______________________________
It’s quite likely I’ll start to unwind my hedges tomorrow… especially those covering my PM and commodity positions.
It’s hard to discard the evidence that’s popping up all around me. Yes, we’re overbought like a mother, and yes, we’ve not had a cycle turn in 44 days. However, I’m seeing precipitous increases in my hard asset positions that point to increased currency devaluation insurance being purchased across the board. The dollar has not yet broken down, but the metals are being bought in big, breakout ways, visible even in my longer term weekly charts.
Here are three alone that start with “T,” — and what’s more, none are even precious metal plays. My Silver Wheaton Corp. (USA) [[SLW]] ‘s and IAMGOLD Corporation (USA) [[IAG]] ‘s are a story unto themselves. I will likely start rolling back into those tomorrow as well, but for now, let’s look at these steel-related commodities…
First up is the old weasel Titanium Metals Corporation [[TIE]] , which I’ve bot many times in the past, only to be disappointed. It’s been earning merit badges these last three weeks, however, and looking like it wants to get back in the Troop:
As you can see, this should go to $17.50 relatively quickly (dare I say after a pullback to that consolidation breakout?), and the next major resistance is very close to $30.
Now consider our Jacksonian non-PM friends. First, the frisky Thompson Creek Metals Company, Inc. [[TC]] :
The volume from this week just cannot be ignored (especially given it’s only Wednesday!), and this Jackson looks like it’s only now getting it’s legs for a larger launch, likely inflation fueled. $16 is an easy target, but long term, she goes to $24, I think.
Last, let’s look at fellow Jacksonian Teck Cominco Limited (USA) [[TCK]] , which seems to be finally breaking out of a minor consolidation after a very quick spurt from the depths of despair back in March ’09. This stock has come a long way from well below $5, but I think it’s got some to go as well:
As I mentioned, the price of gold and silver and the actions of [[GDX]] and Baby $HUI today also give some assurances with regard to my silver and gold positions. While I will hope for some more pullback here, I will not expect it, and I will likely start pacing back up to “full position” in those names again as we go forward this month.
Best to you all.
___________________
If you enjoy the content at iBankCoin, please follow us on Twitter
Quick note on IAG…CEO strangely and unexpectedly announced his resignation a few days ago. No warning, no prior notice:
//NEW YORK (AP) — Canadian gold mining company IAMGold unexpectedly announced Monday its CEO will depart effective Jan. 15. President and CEO Joseph Conway, who joined the company in 2003, said in a statement he agreed with the board that it is “an appropriate time for me to step down as an executive of the company.” The company has started a search for his successor. Peter Jones, a director, will be acting CEO until a permanent successor is named.//
Any thoughts?
None besides “very odd.” Doesn’t seem to be affecting the stock price much. I’m wondering if he was caught shagging his secretary or an intern or something….
____________
I concur. However, I do expect the pullback in commodities to shake out weak longs and offer a 2nd entry. It’s in the playbook. I’m legging in. Give me the ball, coach.
I keep expecting the same. No longer banking on it.
_______
TCK – although I like the MA support, it looks tired like an Ed Hardy tee.
It’s up %1300 since March. I’m sure it looked tired many times in that time period….
That’s why I’m using the weeklies on these.
_______
I’ve reached similar conclusions last night while looking over charts. The dollar index bounced back up to 78 this morning. At this point, it looks like just a better point to go long on metals in general.
It’s funny how quickly one’s opinion changes in this market. A new high on the dollar index is just $.50 away, so it’s a fairly tight stop from here.
Cuervo —
Pulled this (very recent) comment from two posts back. Operational suggestion — In future, if you want to make a “late” comment that actually gets read, you are better off just copying the subject to which you were referring and dragging it to the “latest” post. Luckily, I caught this one before it rolled off the “latest comments” list.
______________
To the comment:
What I find interesting is that if it were the States about to issue bonds in another currency you would have folks like ‘Doom Doom’ Denninger all afrothing about the end of the US Peso however, Canadian markets took it with a sort of ho-hum attitude.
Well yes, but you are not comparing apples to apples, however. Since the US dollar is the de facto reserve currency, it would be pretty alarming to the bond buying markets if we issued in anything other than our sovereign currency.
Because the looney is not a reserve currency, however, Canada has the luxury (much like a large American or multi-national company would) to issue in other more liquid currencies like the yen, dollar and euro.
What Canada is doing, really, is making their bonds more liquid by issuing them in a currency that is more fungible across the globe.
The US could not take that excuse, so if they did it, everyone would consider it irrational.
___________________
Dollar strengthening, glad I held off with my PM rebuys. I’m of mind now to just wait until friday afternoon and see what shakes out. I have to say, short term I’m pretty confused about possible direction. Which means the fewer positions the better.
Could be the Greek chickens are coming home to roost. Seems the Icelandic ones already are…
Not Just “Bjoork Music” lowered to Junk Status.
We won’t default! We sweah!
________
“Thanks for the $6 bil. Give it back? No, I don’t think so. How about sometime in 2050?”
Curious about that new avatar… is that a blue jay that ran into a window or something?
_______
It’s a sea slug called the Dragon Slug. I know I’m just a common garden variety invertebrate, but I decided to go all fancy on youse with my avvy.
Now it’s gone!
__
I posted that from work, I forgot to log into that gravatar thingy. Notice the underlines in the name… So despite greed pushing me to buy in, I held off with any purchases today. Gonna wait til tomorrow. I’d have a good laugh if the dollar took off and crushed all the bulls. Did you notice bears are disappearing faster than donuts at a diabetics convention?
