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Fibonacci Analysis

We’re all Goldiggers Now!

[youtube:http://www.youtube.com/watch?v=REYOJDANQ0k 450 300]

(Remember when Kanye was witty?)

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We’ve finally done it…  we’ve broken into “free air” on the Miner’s Chart — the venerable $HUI Gold Bugs Index.   Come see it for yourself:

I did a lot of things today in celebration of our free air moment.   First, I covered quite a few of my hedges in ANV and SLW and GDX, some at a loss some at break even.  The ANV was particularly egregious, but we’ll try not to dwell on that.  I still have about a 20% hedge on SLW and about 30% of ANV still hedged.   You’ll note the overbought stochastics and relative strength indicators on the above chart, I’m sure.  That’s my reason for retaining a little hedge.

But let’s not kid ourselves, the dollar is busted, and headed all the way to Target #4 without even a passing “hey howaya?” to Target #3.  Cheggitout:

Sure, we may get a little bounce at $77, but look at what happened after that last bounce.   No, I think the dollar is dead as Jacob Marley on burnt toast.

So please, get out of any silly short positions you may be contemplating “holding out” for.  There’s far more easy hunting out there than going after an Alaskan grizzly with a plastic butter knife.

In addition to releasing most of my hedges today, I also doubled down on an initial IAG long call position (DEC $17.50’s) at $1.60 a piece today.  My original purchase of 80 was at 90 cents each.   I expect IAG to be over $20 before Santa arrives.   I also added a touch more EXK, which was gluttonous of me.  I now own more of that than I even do SLW, though the share price is lower.

Of course, I think EXK will be the next SLW, so there’s a method to my sleep deprived madness.  I also really like RGLD here, and it looks like it’s ready to launch once again.  

My best to you, and to yours.

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Time to Wap the Insano Pinata

[youtube:http://www.youtube.com/watch?v=2uVXQ6P6UqE 450 300]

Breaking Footage from the new iBC documentary: “Perdy: The Origins”

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Do you think it will just be silver and gold that will go dotty when the dollar implodes?  Let me disabuse you.  It will not be so.  It will also be platinum and palladium, petroleum and berillium, cadmium and radium, even guar gum and Bubble Yum will be breaking out.

Better yet, there will be a metal that shines like silver, mines like gold, and — as a bonus– makes the urinal shadows go away even faster than a pack and a half of Kools and a cold cold Olde English 800. 

That metal is lithium and it’s “rare earth.”   Not only is it great for curing insanity, but it’s almost as famous for powering cell phones, stock trading robots and small chassis time machines.   What a versatile mineral, and our friends down at the Sociedad de San Paulo own it in abundance. 

Let us give alms to SQM, then,  as it consolidates that move above it’s all important 61.8% fibonacci support line.   Let also that line be your guide for closing out your investment.   The targets are just as clear in the near term.   The weekly chart reveals:

My best bet is to wait for the break at $43.87, but then, I already own this name, so I would just be adding.   You make your own choice, you’re old enough for that now, no?  Beware the slightly overbought condition, and have patience.  You will be rewarded, I’ve no doubt.

If you can’t bear to keep away from the precious medallions markets, then GSS, RBY, BAA and EXK are four smaller friends that you could look at in a small way, on a small scale, with a small cheese wedge lodged in your wallet to prevent excess de-levering.   All show some promise and may continue…

Best to you all, and gute Nacht.

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You Have Questions for the God-Emperor?

God Emperor of Dune
Don’t dare ask me about the dollar, small pleb!
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Quickly, quickly now, as the spice melange takes maximum hold…  I shall reveal the revelations of the spice dreams as controlled by special Bene Gesserit training taught exclusively to me by Madonna.

First, I reiterate, with cement-like, no…concrete-like certainty, the devolution of this market will be marked by the application of much spice melange to my upper respiratory tract, especially my nostrils, where it is most tasty and vision-producing.

I envision our dollar to be entering some significant retrace territory on the weekly chart here, and soon, trouble:

As you can see, we are not yet oversold on the weekly (we should not be as we bottomed a mere two weeks back), but we are approaching some significant Fibonacci retrace levels at 61.8% of the latest large drop from the March to December ’09 period.

Not coincidentally, that huge dollar drop brought us our relief market.   Now I think she gets ready to drop once again, as the dollar “recovery” continues to weaken at the firm but effeminate hands of Ben Bernanke.

The dollar daily is even more immediate:

As you will note, on the daily, the Gom Jabbar  lies even closer to the neck of the weakling dollar, as it is overbought already after a mere 11 days since it’s last bottom-scrape.    A mere word will bring it to it’s knees, and I think that word is “Fibonacci.”

Or it could be “black candle,” even though that’s two words, technically.

No matter, gold held fast today, and as I commented to M. Le Docteur earlier today, whenever gold and the dollar rise simultaneously, it usually means one of them is about to break.   Today, the dollar blinked first but recovered.   The rest of the week should tell our tale.

In the meantime, gold and silver miners may continue to consolidate here.  While you are eating that sandwich and waiting for them to break out once again, take a gander at ANDE, the old Jacksonian agricultural stalwart.   I expect MON to recover here with the rest of the ags as well.

May the great red beard and moustaches of Frank Herbert bless you all, and good night!

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Thoughts from a Midwest Hotel Room

 
Tbone

“Heart Attack on a Plate” — Nom! Nom! Nom! Nom!

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Seared, medium rare dry-aged New York Strip (12 oz) is very good for a special occasion.  As are gargantuan prawns with hot hot blazing hot chunky horseradish cocktail sauce.  As are “tomatahs and motzz” (sic) w. heirlooms and hand made mozzarella. 

