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First, let me tell you that I am a happy and contented boy this evening. You know this PM game.  Heck, even Le Fly asks me at times how I deal with the convulsions of this lightly traded, lightly regarded sector.  Sometimes it’s not very easy, as you all know.

But the irony remains.   Despite the tremendous, gut-wrenching, teeth swallowing, soul-crushing volatility of this sector, it’s the only one to be in a bull phase over the last ten years.   True, we got a serious “blip” when the whole market folded in late 2008, but that was truly a liquidity-driven event,  separate from the fundamentals of the space.  What’s more, that down-draft was the trading opportunity of a lifetime.  I still own a good portion of the SLW I picked up under $3.00, and that was just one of the gems I found abandoned on the ground in January-February 2009.  You know the story of the Jacksonians from May of that year, when I first started blogging.   Those positions are up hundreds of percent, and I had bought them months before.

Enough idle boasting about the past.   We’re talking about good feelings today, but we’ve endured scars together too.   We’ve undergone a dreadful PM pullback, one that cost me over 15% of my portfolio value, even with cash-outs.  But I’ve been waiting, very patiently, because I had no doubt this bull was not over by any means.  And today I think we can say that at least in the near term, “the coast is clear” for further miner purchasing.   And I plan to make up for lost time as well.

First, let’s see the good news on our friend Baby $HUI:

Given that many of my “in-house” miners– Jacksonians and high flyers like EXK and AG have rocketed up on an RSI basis in the past few days, I think it may not be the best time to buy tomorrow.  This is true as well of my PM Stock of the Decade— XG,  or Extorre Gold Mines. which was spun off from parent company Exeter Resources (XRA)  at the barely substantial price of $2. Yes, $2, back in late March of 2010.   Look at this beautiful company today, a scant 16 months later…

Look at the charts of the strongest Jacksonians and you will not even see the equal of XG.  It was the one precious metal stock in my entire portfolio that did not see a pullback of any substance over the last three months.   That in itself is significant, I believe.

In the meantime, do not be a horse’s ass and buy this tomorrow.  Clearly, it’s overbought, probably because it never got oversold, like it’s poor compadres.   I have indicated above the place where I’d like to add.  And yes, I already have a shitte tonne, but there’s always room for pie, right?

Most stuff is overbought here, but on the radar for tomorrow are some small jumpers — MGH, BRD, AUQ, NXG, CGU, AZK. I also added to my GPL and AXU hordes today.

Best to you all.

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Otto’s Family Picture

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Today was a significant day for the silver miners. With the death of Prince Otto, the word was sent by carrier pigeon to Mr. Bilderberg and the Illuminati that they could once again indulge in the precious metal trade.  Obviously they took that word to heart, especially in the silver section, with the more sedate Jacksonians like SLW and PAAS up 6.26% and 3.20% respectively, and the silver miner ETF– ticker symbol SIL— up 4.29%.

Even more stunning were the pocket rockets.  Of course the double raw silver ETF, AGQ, was up almost 10%, but some of the small miners did even better. My second largest silver holding  EXK, was up almost 12%, while AG and MVG were both up over 8% each.   Even ANV, the  mercurial Jacksonian gold stock, got in the groove, with a move of over 6.72%.

Even more promising was the chart damage today’s moves did on the silver bears.  AG is the cleanest example:

EXK had a similar breakout today:

I love how these rockets are leading us up like they usually do.  I am not, however “all in,” yet, as the $HUI continues to bedevil me by refusing to resolve itself.   The 50-day still remains a micro-hair above the 200-day EMA and they are flattening to a needle point.

My one consolation is that we’ve finally closed above both key EMA’s at $528.42.  That’s noteworthy, since we haven’t been above either one since early June.  Stay tuned tomorrow for some follow through.  I may even expend some cash.   I’m looking at EGO and CDE to continue moving higher tomorrow and to the end of the week.   My top pick for tomorrow, however, is GPL.

Tally ho!

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Indeuuuuuud!
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The last of the Hapsburg Empire has taken his leave.  Harbor no belief that the positive action on gold and silver today is unrelated.  As ancient and corrupt medieval empires crumble into the sea, the strongest of civilization’s institutions remain standing, anchoring our economic and social order.

Note Prince Otto’s obituary’s first lines…

Otto von Habsburg, who has died aged 98, bore the oldest and most eminent dynastic name in European history and could, according to genealogists, trace his ancestry back to the sixth century. The pretender to the defunct thrones of Austria, Hungary, Croatia and Bohemia (now part of the Czech Republic), he pursued a democratic postwar career as a member of the European parliament and a fervent advocate of European union.

A fervant advocate of European Union?  Imagine a thwarted emperor advocating that?  One wonders what Otto’s countrymen, Hayek and Von Mises would have thought of all that?

