I was beaten like a silver gong today, and Mr. Market is telling me in not so polite terms that I’d better get the hood up on the convertible before he starts raining golf ball sized hail on my head.
I’ve been busy here so I don’t have a ton of time for comment, but suffice it to say, until further notice, we are in bunker mode. That means I will be hedging the JCHP with double and treble ETF’s in order to make up for any downward motion in the silver and gold plays. As well, I may either cut back severely, or totally eliminate certain positions.
Natural Resource Partners LP [[NRP]] is an example. I am keeping it right now, even though it is down more than 10% since inception because it carries a high dividend yield (almost 9% at inception, higher now). However, I may get rid of it if it dumps below $20. I may also take this opportunity to lard on some [[SMN]] or other appropriate short shields. I will definitely add [[TZA]] — the triple short small cap — at the open for instance, since I bot some just before the close today for my own portfolio ($24.92)
I think we’ll probably get a bit of a bounce tomorrow, and I’ll be taking that opportunity to move into cash and some hedges, as I don’t think this is over. If it’s just a short term blip, so be it. We can scale back in when the ground is safer. In the meantime, protecting principal (and gains) will be the paramount idea.
I’ll update the JCHP later tonight.
Update: One thing to keep in mind is that the US Gubb’mint needs to sell over $100 billion in bonds this week. You think there might be a reason to jack the price of Treasuries [[TLT]] for such selling purposes? Remember, Goldman sells these things for them.
Update: Here’s yesterday’s ugly Jacksonians. I just picked up some TZA @ 24.85 (yes, lower than yesterday’s entry) for insurance:
| Name | 19-Jun | 22-Jun | % Change | Comments | |
| ANDE | $ 28.61 | $ 28.45 | -0.56% | Spent most of the session up | |
| EGO | 8.20 | 7.65 | -6.71% | Broke $8 support, next at $7.19 | |
| GDX | 38.39 | 35.74 | -6.90% | Broke TL barely, needs to get back to 36.75 | |
| GLD | 91.90 | 90.54 | -1.48% | Also broke TL, needs to see over $91.50 | |
| IAG | 9.36 | 9.04 | -3.42% | Also beneath TL, needs $9.35 | |
| MON | 80.73 | 78.12 | -3.23% | Still on trend, needs to stay over $78. | |
| NRP | 21.99 | 20.60 | -6.32% | Sell below $20.00 | |
| PAAS | 18.93 | 18.02 | -4.81% | Least banged up silver today, still above TL | |
| RGLD | 43.08 | 41.12 | -4.55% | Still above TL, 38.2% fib @ $39.50 | |
| SLV | 13.99 | 13.54 | -3.22% | Still above TL til $12.87 | |
| SLW | 8.63 | 7.97 | -7.65% | Right on long term TL today, gotta bounce here. | |
| SSRI | 18.92 | 17.56 | -7.19% | Still on long term TL til 16.50, could get there. | |
| TBT | 54.34 | 53.28 | -1.95% | Could easily get back to 49.25 before bounce. | |
| TC | 10.54 | 9.40 | -10.82% | Sell all on a break of $9.25, 1/2 on gap fill 10.38 | |
| TCK | 16.54 | 14.57 | -11.91% | Sell below 14.35, long term TL @ $12.50 | |
| AVG (daily) | -5.38% | ||||
| AVG (monthly) | -12.15% | ||||
| AVG (inception) | 9.39% | ||||
| Cash ( 000’s) | $ 4.61 | ||||
UPDATE: The following astounding link should be clicked by all. Keep in mind that The POTUS just asked that the Fed be put in charge of MORE of our financial system, and then watch this.
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Remember, gummint needs to sell bonds this week.
I believe the Stones said it best…
“I was bitten by a boar
I was gouged
and I was gored”
I went almost completely to cash today as I can not find any chart, other than the US dollar, that I find favorable on the long side. The market will need a lot of “show me” to get past the World Bank number. The US dollar looks crappy and looks like it should resume its downward trend in a few days to maybe 2 weeks. That said, with the growth story so bad, precious metals may not attract much support from that near term.