Treu. Thing is, we may only get a brief contraction here, given the lateness of the cycle.
______________
I just bought a book titled “Why Iceland?”, entirely on the utter crash of their currency and markets following the financial crisis. I’ll let you know if it’s any good.
Consequentially, I’d still be interested in purchasing some icelandic bonds and currency. I’d prefer to pick up stock in some of their companies, if I could find any on an exchange that are still being traded.
I think most institutions with exposure to icelandic shit just threw it into the third tier to be forgotten until later this decade.
I could not be any less impressed with that pic above. Chick looks like a guy who went to my high school.
However, after doing my own cursory search, i see that (surprisingly) finding a hot babe in a metal tee, is not that easy.
Is PCU on your radar?
That’s one of those fake-oid vintage tees. But Megan Fox is hott. Little J and H got “Emperor Strikes Back” tees of similar provenance for Christmas, btw. They are “all the rage.”
_______________
PCU is also a bit overbot here, and needs to break 36.39 to be playing music, but I think it’ll do fine long term.
I like BHP better, though.
________
started PCU @ 35.40 and ZINC @ 13.10. Good luck to all.
Is GLD overbought? Should I sell now and re-enter later? – young grasshopper
a) Yes, and
b) I wouldn’t bother. GLD is not that volatile (compared to the miners, for example), and it’s a great “core” holding to act as ballast for the rest of your PM portfolio. I don’t see it plunging from here, so I wouldn’t waste the tears.
_____________
Natgas looks like a decent entry on this pullback. It ain’t getting warmer…
Agreud!
____
Jake what’s your best educated guess on what would happen (and why) to commodities if Fed starts increasing interest rates early?
“early?”
Depends on what you mean by that… but interest rate hikes should mark the demise of all asset bubble markets, including the commodity ones.
Why? Because we’re not yet in a sufficiently stabilized economic state to withstand a more expensive price for money.
That, and I’m pretty certain a large part of the recent commodity rise haa been due to cheap money.
__________
Thanks v much for the prompt answer. But one thing that has me confused — interest rate hikes will end cheap money, ok, I get that, and that affects commodities negatively. But if one believes that the hikes won’t stop inflation wouldn’t it be prudent to buy the same commodities?
Basically, if one believes that the Fed’s interest hikes are in time and inflation is controlled, then they will sell off. But if one thinks Fed can’t stop inflation, commodities are a buy?
Well, commodities will have run up quite a bit by then, as the Fed is always reactive, not pro-active.
So it’s pretty likely that the commodity bull (already around for a while now) will be pretty long in the tooth by the time the Fed starts messing with our punch bowl again.
You are correct that a single raise will not immediately stop inflation, but generally it will be a signal that the party is soon to be over.
______________
I promise last questions — and where do you think we are in this commodity bull run? In the middle or somewhere close to the final stage? And does this mean you would be out of your golds/energy names by the end of the year IF the Fed starts raising rates then?
Oil already had its run, so it’s doubtful it will lead this next stage. I think the PM’s take the fore this time, maybe with certain other metals like moly and titanium (odd, no?).
Natty, coal and sugar should do well as well. I think gold could go over $2k without much trouble, which would be huge for the mining names.
___
The gov’t wants inflation. We can’t afford to pay our debts without creating a lot of money. So, in dollar terms, commodities may have a long way to run.
Bottom line is that pols here, in China, in Korea, in Japan are all the same in that they tend to be short-term oriented and all have a vested interest in shoring-up this house of cards by financing our consumption; they know that our money is shit.
I’ll get bearish on commodities if Chinese citizens start marching with pitchforks on the Central Committee demanding that they stop financing our consumption …or if cannibals start roaming the streets reducing demand by other means.
little bumps in rates will not change the long-term picture for the dollar nor for commodities priced in dollars.
Right… it will take some egregious Volkerian rate raising to kill the inflation they are brewing now.
Thing is, I don’t think they have the balls to raise rates even a little bit. We may need to actually reconfigure the currency peg to fix this one by the time all is said and done.
_______________
Oh shit, Jake, I just caught your comment on one of my old posts, asking if I thought my hypothetical new bank could escape regulation from the Fed.
My understanding has always been, with the exception of laws that apply to anyone who lends money or engages in banking practices, as dictated by Congressional law, what gives the Federal Reserve particular regulatory sway over most banks is that they accept FDIC conditions. I said that if a new bank were to emerge right now and refuse this service while pushing for small business as clientel, they would have a considerable edge and be able to take a great deal of market share.
Do you think I was mistaken in this? I’m sort of presuming that the Fed is limited in its regulatory power; I was under the impression that you had to sign onto the FDIC and agree to a number of benefits/regulations in order for the Fed to have direct control over your actions. If that’s not the case, then perhaps this theortical commercial bank would have to be more of an investment bank.
Yeah, I’m pretty sure that any depository (ie, takes deposits) lending institution has to be regulated by at least state banking regulations (OCC at fed level), and that there wasn’t much leeway to escape that. It’s all covered at the charter level, which is basically a license to be a bank (fractional lend, ie, “print money”).
________
so long, Jake. I’m going to take a vacation alpha-dawg style. i’ll let you know how “Winter’s Tale” ends up. Cheers!
Hammy
Are you going on tour? God bless, and keep you safe, kid. All the best.
_______________