The recent Herman Cain political ad features his chief of staff smoking a cigarette and blowing it into the camera in a close-up shot. Until recently, smoking cigarettes was widely accepted and accommodated virtually everywhere in America, with smoking allowed in airport lounges, aboard airplanes themselves, inside Michael Bloomberg’s beloved New York City bars, restaurants, and even in college classrooms. Recently, there has been an understandably strong backlash against smoking, given the obvious health issues associated with both first and secondhand smoke.
Despite that, smoking continues to epitomize the essence of “cool” in movies and television. If you disagree, check out the GIF above of Robert DeNiro’s Jimmy Conway character in Goodfellas (1990). That particular scene, in which he stares down a man he wants to kill, with Cream’s “Sunshine of Your Love” blaring in the background, is not nearly as poignant and memorable if he is not intensely inhaling that cancer stick. Besides, have a look at the stylish film noirs from the 1940’s and 50’s, with Humphrey Bogart or Edward G. Robinson smoking cigarettes, or the World War II hero coming home from the front line, hooked on smoking three packs a day. Looking at current movie stars smoke cigarettes today has me thinking there exists a certain sense of nostalgia about yesteryear and the idea that, perhaps, America’s greatest days are behind her, occurring in the middle part of the 20th century. In other words, smoking cigarettes is a slice of Americana, dating back to the Jamestown Settlement. And that is coming from a non-cigarette smoker (I smoke an occasional cigar).
Speaking of nostalgia about America’s greatest days, those old-fashioned government bonds caught a nice bid on Monday, as reflected in the chart of TLT below. After a straight drip down to its 50-day moving average, I believe Treasuries should give us some great insight the rest of this week as to whether they are on the other side of the mountain, or rather we are going to see another leg higher in this powerful bull run.
There has also been much written about “correlations” between asset classes, with traditionally a strong Dollar and strong Treasuries equating to the quintessential risk-off trade of stocks and commodities heading lower. However, both gold and silver saw impressive action on Monday alongside Treasuries. The Dollar was rather flattish, all things considered. So, it will be interesting to see if the aforementioned correlation becomes untangled, and precious metals rise with Treasures.
Either way, it is tough to ignore the strong buy volume that accompanied gold and silver’s rising prices, as well as many miners, on Monday. They both look eligible for long swing trades here, albeit with the headfakes we have see out of their respective ranges over the past several weeks. Nonetheless, upside confirmation over the next several days should put the precious metal bears on the run in a major way. My top two gold miners here, with respect to the technical setups, are BAA and EGO.