It Was the Best of Times, It Was the Worst of Times

We’re all fixated on gold and silver like idiots. The vast majority of the internet elite are now marching out in goose step formation, declaring “how incredibly stupid” gold and silver truly is, when in fact, none of those bozos were saying it two weeks ago. As far as I see it, I was the only one declaring the industry to be a waste-pit of time and resources– and put my money where my mouth was– by selling it short.

But nothing goes down forever, not even solar stocks or bankrupted boat companies.

I curtail your pessimism by the outright purchase of silver miners. They will bounce off your face and detonate on your balls.

Back to your regularly scheduled blog.

These are the best stocks in the market, ranked by my algos.

And here are the worst stocks.

Now have a look at the percentage losses in the silver and gold sectors, over the past week.

Pretty amazing, isn’t it?

The reason why these stocks are getting killed is due to the corrupt nature of gold/silver miners, pertaining to the absurd production costs associated with operations. Let me put it to you this way: should gold dip to $1,200, many of these junior miners will start losing money, crushing their “NAV.” Granted, the “NAV” is a very mobile valuation metric, based upon the whims of spot gold/silver. But it’s worth noting there is a material difference in the way these companies are valued at $1,400 spot and $1,200, almost to the point of absurdity.

Should gold drop another $150 from here, the precious metal stocks are going to be decapitated, revisiting levels you never knew existed, let alone possible. But if the price recovers from here, most names will enjoy 15-30% runs.

That’s what I call fun.

This isn’t an exchange where gentlemen cohort with one another, telling one another niceties and selling shares amongst friends. This is the pits of hell, where everyone is trying to stab the other in the back with knives fitting onto the bottom of soles. There isn’t any clear reason as to why stocks went up 150+ today. It just had to crush and pulverize buyers of volatility.

Gold and silver went up, but the miners suffered–as suspected. You have to understand the supply/demand relationship of the miners, people getting blown out of their positions by margin clerks at 3 o’clock. This is classic liquidation activity and I bought it.

Overall, it was a great day for stocks, one that gives me hopes that the Great Gorilla Cocaine Rally of 2013 can in fact proceed, albeit with caution.

I managed to make very little and find myself in a very difficult/undesirable position. I do not like the stocks that I am holding. It seems I’ve fallen victim to the very thing I’ve been warning others about. Nevertheless, I cannot lament over spilt milk and must press forward, concocting innovative ways to trade myself out of the mess that I am in.

The first order of business is to average down in AG into margin liquidations, then sell into the soon to come rip.

As for GTAT and FRO, I am more than content holding them for several months, as well as HDGE.

I added to my AG position by 1/3rd, buying your liquidation, into the bell.

I’m not so worried about AG. The sector has been blown to smithereens and it’s only a matter of time before it bounces. I am much more upset by the drowning of my GTAT position, which was once up more than 15%, now down 1%.

To blow a big gain like that is almost inexcusable. When I make decisions that haunt me, even after all of my past successes, I feel like quitting. The daily toils of trading takes its toll, as I am managing real money here. I’m not a paper trader, as some of you would like to believe, and I do not run money for my mommy.

The responsibility of building wealth for successful people is burdensome. Generally speaking, people who enjoy success expect top results and they get bored very quickly. Should I underperform this year, I am sure some will opt to send their money elsewhere. It’s nothing personal, just the nature of the business.

Naturally, I am handsomely rewarded for my work, a routine that is mocked by Mrs. Fly, as she tends to value work that leads to paralyzing back and neck injuries, not of the office chair varietal. Nonetheless, I press on, not for the sake of my family, believe it or not, but to realize success.

The term “realizing success” is a general term. For me, success means outperforming the markets and hitting milestones for assets under management. Early on in my career, I was fixed on “providing for my family.” But after awhile, that becomes a given.

Being a finance blogger adds extra responsibility, due to the degenerate nature of man. If I mention XYZ “looks awesome and amazing” odds are a great many of you will follow me in, just like that AG trade from the other day. Believe me, I do not like my trades being cloned by others. I’m not interested in providing financial advice to people on the internet, only share with them my thoughts and tribulations.

Having said that, gold and silver stocks will bottom today, leading to a sharp 10-15% snap back rally. Odds are, I will end up selling AG for break-even, or a small loss. Odds are, I will regret not selling GTAT 15% higher. But that’s the market, unforgiving, relentless in its pursuit for the truth.

Everyone wants to “V-Shape” up, after yesterday’s carnage. More specifically, buyers of gold and silver miners want a sharp snap back rally to allay the pangs of misery that have been inflicted upon them.

As you can see, early on, sellers are controlling the tape. Mind you, these aren’t short sellers, but people who’ve been zeroed out, forced to liquidate their accounts.

Post disaster, you can expect this sort of relentless selling pressure to persist, until the last weak hand lets go.

If you are long miners, refrain from averaging down. I suspect you will get cheaper prices.

As for the market, it might trade up a little. But to be frank, this isn’t the season for cocaine gorilla runs. Without a catalyst, we can drift lower until the market demands even MOAR stimulus.

In the big scheme of things, the market needed a little give back. Let’s hope and pray that the give back doesn’t metastasize into something debilitating.