I’m looking to short off of a bounce, preferably after the Fed announcement Wednesday. Ben has tried to financially assassinate me before so I want to give him a wide berth. I think we sustained real damage today and have farther to run.
I watched today’s action mindful of your positions. Ouch. I missed $20 on silver thinking it was going to $50. Three weeks ago I sold some when spot was $14.65. Most people thought I was an idiot. $50 may be on the horizon but $40 for ’96 silver eagles is as close as I’ve gotten so far.
BTW, the big banks were lighting up the most active list, and they were all down. Bad omen methinks. Whoever said the pump would continue just long enough for new stock offerings may have been correct.
What is the size of the negative correlation of the spx- market to gold? Strange that they both take a dump together. Can anyone make sense of this.
Scum- Agreud.
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Gold itself was not down that badly. Just the miners.
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On the that silvery note: I don’t mean to brag but… oh hell, who am I kidding? I am going to boast like Devildog when he gets his 1 correct guess out of 1000 calls.
In May, on this very blog, I pointed you lot (E8 in particular) towards buying First Majestic Silver(FR.to) when the hocus-pocus comex price of silver passed $14.10 USD/oz. If you listened you made the 15% I surmised, even more if you held on awhile longer. If you didn’t get greedy, like I suggested you don’t, and you ran after 15%, like I suggested you do, you are still holding it. Again.
Still batting 1,000 on my calls on ol’ IBANKCOIN.
MB I should make a guest appearance on the PG, I will title my ouvre “Quality vs. Quantity: Zen and the Art of Trading Account Maintenance”
The hits for silver keep coming:
http://globaleconomicanalysis.blogspot.com/2009/06/mama-takes-kodachrome-away.html
Thinking of moving to NYC?
Fugheddaboudit!
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Scum… if you think Kodachrome going away is going to effect the silver markets any more than it did ten years ago when digitals became the rage… well, my dear…
As a side note, however, I am irked that Kodak would just let this film business dissapear w/out trying to sell it. If I were a shareholder I’d be pissed (isn’t Paul McCartney a shareholder? Maybe we need a new song to protest).
I mean, the brand name alone is worth a couple hundo million.
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Note: Jacksons updated. Sorry for the delay.
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Scum… if you think Kodachrome going away is going to effect the silver markets any more than it did ten years ago when digitals became the rage… well, my dear…
Yeah, I see your point, fundamentals mean jack in this f@cked up market. It’s all about the speculation. [/sarcasm]
No douchette, what I meant is that the “silver-leaving-photographic film” story has been out, and incorporated into POS for over ten years now.
Try to stay within eighteen months of us, eh?
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Interesting, we haven’t been this oversold on the SPY since early March.
Still some room to go lower on the stochs, however.
Also, we are just up against the downtrend of the $VIX right now, and coincidentally, testing the break of the uptrend line broken on May 19th, and since broken a number of more times (as the $VIX fluctuated around the uptrend), the most recent being on 6/19.
We are now firmly below it, but pushing up against it and the downtrend line started on 10/23/08 as I type.
Anything above $32.10 on the $VIX would be very significant, imho.
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jake – howard will buy it!
Boom — you mean the Kodakchrome brand?
Shit, someone should. No joke, on of the greatest wastes of capital in the U.S. is brands that are allowed to disappear without sale.
Think about how much dough Kodak sank into promoting that brand.
Reminds me of the “Great Securities Firm Swallow” of the last ten to fifteen years (and some farther back) where great names like my own First Boston, Dillon Read, EF Hutton, Paine Webber, Alex Brown (at one time the oldest independent, since eaten by Deutsch Bank), Montgomery Securities… I could go on all day.
And that’s just securities firms (where of course ALL the assets, save the dough, are intangible).
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Gold, silver and platinum all just turned up after flabbling around down about 1/2 % each —
Gold: $924.50 + $2.70 (+0.30%)
Silver: $13.85 + $0.10 (+0.72)
Platinum: $1168.90 +$1.80 (0.15%)
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Hi
I think that this down turn is healthy for a long rally. I agree that there is room to go down still,
and I think that we`ll be seeing a lot of “Cup with Handle” patterns (or any other bulish pattern) forming in every sector very soon.
