It is not satisfying just because this new subscriber has nice things to say about
NFTRH, but because this gentleman had been involved in the markets (PM's in particular) for years before ever hearing of me and immediately 'got' what it is I am trying to do.
"This is exactly what I was looking for" means that he was looking for a hard worker who really has no more answers about what will happen than anyone else, but is committed to doing the work - both in the big picture and in the interim smaller pictures - that is required to keep the ship right, no matter how choppy or turbulent the seas. He is looking for unbiased dedication, not to join a win or lose battle of one ideology over another.
The work goes on because it's all I know how to do and I invite people who want to manage risk while positioning to be strong for what I believe are outstanding future opportunities to join me. His note reproduced with permission:
Dear Gary,
I
started my subscription just two days ago, but already feel
comfortable with your style of providing timely input of
clarity, that outlines the trigger points, the tolerances
and the upside and the downside, thereby providing your
subscribers with the tools to decide whether or not to adjust their
positions depending on their own investment
/trading/speculative criteria. This is exactly what I was
looking far.
For your info, I am fully
invested in precious metals and have been for 14 years. I am
80% invested in the physical and 20% invested in the PM shares. I
have very vivid and painful memories of 4
Q 2008 and have my figure [finger] on the trigger to sell 66% of my
shares if I feel that there is a serious chance of the HUI
falling to the low XXX's. My finger has been on the trigger
for weeks now, and if I do pull it, I want it to be using my
head and not my heart, and this is where I find your input
most useful.
Many thanks, and please
do not change your style.
With my best
regards,
James G
I think his mail came in response to my almost guilty sounding requests for people not interested in 'in-day' events to please tune out the noise of those type of updates. The 'in-day', 'in-week' technical work is gaining popularity with many current subscribers. Down the road when I have full time to devote to it this will be formalized and spun into another service. But this 'Morning Notes' style update is even more important and it comes with the regular
NFTRH subscription:
NFTRH Update - Morning Notes
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 Mar 23 (5 days ago)
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I
look forward to a time when you and I are not in such intimate and
frequent contact, because that will mean we will have established a firm
direction. Until such time, we manage the market.
Sentiment
is bleak in the precious metals. Beyond bleak really, as I am finding
out anecdotally that a high percentage of PM players (and I am talking
professionals, advisers, etc.) are under extreme pressure to puke.
Somewhere along the way (not sure if it was in an NFTRH or an email
update) I mentioned that Brent Cook said something in an interview like
'everybody's under water on their gold exploration / resource stock
holdings'. I thought that was a strange assumption to make at the time,
but from around the spectrum I am hearing something similar, now
encompassing the entire gold stock sector and even creeping into gold
itself with the growing 'end of the bull market' talk.
There is real pain out there and a 'puke point' is looming.
Sometimes I feel a little uneasy being the [pick one: hesitant,
cautious, hype averse ney sayer] guy during the euphoric, endorphin
releasing upside events that have come before in gold (most recently
last summer) and will likely come again. It does not win me friends
when I poke fun (or worse) at the gold bug captains and actively avoid
any 'precious metals genius' clubs that send me a membership card. It
also does not win subscribers when putting out cautious commentary (
To the Newly Minted Gold Bugs)
at potential points of change, like being risk vs. reward bearish as
the hype blew out last summer and risk vs. reward bullish, like now.
It seems like many market players (and esp. PM players) want to be
tended and reinforced in their beliefs rather than challenged and made
to consider a wider perspective. So be it. I am not saying I have
called everything soup to nuts, as you have seen me screw up (esp. in my
own trading) enough times. But I hope that NFTRH is providing a tenor
that is somewhat in line with the market at all times. In need of
tweaks or adjustments here and there, but generally on the big story.
