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One thing I have learned about many stock market bulls is that all they care about is the Nasdaq. They’ll ignore everything else; as long as the Nasdaq looks decent, they will not worry about anything.

So, in 2021 when the internals of the market went into a sharp decline, they ignored it. When the real estate market went down in 2006 and 2007, they ignored that, too. And now there are signs of a sharp economic slowdown coming, and they appear to be ignoring it. Banks crashed a month ago, and they do not care. They think it means nothing to them, because the Nasdaq has been fine for the most part.

But, now the data shows that, in the last two weeks of March, credit conditions tightened up so fast that the amount of money being lent out by banks slumped at the sharpest rate in history.

“Commercial bank lending dropped nearly $105 billion in the two weeks ended March 29, the most in Federal Reserve data back to 1973. The more than $45 billion decrease in the latest week was primarily due to a a drop in loans by small banks. The pullback in total lending in the last half of March was broad and included fewer real estate loans, as well as commercial and industrial loans,” reports Bloomberg.

Of course, this news will take time to have a measurable impact on the economy when it comes to jobs and GDP growth, but it is still a sign of a sharp sudden slowdown to come. Bulls don’t care, because they are fixated on playing a “Fed pivot” rally, and they will continue to buy until that move ends.

What this means, though, is that this is a rally that one has to understand is a trading rally and not an investing rally. To invest, you have to play moves that are part of rallies in deeper, longer-term, upward trends. That means looking outside the Nasdaq and at other things, such as gold and silver, that are poised to benefit from the underlying macro environment.

My favorite indicator when it comes to them is the GDX/GLD ratio. This is a simple relative strength ratio that compares the price action in big-cap mining stocks to the price of gold. It’s important, because the price action in big-cap mining stocks tends to lead gold prices. When this ratio goes down, it’s typically a sign of a coming top or a decline in the price of gold, but when it goes up, it means you are in a confirmed bull move for gold.

And that is what is happening.

Gold and silver are simple things to buy and hold in a portfolio now, with ETFs such as GLD, SLV, PHYS, and PSLV. Gold is less volatile than the US stock market, and it even has been outperforming it for over 15 months now.

Mining stocks have recently been soaring the way that big tech stocks used to do. Take a look at AngloGold Ashanti Ltd. (AU), which I own, for instance.

Also, here is a look at Harmony Gold Mining (HMY).

Both of these stocks have already more than doubled since October. Barrick isn’t as up as much, so this one has an entry point on it with a stop loss at around $18.00, where it’s 50-day moving average is.

I own Barrick Gold, too.

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