Try to stay within eighteen months of us, eh?
I’m two years ahead of your douchewadliness always.
Lol — that’s just as bad, Scum.
See Tim Knight for reference on people who were “right, but early.”
You still end up poor.
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Mastr — I agree to a point. There are still a lot of long term trends intact, but there’s more pull back to touching those lines again.
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Death to the portfolios of those who would invoke Jackson’s name but are instead whores of the lowest degree:
http://globaleconomicanalysis.blogspot.com/2009/06/us-approves-imf-gold-sales-what-does-it.html
Lol — that’s just as bad, Scum.
Really? Got bunker?
I tend to agree w/ Shedlock here:
Reasons To Cheer IMF Gold Sales
1) If the IMF wants to dump gold in favor of paper assets diminishing in value over time, it’s fine by me. I hope they dump it all. It will reduce the amount of meddling they can do down the road.
I’ve stated exactly this when the IMF gold sale was brought up on this blog the first time.
Seems goofy to exchange gold for paper when one is a bank that needs reserves exchangeable at a constant rate into almost any currency, but wtf do I know? Eff ’em, and may they sell ALL their gold for shit paper.
The sooner we’d be rid of them.
2) IMF gold sales are a bull market phenomenon. The UK dumping gold at $250 marked the bottom.
I remember that header… it was back in ’01, I believe. I was still buying physical at the time. When it got to $400, I thought that was it. Sigh.
3) China is a possible recipient of the gold. If the real reason for this move is to allow China to get rid of some US dollars or treasuries in return for gold I view that as good thing.
I don’t, strictly from a protect my own ass perspective. But you can’t blame the Chinese for trying to protect their own.
Bretton Woods II is coming to an end. That we know. What we do not know is the timeframe or the replacement. However, China may need to accumulate gold for whatever the next agreement might be. IMF gold sales may be a small step down that path.
Small?
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Gold is consolidating recent gains now. Bear in mind that March to August is generally a seasonally unfavorable period. That is not a prediction of a further pullback, although it is likely. Further consolidation is a good thing that will add fuel for the next leg higher
Sorry that last bit above is from the website, still and not my words, though I tend to agree.
I will put out the latest JCHP tonight. I have a “function” I must attend right now and won’t be back til later.
Suffice it to say, I sold one more third of TC today (on the break of 9.25) and 25% each of both EGO and SLW so I could raise cash to buy the 10k of TZA I needed to hedge.
All that’ll show up in the chart tonight.
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I’m holding all my positions. Will buy more of some, when I get some more cash.
My one big regret is that I did not leg in more slowly, and I knew this was coming. Gio even told me 1/4 postions at a time, and I heeded that warning for so long and then went and screwed up again.
Second time I made this same mistake. The first time was ignorance, this time was just plain stupid, not getting into more slowly.
Not the companies I bought, but how I bought them.
Pretty good post. I just came across your blog and wanted to say
that I’ve really enjoyed browsing your blog posts. Any way
I’ll be subscribing to your blog and I hope you post again soon!
http://www.youtube.com/watch?v=ujhdf9_IO4w
Jake, i have attached a link from Eric Sprott latest update, he has some very good views, he is a goldbug so there is a bias but makes some great views, and bullish for TBT http://www.sprott.com/Docs/MarketsataGlance/June_2009.pdf
not a bad link for Scotia’s daily PM technicals… but there are tons like it out there…
http://www.scotiamocatta.com/prec/pdfs/pm_daily.pdf
Chanci – Don’t feel bad, I still do the same thing myself.
This bull will make all those “high buys” seem like nothing in good time.
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Sarah — Thanks!
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Scum — thanks for the tunez. Classic.
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308 and RHill — thanks for the contributions, I’ll have a look. I think TBT is the pick of the decade, as you know…
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New post, btw ————->
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