Interesting Indexes

Some indexes are beginning to show real signs of life.

Brazil's Bovespa has broken a downtrend and Bollinger Band, so I'm looking to buy on dips.

Gold miners have been putting in an uptrend longer than any index I cover. With so much political uncertainty, I can't say I'm surprised. Nevertheless, stay cautious if you're looking for "safety".

Maybe the insurance business isn't dead after all.

Silver continues to put in a nice basing pattern, which suggests another buy on the dip opportunity.

The USD has shown its first signs of weakening. Hopefully this sucker won't go straight down.

Bulls continue to have something to cheer about as a return to risk emerges from this battered market. Buying dips in commodity markets making technical breakouts is an old trade, but it might be coming back en vogue, at least for a bounce. Since we're in a bear market, stay flexible, and expect a good deal of volatile sideways consolidation.

Tale Of The Tape

This market continues to exhibit an upward bias, so keep buying the dip. Risks remain high.

The markets haven't looked this bullish and stable since Obama was elected.

The spread between Buywrite and Buy 'N' Hold indexes made a new low and violated the lower Bollinger Band, signaling a potential trend change.

The falling spread between US Equity and Bonds indicates an increasing appetite for risk.

The Yen vs the Dollar continues to look strong. Though it is a bearish trades, it hasn't suffered in the recent rally.

The McClellan Oscillator is overbought by recent historical measures, but we're in unprecedented times.

Shorting this market is suicidal for all but the quickest. Ride the wave up, but know that it will come back down. I'm interested in accumulating breakout stocks on pullbacks, so I'm not bottom fishing. I will hedge by getting long SKF or buying Yen.

Who Is Antal E. Fekete?

"Red Alert: Gold Backwardation!!!" screams the headline of a Doomsday piece by a fellow I've never heard of. Antal E. Fekete, a professor of something in Canadia, has noticed that the future price of gold is lower than the spot price. He has concluded that there is as SHORTAGE of gold, and that we must BUY.

I'm an idiot, so anything you glean here is entirely suspect. Nevertheless, I'm gonna go out on the limb and note the obvious. One, Antal E. Fekete is an anagram for "neet fake tale," and two, it is better to bet against his advice by holding dollars (for now).

Proposition one needs little explanation. Like the current backwardation of gold, it is a fact of nature. Part two is a little trickier, so I'm gonna keep it brief. Behold, the relationship between the price of Gold and the US Dollar.

Nothing in the past 3 months indicate that the the dollar is falling relative to Gold. I'm suffering recency bias, but you can only trade what you see. Moreover, futures trading below spot indicates a SURPLUS of contracts as miners sell the rights to their product. Nevertheless, the possibility that the CONTRACTS are worthless still looms, and thus the allure of holding physical gold technically remains, right?

No. Gold will also be absolutely worthless when the shit hits the fan. You can't eat, drink, smoke, touch or fuck it. It sure is shiny, and other people want it, but if global commerce ceases to exist, your gold won't buy shit if there is NOTHING. Everyone holding gold is a speculator as it no longer serves as a currency, we have electronic 1's and 0's for that.

Personally, if things really get out of hand, I will do as my country does and sell weapons to a neighbor for US Dollars (or Amero's). Seriously, I'm looking into a Federal Firearms License, and clearly it's easier to run from crying mothers with a fist full of Franklin's than bags of gold bullion.

To Mr. Fekete (if that is your real name), I hope you are egregiously long gold, 100% correct, and subsequently capable of bailing me out when I'm wrong. If it turns out that your kindred are selling gold and spreading malicious rumors, you are a genius, and because America is great, you will be tried by no one but yourself.

Finally, in defense of my straw man Antal, I quote him thus, “a man-made risk is not a valid matter for speculation; only speculation on risks caused by Nature is valid.” If you believe that, you should avoid trading in the markets and shun human contact. The distinction between man-made risk and Nature's nebulous, so indiscernible, it may not exist.