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I had a reader inquire on the last posting about the state of some of my favoured (sic) silver-golden children. I speak particularly of [[SLW]] and [[IAG]], of whose Canadian charts, he was somewhat ill-taken. Point of fact, I think he was experiencing some painful reverse peristalsis, to cadge a term.

He mentioned also [[AUY]] but while I’ve spoken of them before as a decent buy and hold, they fall into my “aquiror” basket rather than potential “acquiree,” one and therefore I find them less appetizing.

But still nutritious with regard to a balanced portfolio of course!

Back to [[SLW]] which you all know holds a favoured place in my heart, much like one of my children, save not breathing or in need of sustencance, and quite weighty for it’s size and youth.   Whenever I need some perpsective on these names (or any names, s’truth) I repair to the weekly charts for a more holistic gander.  In this regard, SLW shows us a pattern in good standing:

As you will note, we are consilidating after breaking to multi-year and yes, “all time” highs.  If anything, we’re forming a bit of a handle whilst using the 13-week EMA as support.   Not exactly cause for alarm given the 13-week’s reliability over the last 15 months or so. 

Next let’s look at the weekly for the Gold Man Sacks, otherwise known as [[IAG]]:

IAG may need some time before it  breaks back above that $20 mark that defined its recent high back in November of ’09, but this consolidation pattern is by no means a sickly one.  The 13-wk EMA serves as the stalwart in this case as well, and should be watched as IAG grinds higher.

[[AUY]] is the least pretty, and frankly, its last quarterly earnings report denote some work that needs to be done before it can recapture it’s place of “honour.”  Note the Limbo in which it currently finds itself:

 While I believe this is a decent “buy and hold,” I think AUY likely has at least a quarter or two more to go before it can attempt to break to new highs.  It, too, should hold abover the 13 week EMA, but in this case, the real test will be a break of $13.

Good luck and do not fear, as I believe the dollar will be our friend going forward, in ascendency or demise.

Best to you all.

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One last thing:

Happy Memorial Day to all, and especially to our veterans here and departed, without whom we would never have the pleasure of these inter-tube conversations. Thank you for your sacrifice.

And a special treat — the inimitable Renaissance Man and combat veteran Mark Helprin has a special Memorial Day essay that is “must” reading for all sensible citizens of this great land.

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I’ll be quick tonight with two illustrations which should show why I’m in (mostly) miners rather than physical gold or its paper substitute, the [[GLD]] ETF. 

First, I think we can agree we’ve been in, and we remain in, a secular bull for the precious metals, as this monthly chart on the price of gold illustrates:

Note the four times price appreciation over the eight plus years?   Not bad, huh?  Well, let’s look at the miners over that same period.  Remember, they benefit from what we call “operation leverage,” which means that in a rising price environment, they can leverage their fixed costs and really ramp profitability quickly.

Note the effect in our [[$HUI]] monthly chart:

Note the shorter time period and the far steeper gains?  Note also that the miners have yet to catch up to the recent new highs in gold.   I believe that time is coming soon, and may even be upon us as the dollar approaches a crucial double top area.  

More on that as it develops.   My best to you and your own personal operating levers.

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From Your Biggest Fan!
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Bon soir, mon ami, et Bon Anniversaire! I hope this evening finds you croque’d to the gills on your favourite Bordeaux or Gamay Beaujolais, if you will.

For my part, I intend to eat multiple sandwiches tomorrow in your honour (sic), as it seems like we may have to withstand another drawdown if this afternoon’s last minute plummet and tonight’s weak futures review hold course.

On the good news front, [[GLD]] and [[SLV]] hung on and look to be bouncing with more relative strength than the rest of the market. Some previously beaten down junior minors looked like heroe as well, including [[XRA]], [[GSS]], [[NGD]], [[FRG]] and my favourite, [[ANV]].   Note how ANV kept that uptrend intact on the weekly:

THe daily is less pretty, but still hanging in there:

Keep your eye on the quality, and on that weekly chart.  If we break that line, we will likely see further consolidation.  Right now, both gold and silver are higher even as stock futures look weak.   At some point we will likely see complete separation in trading behaviour.

Best to you all, mes amis.

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Lost My Shirt, Danglin’ by a Thread… Still Got the Girl, For Now

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Just a little bit longer, now I think.

I told you I took advantage of the Bollinger Band crash trade  (thanks for teaching me this, Gary) today when I purchased some kookie SPY calls at 1082, yes?   Well, you can see how that worked out.  But then, these crash trades almost never work out right away, even though they seem to work out over 90% of the time, in the more intermediate-run.  

Point is,  I think we’re pretty close to a bounce,  where I will GTFO of those calls, and hopefully back into some nice dry gold lame suits.

