showing that indicators can become 'over bought' as well. Was it a logical point for a reaction with stressed MACD & RSI as the ratio hit its SMA 200? Well obviously, yeh.

















Meanwhile, we prepare to adjust if the market demands adjustment and unfortunately for the bulls, that adjustment will likely mean removing our intermediate term bullish scenario. At this point however, no adjustment. Just aggravation. :-( Ah what the heck, turn that frown upside down! :-) Thus ends today's micromanagement exercise. I am going to go spend some quiet time with my wife while kiddos are at soccer camp.