Edit (2:41) Okay, well it is confirmed that some subscribers did not receive. There is evidently an issue with the outgoing mail server at my host or ISP. We will get this fixed ASAP, and thanks for your patience.Edit (12:35) One thing I struggle with is making myself clear on a consistent basis. This morning's update prompted a couple inquiries regarding the 'time to boogie' statement below. In short, time to boogie means downside broad market events signaled by rising gold to asset ratios. Or, as I put it to Bruce:
Bruce,
What I mean by that is that gold outperforming other assets and markets will signal downside events for global markets and a swing from over bullish sentiment to over bearish. Which is where the opportunities would come from. To buy fear.
As for this breakout, this is the reason I hold a good chunk of gold stocks and GLD now. I suppose it is possible for the gold miners to decouple from the rest of the markets, but given their positive correlation of late, I have not been banking on it.
Gold outperforming other assets will signal the contraction in liquidity that the hyg/ief ratio for example, would signal. That is the environment in which I would go near 'all in' on my precious metals holdings. Hopefully, near the bottom of course. Just like HUI 175-150 last year. Except, as you know any extreme HUI downside to come about is significantly higher than that ['no brainer' buy level is higher than last year's 'no brainer' buy levels] for this year, in my opinion.
Regards,
Gary
It has been a morning full of glitches, I am not sure this email got out to the entire subscriber base due to a glitch on the email server. So here it is. From this morning pre-market. Can you please email me if you did NOT receive this earlier by email?
Good morning,
We got our move in the VIX, which is but one indicator in a world full of them that hint that the broad global rally could be rolling over. Now, we have had hints before that Hope '09 just trampled on its way higher, so bears still need to exercise caution. Other indicators to go with the VIX are the HYG/IEF junk to treasury debt ratio, the $USB long bond holding its breakout (even as commodities and the inflation trade are trumpeted far and wide), the FXI/SPY ratio which shows downside leadership by the Chinese market and of course the state of nominal market charts, which show bearish divergence and MACD triggering down.
Here is the hope for the bulls however: The gold/silver ratio still looks weak as the precious metals sector continues to hang tough. Remember, the gold stocks track the price of silver better than gold when the bull is on. This has resulted in the precious metals sector remaining technically okay (in symmetrical triangles) and is I suppose a glimmer of hope for the broad markets. However, gold measured in industrial metals, oil and stock markets looks a bit more positive, although nothing conclusive has been registered. The bottom line here is that when gold makes its real move in ratio to silver, copper, oil, stock market, euro, etc... we will then be ready to boogie. Emotions will run high and all the familiar players will be playing their familiar roles falling into two main categories: victims and capitalists.
If we do get a substantial correction, the question will then become whether this is the total unraveling of an unsustainable construct or just the end of the initial leg up in mini bull cycle destined for SPX 1200 +/- sometime in 2010? I look forward to the day when we can begin charting that question. Patience.
Regards,