The gold market seems to be holding up okay, and that Allied Nevada Gold Corp. [[ANV]] weekly chart I showed you yesterday is still holding that trend line, if only barely.   The $HUI index also looks  like it’s ready to finish it’s plunge here as well.   Maybe just a little bit more on the daily, here:

Oversold on the RSI, and the stochs are not far behind.   I think the touch and go will coincide with the rest of the market, maybe as early as tomorrow.  Here’s the weekly for perspective:

Still like the bigs, including Goldcorp Inc. (USA) [[GG]] , [[GDX]] and Royal Gold, Inc. [[RGLD]] here, but also Allied Nevada Gold Corp. [[ANV]] , Eldorado Gold Corporation (USA) [[EGO]] and IAMGOLD Corporation (USA) [[IAG]] .    On the silver, [[MVG]] seems to be holding up well.   [[EXK]] took a big dump, as the small caps will do, but I think it’s a bargain hunter opportunity.  Silver Wheaton Corp. (USA) [[SLW]] remains your best buy in the silver sector.

Step slowly, if at all, and I will see you all tomorrow, God willing.

PS — The PPT has been invaluable the past few days.   Fly has been on fire, and he’s even more available and open about his strategy there, away from the leeches.   It’d be well worth giving it a whirl for the summer, I tell you.

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That’s “Loin” not “Lion!” 

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We’re a little bit over a year into my tenure here, and we’ve probably had three or four “one of those days” days since I started. 

Today was one for sure.

This is life in the PM bull, friends, and we should be used to it by now.   I expect we are not fully shaken out, although that over 10% move in the $XAU index today might have scared some people off for the next decade or so.

That said, opportunities abound.   [[EXK]] was even up by the end of the day, and Silver Wheaton Corp. (USA) [[SLW]] filled two large gaps from the prior month’s work.  In hindsight, I likely should have taken the opportunity last week to sell some calls, as I’ve done in the past, but frankly, I was just too busy.   That’s why I choose to play long term secular bulls like the gold and silver markets, however, and that strategy has served me well.

So buck up Cowboy, and get ready for some more bull-riding, pleasant and not so much.   The good news is those with some dry powder can still grab some great names, perhaps as early as tomorrow morning.   I’ve mentioned Allied Nevada Gold Corp. [[ANV]] before (I also like Eldorado Gold Corporation (USA) [[EGO]] here), and you will remember this weekly chart from a couple of days back:

Note we’ve touched that trend line today, as I’d predicted.   We may do so again tomorrow, but that mid $17’s area remains a primo area to pick up some nuggets.  

On the silver side, besides the two I’d mentioned above, I think [[PAAS]] is still one of your better bets, and riding that weekly trendline like a refusnik on the potato line.  

Feel free to stop by here, or The PPT to discuss stocks and trends.  I’m here for you during the roller coaster times.

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We may get some pull back here in the golden markets, as — ironically — the dollar declines and the Euro strengthens. This reversal would be a sign of diminishing panic, and may be taken as a cue for traders to offload some “bunker assets” like gold and silver and lovely platinum, the precious platypus of heavy metals (much like the late Ronnie James Dio, R.I.P.).

But as I said to a faithful reader today — do not forsake the bull for the distress of  an uneven ride.  Bulls can be ornery and force one to pour over the Yeller Pages for the solace of a chiropractor, but they are in the end, powerful avenues to wealth for long term trend traders. Until much further notice, we are in a PM bull, and all eyes should be focused on the quality names.

As a result, I must fall back to Allied Nevada Gold Corp. [[ANV]] again, despite their recent capital raise that has their stock back on it’s (round) heels. Still the weekly path could be no clearer here for those still waiting to participate:

The daily is a little more hairy but describes some nice entries.   I like the 20-day here ($18.64) , but only if it holds like it has been since March.   It’ll be worth waiting for, I think.

On the silver side, I liked [[EXK]] ‘s action today, but I still love Silver Wheaton Corp. (USA) [[SLW]] for the long haul.   Here’s a look at the weekly chart and SLW’s quest for a more tolerant planet:

And here, again, the considerably uglier daily chart, which I believe is still under voice-command until further notice:

In short, I think opportunity will be knocking soon, in it’s best Vince Sham-Wow “Limited Tyme (sic)” pitch guise.   There will be others (for example Cree, Inc. [[CREE]] and Veeco Instruments Inc. [[VECO]]   who shined through today) but these are my two current foundation plays.  

I am leaving Royal Gold, Inc. [[RGLD]] out only because it’s a different royalty animal, but I’d get any of that that was available as well, should we dip on the PM side.

Stay strong, despite the mugfuls of black charnel soap bubbling in your Campbell Soup Kids’ cawfee bowl.

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