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We are either going to bounce hard here, or we are going to be cast into a pit of molten lava, where blood and bone will be cooked to a fine carbon gristle with extra smoke.
And I’m talking about both the SPY and the PM’s here. Both experienced a Bollinger Band crash (violation of the lower Bollinger) and both should rebound here in the next week, at least to the midpoint. In the case of the Gold Bugs Index ($HUI) that probably means the 200-day EMA.
Here’s the $HUI weekly, which clearly illustrates the return to the October breakout. We break here, and we’ll be headed for that long term support line down in the 500 area first:
Now the daily, with the Bollinger Band illustrations:
Does that look like it’s done to you? Me neither, which tells me if we do get a bounce it’ll likely be later morning tomorrow.
Whatever the case, I believe that unless I see evidence of us getting back over that 200-day EMA (above), I will be bringing my core all the way down to 25%, which will be my bull market low point. You should already be at 50%, give or take, in your PM concentrations. This is simply the next step down in raising cash for the coming wave forward.
I don’t know what it means for the SPY, but I don’t expect there’s much left in that rope either, if the dollar continues to strengthen and the financials and commodities continue to get clipped.
On the brighter side, however, I will note that while things look bleak, copper prices have held up well. Our own miners were hurt by today’s rumor of a Marxist nationalization effort in Peru. Such rumors give me good reason to keep my mining holdings in NAFTA countries alone. We are not being paid to take nation-risk here people. Look to Canada, Nevada and Mexico for your long term core holdings.
Last, I say look to sentiment. The last time Fly and I were this conditionally apocaplyptic, the market took off in a blaze of glory. Hell, even Gary Savage is hiding in Switzerland right now. Be strong for me, my friends.
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First?
GDX is like at a all time low valuation to gold….whatever that means, at this point.
Many of the miners got unecessarily slaughtered by that Marxist news today. We are definitely due a bounce. The question remains, how far?
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Not very far.
Since HUI didn’t reach that 200 ema the pit of fire seems likely, no?
Right into the fires of Mt. DOOM is to where Gollum chased the golden ring.
Pretty funny you should say… I found that pic on a website called something like “Is hell real.com?”
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Plutonium, my friends … it’s all in the Plutonium. … courtesy of Fukushima.
Yes, Juicey…
http://www.youtube.com/watch?v=i9a0Q1v93SA&feature=player_embedded#at=110
You from Japan? Sorry for the epic disaster. 🙁
no i am not from Japan. just staying aware of the situation is all.
Good post Jake. Thanks.
Jake, how do you think the market reacts if people really start to get worried about the debt cieling? I mean, specifcally PMs. I was assuming it would be very bullish for PMs, but now im not so sure.
The Debt Ceiling thing is all a big Kabuki theater operation.
I pay it no mind.
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Bukaki theater.
Aargh. You had to go there, didn’t you?
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Actually I’ve never been. 😉
Fuck gold. It’s all about Bitcoin these days.
Those are awesome; just heard about them for the first time a few days ago. Creating currency from what I assume is object oriented programming…awesome.
Bit-coin, just what we need… more ether-based currencies that go bye-bye upon the first EMP flash.
Thanks, I’ll keep me doubloons as my “bite me” coin.
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Can’t be much less stable than making money out of cotton.
I know it sounds painful, but that pit of fire you posted looks so damn pretty.
Don’t get too entranced, there, Smeagol.
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Nibbling at QRM here (6.76) … if this isn’t the bottom (6.50-6.75) then I will add more at $6 and then $5.40 if we get that low.
Waiting for Benjamin “Dr. Death Dollar” Bernank to see what he does to the buck.
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Not much I assume … I wonder if there isn’t a disconnect as the market has sold off concurrent with a move in the $ from 76.5 down to 73.5 … Odd, no?
IDK what’s coming in the next day or two, but I suspect the dollar will find strength soon and we will get the more reasonable deflationary period that is the logical consequence of all the froth in the system. SPY, GLD, SLV down over the next couple months. If we are lucky enough to see this then the buying oppty in the pms will be juicy! here’s hping for a bath in molten lava. it sthe only logical outcome at this point. Too bad logic is absent form the markets.
I’m sure seasonality could kick in too.
I was a bit surprised to see Alphadawg decide to go all cash and treasuries today and sell his gold holdings after buying a short time ago on the general thesis that gold was a safe haven play.
As for the $HUI, I’m giving it a longer leash before I sell trim my PM ETFs – If it breaks the 510 area and can’t recover I’ll reduce some more.
OEW Update on Gold:
http://caldaro.wordpress.com/2011/06/07/gold-quick-update/