Okay, enough [navel] gazing. The attached weekly chart of HUI has
continued to degrade this week. The target of 450 (38% retrace of the
entire bull run out of 2008) is looking like a magnet. Will it stop
there? Do we really care? Well the answers are "I don't know" and
"yes", because the analysis will have to incorporate a loss of 450 if
this level breaks down. If 450 breaks down, the next target is XXX (50%
retrace). Of course there are support levels to be managed all the way
down to the XXX measurement target off of the topping pattern. The
pattern will become activated if we do not either rise right this moment
or get a quick capitulation dive to 450 and near immediate reversal.
Has capitulation already come about? I continue to lean toward 'no'
because the HUI-Gold ratio has not yet pinged .27 (though at .28, it
sure is close), BPGDM is at 24% instead of the gut wrenching target of
around 5 to 10% and gold itself is still at 1645, with the weekly EMA 70
still viable at XXX. Yet on February 29, there was significant
downside volume in the metals and miners. This was a 'kickoff', not
capitulation. The volume that followed was pretty intense and has been
leveling off since, even as prices have declined. Considering that the
entire correction was in my opinion - and you know I am not prone to
letting conspiracy theories color the analysis - manufactured by the
people reworking the US Treasury yield curves, I wonder if a the kickoff
volume is really all we are going to get. How much is left to be
puked?
Still, it will be best to operate slowly and carefully going
forward. I am personally using one little gold stock, Keegan Resources
(KGN) as an indicator. In 2008 NFTRH was able to add it for net cash
value, substantial gold resource given away free as a bonus. At last
check, KGN's cash hoard was around $3/share. So is Keegan at 3 bucks
the bottom? Don't know, but I'll add to the recently reestablished
position at that point because it would indicate irrational bearishness
along the lines of Armageddon '08.
Side tracking to gold for a moment, to answer what seems to be a
frequent question on the minds of PM players, there is the potential for
a bullish Inverted H&S-like pattern on gold. I still dispute the
terminology that most TA people use though, as an Inverted H&S
technically should come at the end of a downtrend, not at a top. Same
thing happened in '08 however, and we all know how that pattern
resolved; mega bullishly. There is bullish potential for this one
(target XXXX), but I'd call it more of a 'Cup' than an H&S.
Whatever it is, the right side shoulder can start forming right now or
it can form at XXXX. A break below XXXX.XX (the would-be 'Head' at the
December low) however, blows up the pattern and gives credence to the
people calling an end to gold's bull market. In this scenario, Ben
Bernanke wins, he can indeed control the yield curves and thus he can
indeed control us; take a blue pill, sleep soundly. I am still munching
on red ones. I like the taste.
This is not easy, but who ever said it would be easy? Indeed, I
have long felt that the next major leg in the gold stocks - if we are
still correct to expect one - would be launched out of loathing and
fear. Thus far we have managed the 1.5 year long agonizing
consolidation 'Handle' as being the provider of that loathing. Now, our
maker (market maker, anyway) is calling us to consider more dynamic
possibilities. In another nod to subscriber and blogger Doug (Monty
High), I just do not know what is going to happen. Nor do I feel any
need whatsoever to try to guess.
We are following a progression, trying to remain strong and also
being open to the idea that none of us has the ultimate answers.
Functionally, at this time I would rather start seeing some signs of a
bottom (either a dynamic 'V' or a more drawn out rounding process)
amidst constructive sentiment before making major additional
commitments. The sentiment part is already there, but some of the worst
declines - and capitulation - can happen from already suicidal
sentiment backdrops. I would rather do additional buying higher, or at a
'puke point'. As to the latter, if it is in the cards, I think we will
all know it if and when it gets here.
Have cash, have patience, have balance so as to remain strong.
Regards,
Gary
http://www.biiwii.blogspot.com
http://www.biiwii.com
http://www.biiwii.com/NFTRH/subscribe.htm
We have talked about the topping pattern on the HUI/GDX, which everybody sees on the weekly charts. We have talked about all sorts of other ingredients to the current stew, first among them being suicidal gold sector sentiment.
