Gold Miner Newmont Shines Amid Rising Government Borrowing And Spending

To gain an edge, this is what you need to know today.

Necessary Antidote

Please click here for an enlarged chart of gold miner Newmont Corporation NEM.

Note the following:

• This article is about the big picture, not an individual stock. The chart of NEM is being used to illustrate the point.
• The chart shows the rise in NEM so far this year.
• The chart shows the upward trendline in NEM stock.
• The chart shows the gap up on earnings.
• The chart shows negative divergence in RSI. This indicates internal momentum is slowing as the stock price rises. In our analysis, this is a negative and indicates the probability of a pullback is high. As full disclosure, NEM is in our Portfolio.
• It is no secret that reckless government borrowing and spending continues. Prudent investors wanting to protect their wealth for the long term need antidotes to reckless government borrowing and spending.
• Durable goods came warmer than expected. Here are the details:
  • Durable goods came at -9.3% vs. -11% consensus.
  • Durable goods ex-transportation came at 0.2% vs. -0.2% consensus.
• President Trump’s visit to the Fed yesterday was dramatic. It is yet to be seen if the visit will result in a rate cut when FOMC meets next week.
• S&P 500 has just traced the longest series of records since December 2024. As is historically the case, investors suffer from recency bias. After the streak just experienced, almost everyone expects the stock market to go higher. Think of a boat where everyone is on the same side. Nothing bad happens until a storm hits, then the boat can capsize.

Magnificent Seven Money Flows

In the early trade, money flows are positive in Apple Inc (AAPL), Amazon.com, Inc. (AMZN), Alphabet Inc Class C (GOOG), Meta Platforms Inc (META), Microsoft Corp (MSFT), and Tesla Inc (TSLA).

In the early trade, money flows are negative in NVIDIA Corp (NVDA).

In the early trade, money flows are neutral in SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust Series 1 (QQQ).

Momo Crowd And Smart Money In Stocks

Investors can gain an edge by knowing money flows in SPY and QQQ. Investors can get a bigger edge by knowing when smart money is buying stocks, gold, and oil. The most popular ETF for gold is SPDR Gold Trust (GLD). The most popular ETF for silver is iShares Silver Trust (SLV). The most popular ETF for oil is United States Oil ETF (USO).

Bitcoin

Bitcoin is seeing selling and has fallen below the first support level.

Our Protection Band And What To Do Now

It is important for investors to look ahead and not in the rearview mirror. Our proprietary Protection Band puts all of the data, all of the indicators, all of the news, all of the crosscurrents, all of the models, and all of the analysis in an analytical framework that is easily actionable by investors.

Consider continuing to hold good, very long term, existing positions. Based on individual risk preference, consider a protection band consisting of cash or Treasury bills or short-term tactical trades as well as short to medium term hedges and short term hedges. This is a good way to protect yourself and participate in the upside at the same time.

You can determine your protection bands by adding cash to hedges. The high band of the protection is appropriate for those who are older or conservative. The low band of the protection is appropriate for those who are younger or aggressive. If you do not hedge, the total cash level should be more than stated above but significantly less than cash plus hedges.

A protection band of 0% would be very bullish and would indicate full investment with 0% in cash. A protection band of 100% would be very bearish and would indicate a need for aggressive protection with cash and hedges or aggressive short selling.

It is worth reminding that you cannot take advantage of new upcoming opportunities if you are not holding enough cash. When adjusting hedge levels, consider adjusting partial stop quantities for stock positions (non ETF); consider using wider stops on remaining quantities and also allowing more room for high beta stocks. High beta stocks are the ones that move more than the market.

Traditional 60/40 Portfolio

Probability based risk reward adjusted for inflation does not favor long duration strategic bond allocation at this time.

Those who want to stick to traditional 60% allocation to stocks and 40% to bonds may consider focusing on only high quality bonds and bonds of five year duration or less. Those willing to bring sophistication to their investing may consider using bond ETFs as tactical positions and not strategic positions at this time.

Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.

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