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All of the Jacksonians and other gold and silver dreams are celebrating the Fourth Of July, seemingly independent now of the dollar’s flux, up over an average of 3%.   Favored Jacksonian’s SLW, ANV and EGO are all up over 4% as of this writing, and EXK is up over 9%.  Still, our friend the $HUI is having troubles breaking that near-term barrier at around $528, so we are not yet out of the Austrian woods, so to speak.

More on that tonight.

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Interesting that it took us only six days for $HUI to move back to support and re-test the lows of the other day.  Interesting as well that the miners held support despite the lower values of both underlying metals (Silver and Gold).

Let’s have a look at that chart again:

Let’s not quibble, here… we again stand on the edge of the knife.  Note how close we are to a 50-200-day EMA cross over. That would not be a good sign for anyone, and we are going to need a heck of a rally to pull those two nearing lovers apart again. RSI continues in our favor– if only moderately so — even as the slow stochastic is pointed firmly in a southerly direction.

I’m not going to vacillate here.  We should be ready to cut our positions to where we are comfortable with another 50 point southerly move in the $HUI. If we break support at $494-5 or so, then I think we will be headed that way.

All that said, today’s postive divergence action in the miners may indicate at least a short term bottoming in the downward action.  Our trusty negative ETF for silver — ZSL — has registerd three “overbought” days in a row on The PPT.  This is unprecedented in the history of The PPT, albeit a relatively short data set.  We also saw the iShares Gold ETF (IAU) show up on the Wall Street Journal’s Buying on Weakness charts, along with both GG and SLW — two very popular miners in gold and silver.  All of these indicate an appetite for miners that may be setting aside the current fluctuations in the underlying metal.

What’s apparent, however, is that we will know very soon what direction we are going in.   We cannot remain at the support level forever.  We shall either fail here, or make another attempt at the 200-day EMA.   The action from there will determine our more intermediate term prospects.

Keep an eye on the Dollar Index.  It looked sickly again today, and if it breaks down through that $75.20 support, we may have “game on” once again in the shiny metal sector.

God bless.

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[youtube:http://www.youtube.com/watch?v=W773ZPJhcVw&feature=related 450 300]

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Flying around the Central Mitten today via large American Sedan, one cannot help but be astounded by the plethora of funnel clouds in so many seemingly peaceful rural burgs these days.  If Mother Nature cannot leave lie a town known for 361 days of Christmas (despite its Mary Shelley-esque name) and not one but two Wiener Schnitzel Emporiums, then I just don’t know what the world is coming to.  I tell you, if this road trip gets any more adventuresome, it may take me four days to hitch hike from Saginaw all the way home.

Things were no less tornadic in the precious metal miners markets today, with that rally off support finally coming through for us:

Even more mucho blasto than Baby $HUI, however, were my faithful Jacksonians, with SLW, EXK, ANV, PAAS, SSRI, EGO and even TCK up anywhere from 5% to 9% today.

And not to be overly boastful, but I thought it quite shiny that my final call of yesterday’s post — that laggard AG would catch up to it’s brethren in rapid fashion — came through like a dolorous Dakota Fanning in a crying scene, to the tune of almost 11% in cash gains.  Note the chart, and the accompanying caveat:

Note well my easily excitable Adderall dependents — one strong day does not a rally make.  As you can see above, many many of our Jacksonians are banging their heads on 20 and 50-day EMA’s.   I would not be surprised at all, therefore, to see a pullback from these levels, and perhaps one all the way back to the 500 level on the Baby $HUI.

Most likely we’ll see the most trouble at the old breakout line on the $HUI — at $519 give or take a smidge.   Be aware of your levels and do not get caught flat-footed.   In the meantime, silver still looks like the recovery drug, although traditionally hot money gold plays like ANV (up 8.83% today) are coming in close behind.

Be safe out there, and keep your helmets on.

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Nothing much moved today on the PM side as the market collectively held it’s breath waiting for The Bernank’s do-nothing address. That speech, in turn, resulted in a massive shrug of the shoulders after market close today.

There’s some chop back and forth and further attempts upon my person in the form of certain “Chicken-playing” PM stocks (ahem, AAU and EXK, damn you!). These stocks attempt to force me off the road by driving straight at me at 110 mph, whilst drunk on Old Crowe whiskey.

I will not be moved by such crude tactics, and I continue to beleive there will be a bounce in the metal sectors collectively. Action in the minor metals like palladium and platinum are betraying this new direction, and even copper is showing stubborn signs of staying about $4.00.

In the meantime, dollar strength is seemingly being abetted by a weak Ozzie Dollah and Canuckistanian Looney. That too simply cannot be the basis for a dollar rip, so sorry. Not for the long term at least.

So just check yesterday’s chart for tomorrow’s action, as nothing looks very different. On another note, you may want to inspect the FAS-mobile tomorrow as well, as it looks like banks may be ready to roll once again.

Best to you all.
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