Today was a unique day for the markets.

Today’s Overall Hybrid score in The PPT closed under 2.50 for the first time since May of 2012. More than that, breadth closed at an atrocious 6.98%– the 11th lowest breadth number in PPT history (2008). Although we are not Oversold on a historical basis, we are oversold on the 3,6 and 12 month algos, truly a rare occasion.

As you can see, the track record is near flawless for this signal, over 9 previous occasions.

Today’s rout in the markets has confirmed the Hybrid Overbought signals that were flagged last week.

Now what?

Construction ETFs are flagging very reliable OS signals and silver/gold are showing record levels of stress. Both signals are highly accurate, especially a historically high score for ZSL, which comes with 18 out of 21 down periods and an average loss of 11%– after the signal is registered.

Enough of what the fortune cookie people are saying on the teevee and internet. The market, as a whole, especially commodity stocks, is deeply oversold.

Over 640 stocks were considered to be oversold today. I can firmly say the market will bounce soon and hard. Those who are shorting now for profit are late. However, if you are shorting to hedge, I support that position.

The stocks that have underperformed most will bounce the hardest. I will provide a short buy list tomorrow, as I suspect the market will open lower.

As a composite, raw commodities are now trading at late 2009 levels, essentially erasing the entire move up since 2010. This is a significant development that marks the end of the commodity bull run. Jim Rogers is playing with his bowed ties right now, not his money.

The Commodity Index inside The PPT is at its lowest point ever, at $82. It hit a high of $147 in April of 2011. So much for long term investing.

The precious metal trade is fairly straight forward at this juncture. It’s either going to fall back in line and respect previous levels of stress, or it’s going to behave like a hedge fund filled with gold bullion just blew up. As of now, consensus supports the latter. However, keep in mind how fast fear can transform into greed and prepare for that eventuality.

I am going to leave this post open all night, covering the Boston terrorist event. I’m not gonna get melancholy or irrationally angry about this event. We live in a violent world, where people want to kill one another, based upon any number of reasons.

At this stage, we can only hope this is an isolated event, although there are reports that there is smoke billowing from the JFK library. If this is an orchestrated attack, expect more volatility and higher gold/silver prices.

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UPDATE: Reports that two more bombs have been found near marathon and a suspicious package at train station near Harvard.

AG, FRO and GTAT annihilated me today. Last I checked, losses mounted above the classic 5% comedy threshold, causing me to shut off my monitor with a punch to its stupid computer face. After “work,” I am sure Mrs. Fly wants to mosey on down to Fortunoff to spend 10k on patio furniture, all the while the acid in my stomach eats away at my organs.

Kidney failure is in my future, caused solely by stress. No need to worry about that, since I have zero issues with snatching someone’s kidney and leaving him in a bathtub filled with ice.

Do you want another prediction? How about this one: the market is gonna bounce tomorrow and I will make back the majority of my shame.

That’s the Pollyanna view point.

The reality is, this is my Normandy and I am a panzer tank operator, hoping to run over a few americans with my treads. I see the stupid americans and their boats and fire at them with my cannons. They’ll never make it past the beach. Us Germans are cool as hell and our leader is a military genius.

I don’t even know why GTAT is down so much. I was prepared for AG, but not GTAT. Do these idiots have gold in their silicon? What the hell is going on here?

The whole planet is stupid and I hope the sun bakes it and we finally morph into venus, 900 degree weather accompanied by zero forms of life.

Merry Christmas, jackass.

UPDATE: A terrorist event in Boston? My day has now been reduced to trivial. My concerns are with the people affected by yet another tragedy.

http://www.youtube.com/watch?v=HUCr-c11dDM

You can’t say I didn’t warn you about this day. I’ve been saying the market was going to “fall into a never-ending catatonic state of oblivion” once tax receipts were collected and earmarked for future expense. I need to be very frank (no hotdog) with you and display my regret on this open canvas.

Knowing what I knew and did what I done, I feel a sudden urge to punch my windows out, commit atrocious acts of unsolicited violence. Granted, I am not a very brawny guy, more on the thin side, although I’ve been adding pounds to the torso as of late. But I was thrown to the wolves as a young child, taught to punch others in the face at the age of 5, practiced the art of sudden knife lunges as a teenager, dodger of bullets as well. My bones are calcified and can break jaws into a million pieces.

So here I am, at the top of my game, triumphant in my predictions and all I have to show for it is an intra-day loss of 4%. Something is wrong with the way my brain coalesces with the rest of my body. Why did I, FOR THE LOVE OF DEAD DOGS AND STEAM FRIED CATS, have to buy AG?

There are parables that need to be read tonight, stories that will scare me straight, steer me away from greed.

Without discipline, there is chaos. Right now, there is anarchy at The House of Fly, papers strewn all over the floor, people crying out loud, arguments to be had. Fights will happen and people will get hurt. This is the result of disobedience, sneering and mocking at the prophecies that were granted to you from superior beings, immortals, the old gods. My fate is frowned upon like the people who make holes in donuts or hedge against inflation.

“Janitor needed in aisle 13.” Time to get my mop and clean up this mess.

I call this one “This Time is Different”

Sale location: Sotheby’s
Starting Bid: $150 billion