And let’s not forget a flagon of ruby red claret to wash it all down.

But only every once in a while, or that stuff’ll kill ya.

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Speaking of “you only live once,” (I know you just said it), I think that’s what we’re looking at here in this late summer coiled up rocket rally.  It may flare out and die, but I think it’s just as likely to continue to unfold into the early autumn (!!), and here’s why…

We’ve talked sentiment, and it was hang over the banister and puke ugly here about two weeks back.  As ugly as it’s been since before the March ’09 phoenix run.    Sentiment is still bearish — note how many skeptics there are, even among the storied stock pundocracy? 

We’ve talked dollar, and it continues to melt here.  Down another 22 cent (sic) today, to $83.43, I don’t think we see relief til at least $82– the 200 day EMA.

Now let’s talk our market leading Trannies ($TRAN).   They continue their stealthy moves after the non-confirmation of the February lows a few weeks back.   Now the weekly has them taking out a significant fib line — 61.8% — after bouncing at the 50% retrace.

If we hold above that fib line this week, we could be heading all the way back up to the top again on this coil explosion.

And let’s not forget the Grandaddy (Mammy?) Trannie — UPS, the Men in Brown.  This is another long term hold of mine, and it’s like XOM or CHD — always reliable.  Check how it’s testing the handle formation here, and keep an eye on where it goes.   Given the similar stochastic formulation to the $TRAN above, I see a similar breakout coming:

In other news, the PM’s just stood there, which is fine, and MON is busting the heck out, up another 4.5% to $54.61.  I may have to look at this one again for you, with gladness in my heart for those desperation buys in the low fitties and high fowties (sic).

I’ll be busy all day tomorrow, but will try to check in.  Best to you.

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Off to Transylvania!

Kate B. 

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No, it’s not what you think.   I’m not packing the goats and chickens (I have a head chicken, I’ll have you know) and donkeys up for a caravan trip to Romania, even though that’s the legendary land that spawned Vlad Dracul.

Otherwise known as “Gapping and Yapping.”   No scheiss, join The PPT and check it out.  He’s the real thing.

No, no plans for Romania, just yet.   Instead my title refers to the oft-promised Dow Theory Analysis of the Transports that I’d mentioned over last weekend.   Despite the hotness of yesterday’s gold pick [[BBA]], I will digress in a wood less traveled by, and momentarily  talk about the Dow Transports and how they are giving us nice signs, despite the prevalent gloom and doom.

The Transports, as I’ve mentioned before, are the key to the Dow Theory.   If they do not confirm, then there is no bear… yet.    And thus far, the Dow Jones Transportation Index [[$TRAN]] has not confirmed a lower low vis-a-vis those February lows which we made on the SPY recently.  Note how the weekly shows the non-confirmation:

As you can see on the weekly, the Trannies have gotten back above that very important 61.8% Golden Ratio Fibonacci Line.   I believe that line will serve as support, even if we enter into a temporary oversold condition here, kudos to The PPT.

On the daily, it’s a similar exercise in rebuilding:

 

We’ve had five days of nice solid recovery, the last two of which have broken that downtrend line with some vim.   Though today connotes a bit of oversold-ness, I’d contend we will find some support on that downtrend line, and better, that the Transports will lead us higher again.

Before you give me a rose tiara and call me Polyanna, please recognize there’s only one reason for the stock market to be rallying right now, and it stems from the sound of that “clacking” that you hear even more disinctly than the Vuvazellas (sp?) contributing to the beehive noises at the World Cup. 

Remember that dollar weekly chart from about a week back?  Well, coincidentally, Old Uncle Green-backs is still following that script… I touched nothing on the narrative here, just updated the chart itself…

I think we’re headed into more dollar doom.  Probably not all at once, but herky-jerky, back down the pike.  That means inflating asset markets, no matter what the CPI says.

Act accordingly.   And for goodness sakes, get into The PPT so you can tell your grandkids about saving their college tuituons.  Best to you all.

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UPDATE:  Drunken Dem Congress Critters Gone Bad!!   Time to Retire This Fist-First Nut,  Tarheels:

[youtube:http://www.youtube.com/watch?v=_oqIP9yagkQ 450 300]

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Summer Scirocco

[youtube:http://www.youtube.com/watch?v=vSwJlv0Bljg 450 300]

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Let’s not forget what it’s all about, okay?

What’s that? You forgot?

It’s all about “Quantitive Easing,” the jim-fuggery way of saying, “printing zeroes, lots of ’em, to get us outta this perma-jam til we think of somethin’ better!”

Know this now and forever, however:

There is no Recovery Only Zuul, and Zuul is cents on the dollar, which is going to turn back to its old ways here, soon enough. Or sooner. Look where we are on the monthly which gives a nice ten year plus eyeful:

 That  38.2% fibonacci retrace line illustrated above is a Golden Ratio line — one of the strongest (along with it’s inverse 61.8%) in the psychologically uncanny mathematical metric .

Not unusually in the least, that same exact line shows up — almost to the penny — in our weekly chart as well, this time as the 100% fibonacci retrace in the intermediate term.   Note —

So, as the activity in gold and silver, platinum and even oil and the lesser metals to some extent (TIE, RTI)  has been telling us for about a week now, it looks like “they” — the Fed, the ECB and the Japanese MOF have been hitting the liquidity enema solution one more time.  

That’s one big hammer Bernanke is flailing about.

I sure hope he doesn’t hurt anyone.

Best to you all, and stay with the rockets.   Also, GSS and EXK looked good today. 

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