|
A big picture
forward look from NFTRH160 (published on November 6th) that was unplanned,
was triggered by the NDX/Gold chart and is intended for open minds:
But that is the reality; we however,
are here for market management. The US leader, the Nasdaq
100, is actually a laggard to the SPX and Dow in the big picture [relative to
its 1999 highs] since the bubble burst. NDX satisfied the 38% bear market Fib
retrace in 2007 just before the 2008 crash. Now, it has impressively
rebounded, looking for more. If NDX should break to new recovery highs, it
will set its sights above 2600.
The companies in this index sell cool
gizmos to the world. Many of them have Chinese labor screwing them together,
customer service people in India answering customer concerns and as I type, I
realize they are making the world a better place for one little newsletter
writer. Several months ago I wondered if maybe Google and Apple - with their
cash hoards - might be the new 'banks' of the 21st Century. In light of the
European financial meltdown and the potential still lurking within many US
financial institutions, I still wonder.
Technically NDX is okay, as
post-bubble bear markets go. In the past there were a lot of comparisons of
NDX to its post-bubble predecessor, Japan's Nikkei. I would attribute the
very different post-bubble trends primarily to the US' ability to leverage
its natural, and thereby financial, resources in a way that the relatively
tiny Pacific island has not been able to do. How much more cement can Japan
accommodate?
NDX in a bear market you say?
Yes, NDX in a bear market (looking
more like the Nikkei, absent the effects of inflation) vs. the money
alternative that has not been printed onDemand for
the last decade. But while we often hear gold bugs proclaiming how much lower
the SPX and Dow have to go in terms of gold, this chart gives my inner gold
bug pause. You know I am susceptible to the call of big tech, after all. This
chart ladies and gentlemen, is a perfect illustration of why I noted that
beyond the current gold miner stance, my potential bullishness then extends
out to the Emerging Markets and big US technology, in that order.
With people in the streets, the
nation apparently now rejecting the lazy sloth and greed of the Greenspan
Inflation onDemand era... with gold and silver
rapidly entering the public mindset... with the Great Depression exhumed from
history... generally, with the public now coming up to speed on what we have
known since 2002 (well, what I have known; you may have gotten it sooner),
and with quality, cash laden tech stocks now bled back down to levels in
ratio to gold not seen since the mid-90's, I for one am ready to accept the
potential for a coming era that sees quality equity selection being rewarded
over the long-term.
Strategic emerging markets (like
those frequented and analyzed by 'charter subscriber' Jonathan) and quality
big tech that will serve those and other markets with the tools of progress
are definitely on NFTRH's
radar. So much so that if we are lucky enough to get one final washout in the
financial markets and one final thrust upward in the precious metals, I could
foresee the potential for a major alteration in NFTRH's plan. This plan might include
relative bearishness in the precious metals and eventually their miners.
Dialing back to the here and now,
nothing has changed. The above is a riff that sprung out of the NDX-Gold
chart and I think it fits with the 'looking ahead' theme. I am uncomfortable
with the way gold exploded during the Euro crisis last summer. I am
uncomfortable with the 'channel buster up' that blew out the then current NFTRH gold analysis.
I do not think gold suffered a
terminal blow off. Not yet. But we who are bullish on gold are part of a herd
you know. And the herd has gotten bigger in the last year. This herd includes
nations and their central banks. My friends and neighbors (and likely yours)
have not yet considered this monetary relic. So all appears fine for now.
Gold has all kinds of upward
potential if and when the final blow off arrives. Thousands of dollars an
ounce. But that is crack pipe talk for 'players'. Gold is only a barometer to
the financial times. The entire developed world is in pain and angst, and
politically things are very tenuous. Wars are on a hair trigger as the US
military industrial complex business grinds on as usual. Inflation's effects
are everywhere as people fall further and further behind in the simple effort
to live and support their families.
It is a great time for gold, just
like in the 70's. Yet the point of this stream of consciousness is that just
like with a bombed out stock, when bottom feeders start looking for news that
can't get any worse and technical patterns that imply a bottom is in, I want this newsletter to be on the job over the
biggest of pictures gauging the process.
Gold probably still needs some major
upside blow off action. But this will not titillate us. We will be cold and
calculating because these are the markets and the herd is never, but never
right. Wow, okay thank you for the brain dump sir; can we now get back to the
market? [NFTRH160 then reverts back to 'here and
now' market analysis...]
|
