Yogi Berra once said, “It gets late early out there.” It sounds funny, but Yogi was – as usual – clear, concise, and tersely brilliant. When he said that he was referring to the way the shadows crept across the Yankee Stadium grass, during World Series day games that extended into the late afternoon and changed the dynamic between the pitcher and the batter. As the pitch was delivered from the sunshine bathed pitcher’s mound on its way toward home plate and into the shadows provided by the Stadium’s façade the hitter had even less time to react than they normally did.
We realize it’s not yet March, but market action continues to suggest “it gets late early out there,” too. For example, on a y-to-d basis NASDAQ is down -12%, the NASDAQ 100 is down -13%, and the S&P is off -8% and all three trade like they will break beneath their respective Jan 24 lows (13095, 13725, and 4223). At least that’s what we’ve been going with.
Opposite to the overall bearish stock action (w/ in the S&P only 33% of the stocks are up in 2022), is the continued bullish action in commodities. And in the last few days even gold – which was one of three commodities we monitor to not participate on the upside in 2021 – has commanded attention, “Bling, Yo!”, with moves above 1850 and 1875. Gold is really the King of Commodities in that it is, nearly always, the first commodity out of the gates in a broad commodity advance and there’s likely never been a commodity bull market without gold participating. Recall that gold broke out above $1350 in summer of 2019 and then pushed higher through the end of 2019 and into the summer of 2020 when it recorded a new all-time high. It’s true that gold was equal parts correcting and somnambulating until quite recently but, while its price action was agita-inducing, we prefer to believe that it was BASING and hiding in plain sight.
Thankfully, gold equities are now participating on the upside. For example, the Philadelphia Gold & Silver Index is up 8 1/3% in 2022 and an index we’re calling BAANG is up 9% in 2022. BAANG, in homage to FAANG, is comprised of Barrick Gold (GOLD), Agnico-Eagle Mines (AEM), AngloGold Ashanti (AU), Newmont Mining (NEM), Franco-Nevada (FNV), and Gold Fields (GFI). We realize we’ve got an extra N in our acronym, but we think it’s important to include FNV in the mix.
BAANG – Weekly Chart w/ 40-Week Mov Avg and Weekly MACD
There are no way investors are late to this move as the weekly MACD is still not even in positive territory. Please check further below for our Technical Scoring results for the 30 components of the Phila. Gold & Silver Index. We really like Barrick Gold (GOLD), Newmont Mining (NEM), and Gold Fields (GFI).
The chart here shows BAANG relative to NYFANG and the nice, rounded turn in the BAANG / NYFANG ratio plus the fact that BAANG stocks are improving on an absolute basis and NYFANG stocks are weak and, we believe, will weaken again says to us that it’s a good idea to have some gold equities / gold exposure in your portfolios.
