A Silvery Opportunity

Several weeks ago I warned the canaille of impending doom to be savagely imposed upon gold and silver traders. These men were prancing about the market place without shield, sword-less. Since then, these slack-jawed catamites have beeb arrested, left to die in a catatonic state.

When someone perishes on Wall Street, opportunity presents itself for the vultures safely perched above, watching scenes of tragedy unravel.

I give you “Death by Silver.”

Gold and silver are now trading inverse to Application Software stocks, as unbelievably stupid as that might seem. The layman, you, your friends, parents and smartest relatives, are victims of algorthimic order flow, originated from the JP Morgan Bank vaults, located 5 floors below 45 Wall. This is specifically designed to subtract dollars from your brokerage accounts, a modern day “planned shrinkage” assault upon the Third Estate.

I am sure by now, I’ve lost 95% of the readership. Let me get to the point.

Here are a few silver stocks that might be worth buying for a bounce, and their 2 week percentage losses.

CDE -16%
SSRI -16%
MGN -14.4%
EXK -12%

Gold

TRX -17%
DRD -17%
HMY -14%
SA -9.5%
IAG -9.3%

Separately, all coal stocks appear to be headed into the toilet bowl, down into the sewers, with most names off by 15-25% in the last two weeks alone.

I know the market appears to be constructive now, especially since we’re near new highs and all of the high beta stocks are rallying again. However, as of now, we are simply dead cat bouncing. The reason why I can say that with absolute certainty is because it’s true. The biggest losers over the past three months are now the biggest winners. All you have to do is screen for stocks down more than 30% over the past 3 months, and layer atop of that some technical factors and price action magic and voila: you have yourself a nice winner.

Be on guard for false breakouts.

As of now, I am still in the camp that this is simply a respite, along the lines of 2000. This is the bounce after the dip. We will rally until late June, then sell off through July. The market will, once again, rally in August, topping out in September, then enter a most horrendous and miserable Samsonite Hamburgalar bear market through December.

I can only hope to recover half of my losses, realistically. Perhaps by August I will be in a position to short stocks and double my gains as the market vomits on itself, salvaging my year. There is a long road ahead of us. Try not to let your weak-minded emotions get in the way of seeing things clearly.

NOTE: The PPT‘s 7 day hold on the QQQ’s, which was closed out yesterday, was sublime.

The only way to overcome a massive deficit

Congratulations to me: my year to date losses are now just 29%.

Thanks to the move in XON, I’ve cut down my losses to under 30%, which is entirely woeful by any standard north of Mexico. Go ahead and short the markets. Fall victim to your own idiocy, tricked again by the action in TLT. Let me remind you that TLT is going up because of foreign money and not because we are heading toward catastrophe.

Right now I am focused on two stocks: XON and JAZZ. I am looking over my lists (extra Santa) for new stocks to buy, ones that go higher and make people rich. As soon as I figure this stuff out, you’ll be the last to know.

Ciao.

I have a true story for you this morning. My window cleaner texted me this morning, complaining about the stock market and how it keeps making all-time highs despite the economy underperforming. He’s a gold guy, Tea Party extraordinaire, hater of Obama to the third degree. Guys like him, and Rick Santelli, would love nothing more for the country to burn under the leadership of Obama. It would justify their missing out, so to speak, on one of the greatest bull runs the market has ever known.

My response to his text isn’t important. What is important is the wall of worry that we seem to overcome each and every time the market runs into a snag. This time the depths of the decline in some of the high tech stocks was a little more worrisome than previous declines, causing a full Edward Longshanks rout of the sector. Lo and behold, all appears to be good now. The weather is getting balmy. Restaurants are buzzing and people are getting drunk again.

Gold and silver stocks are placed back into the ‘fag box‘ and WDAY beat earnings again, for what is probably a record for any single management team in the history of publicly traded companies.

I’ve upped my risk profile a little bit and hope to take some short term profits soon. I am not going to just sit back and watch my positions climb or drop. I intend to be very hands on with my holdings, as it is the only way for me to outperform the market.

I’m expecting a little profit taking this morning, followed by a late day recovery. We should post another up week and continue to rally from now until late June.