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There is no way to put lipstick on the pig that is the fact of HUI's failure below important support at the 475-500 zone. But the fact is that the HUI has benefited from a rising yield curve (panel 2) and a declining long term yield (panel 3, AKA our biggest picture of an ongoing deflationary need to correct or 'the Continuum', which is periodically met by policy makers' inflationary actions).
The 30 year / 2 year Treasury yield curve has been on a steady march higher since 2007. This makes sense since that was the year things started falling apart in inflated, debt saturated developed global economies, led by the nation that showed 'em how it's done when it comes to economic management by inflation; the US.
When long term yields are rising faster than short term yields, it is a sign of stress building toward either a breakout in inflation expectations or, as has been the case thus far since 2007 (and really, since the age of Inflation onDemand began in 2001), impending reversal of the excesses. Unfortunately, in an age where economies are managed by inflation (by monetization of Treasury/Sovereign debt in service to increasing money supplies) these reversals tend to be shall we say, violent.
By way of NFTRH subscriber MetalAugmentor, a reputable and hard working mining stock fundamental research service to which I also subscribe, comes this thread talking about an entity called Turd Ferguson.
Turd is an offshoot of Zero Hedge, is apparently a really popular blogger among gold bugs and is cooking up plans to do battle with the 'cartel'. 'Silverax' also highlights Jim Sinclair and his own Golden Idea on how to break the cartel. When I read something like "what we need is Maximus, the financial gladiator" I just cringe.
Gold is going where it is going, and it is anchoring value in a time of devaluation. There is no need for war mentality. There is only a need to keep perspective through ongoing events and the dynamic cycles in which they play out (I sound like an old fart, I know).
Why do people need to join clubs, be part of armies and do battle? There will be no such talk of financial gladiators during gold's next up cycle. There will be talk of gold going to $5,000 an oz. and beyond. Get on board the golden express elevator while you can still save yourself! There will be talk of the death of the dollar, euro and various other debt paper. There will be fear and greed in the air all at once.
In short, there will be triumphant crowing from the gold 'community' right up until the next top and into an impending cycle of whining, crying and writhing in pain at which point what, the financial gladiator saves them all again? Or maybe Turd and his hedge fund adviser buddy slay the cartel for good?
Why not save the emotional ups and downs, put that energy into day to day life and understand that we are going to get where we are going despite pathetic attempts at manipulation of the macro by the 'cartel'?
Gold is a tool that Central Banks, big financial institutions and various authorities use to temporarily manipulate the macro. Most recently, the actual manipulation was performed on Treasury yield relationships, which in turn hurt gold, which in turn helped alter the macro ("And contrary-wise; what it is it wouldn't be, and what it wouldn't be it would. You see?" –Alice). It's just business, perverted and way out on a limb though it is.
Don't personalize it, or you risk becoming angry and biased. Anger and bias promote wrong decisions. The gold 'community', with its various leaders and caricatures is more like a cult than anything, and this hurts the 'community's' supposed effort to bring the monetary metal into the mainstream.
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Now that the markets are becoming actionable, with the premier gold stocks technically broken, the stock market vulnerable beneath significant long-term resistance and even a less than stellar jobs report that got both Obama and Romney publicly fretting (a first inkling that Dear Monetary Leader Bernanke will eventually change the Fed's 'hard guy' stance with respect to policy), it is time for people who have not run with herds and gotten into trouble, to maintain perspective, strength, patience and a capitalist's attitude for coming opportunity.
This email update basically wrote itself and went to NFTRH subscribers last week. Presented here just FYI:
NFTRH is not a gold letter, a gold stock letter or any other readily definable thing. It is technical analysis, a lot of weird ratio indicators, psychology and a gut instinct by its writer with regard to the markets.
Gold remains a centerpiece of the analysis, but if policy makers are able to will the system to be fixed then NFTRH will become whatever the new reality demands.
…says Gartman. From Forbes entry in the 'Running of the Goldbugs, 2012' sweepstakes:
Well close Dennis. But let's fine tune a little: Unbridled panic-fueled momentum drove gold unsustainably higher as it took a mini blow off and very predictable correction. Gold is not broken in its secular bull market (and not necessarily even the cyclical one out of 2008) by any rational technical parameters. Not as of this writing and thus, not as of your little Forbes piece with the alarmist headline. 'Irreparable technical damage' Dennis? Where?
