[youtube:http://www.youtube.com/watch?v=7x60uLIfHJk 450 300]

Classic Dawg

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Beaten, bludgeoned, and swallowed by an African Rock Python (only to be regurgitated, and then beaten again), I stand before you gob-smacked and riven.  I’ve been selling off in drips and drabs this week, in anticipation of a pullback in the gold market, and a lesser refrain in the silvers.   I guess I should feel relieved I got rid of some exceptionally over-weighted positions in some super-volatiles like AAU and AG.

I had even  sold some RGLD yesterday — ever so reluctantly.   It’s a testament to the kind of day I had when my losses in RGLD were some of the lowest of the day at a mere 4.54%.   Many of my juniors were in the 10%+ loss range, with my beloved EXK leading the pack of ass-biters at a loss of over 14% by day’s end.  In the end, I guess I feel a bit lucky that — thanks to my increased cash proportions and my tiny hedges on SLW — I only lost a tad more than 7% for the day.

But let’s not kid ourselves, this was a shock and a murder, and I left myself vulnerable when I should have been hedging.   I know now that when my “Spider Senses” are tingling enough to make me want to cut back on some heavier positions, I should take that cue to hedge out more of the portfolio at the same time with at least sold calls.

Looking at the longer term charts in gold and silver it’s still difficult to say whether or not we are going to feel the great sucking sound again on the miners or whether we will bounce out of this dreadful day.  In some cases — RGLD for instance — we haven’t even filled gaps yet from earlier in this week.  What’s more, it looked like it could consolidate at these mid 60’s levels for a bit longer.

As for yesterday’s purchases, they were all unmitigated disasters — especially BWA — the Borg.   I’d thought I was a bit early there, and sure ‘n hell if I wasn’t. I was down well over 7% in that “toe dip” position, so I thank Jupiter’s Stone that I “went small” in the initial buy.  UPS was also down a bit over 3%, but I think the franchise name held that company up today.

Bollinger Crash Trade candidates were all over the decking today, but I think the tastiest may be the Emerging Market i-Shares play, EEM, whose twin, VWO, was the largest “buying on weakness” name today, according to the Wall Street Journal.   I believe I shall be taking advantage of that one tomorrow, for the pop play.

Off to go drown my sorrows in a half gallon jug of Hugh Hendry Blue Label Gin & Jooce (sic).

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I already gave you this idea a few weeks back, but I wanted to bring my favorite Japanese gold play (not really), Yamana Gold (AUY), back to your attention.  As I mentioned in my last feature, this is one of the longest saucer-consolidation patterns I’ve seen forming in the gold sector since the March 2009 Recovery, and I think we are finally done consolidating and getting ready to launch with vigour (sic). Look at the weekly one more time:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note that the real breakout is probably going to be somewhere above $14, and you might want to wait til you see that number.  I already own some, however, and may add on strength tomorrow.   As I would with any long term consolidation in a bull, I expect AUY to launch quite nicely once it breaks out of it’s saucer pattern here.

Today I cut back on some over-weighted positions, as announced in The PPT.  That includes AAU, RGLD, DGP, some more NUGT and even silver star AG. I still have tonnes left in each of those names, btw.

Today I took advantage of Crazy Eddie “low, low, low” prices to nab some more UPS and TCK as well.  UPS is perhaps one of the most solid companies in the world.  It was on sale today so I added.    I also opened a new position in Borg Warner (BWA) which I have been stalking from much higher numbers.  I really like the auto supplier space.  There’s tonnes of activity going on in the Private Equity market there as well.

Best to you all.  I will be on the road again tomorrow but checking in.

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For the Bubble that took down the Economy?

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I stayed in Silver and her miners  today because all of my charts are telling me we are still in the early stages of a liftoff in those miners.  The golds on the other hand are a tad more stretched.

As per my announcements in The PPT, I took some profits in DGP, NUGT, IAG and XG today as a result.  I still have plenty more, but wanted to build some cash for opportunities.

Best to you all.

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[youtube:http://www.youtube.com/watch?v=xm6PGh2fvTg 450 300]

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Listen to me very quietly and carefully — You need to be on your toes at all time and keep a cool head like Jimmy Dean in a meat locker because half of what’s going on is designed to scare you into a blue paralysis that will render you immobile, and thus, malleable.

The market thinks you’re putty, see?  That’s why we’ve got guys begging off, folding their tent, going to cash, putting that roll in a coffee can and burying it on the back 40, right next to the bomb shelter packed with MRE’s.  They say “no mas!”

I say “oversold.”   I say that some of the wilier tells in the mining industry — like ANV and CDE, NG, MVG, BRD, and yes, even beaten down old XRA all jumped ahead 3.5 to 6.5% today.   What’s more, they all stayed up even after the selloff in the precious metals themselves (gold and silver) later in the day.

This is my signal to hold fast and watch the market closely.   I still think this debt deal quails the dollar, either by lack of confidence in the foreign markets or by dint of Bernanke printing press (Jackson Hole Conference right around the corner).

So I’ll continue to bide my time here, beer and NUGT‘s  in hand, and wait and see what spooky stories the market brings us tomorrow…

All the best to you, my fearless ones.

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(Some of You May Recognize where I was this Weekend…)
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All is well at last, the Kabuki Theater entertainment has ended and we can all expect bright sunshine and free cherry-bomb popsicles for the remainder of the summer!

Or not?

It’s hard for me to see this as anything but a temporary positive, as it looks to be another boot of the increasingly cumbersome can “down the road,” once again.    Some of you may have noted that the plan calls for some $2.2 trillion in spending cuts over the next decade.  That may sound like a lot, but one must look at the way Washington politicians (and their scoring body, the Congressional Budget Office [“CBO”] ) define “cuts” before we can analyze that number.   Unlike you and me, who “cut” our own budgets by reducing spending, Washington defines a “reduction in the planned growth of spending” as a “cut.”  What does that mean in practical terms?

Let me give you an example to illustrate:

Some of you may recall my comment the other day on Fly’s blog that if Washington decided today to merely freeze current spending at 2011 budget levels over the next ten years, that would be defined by the CBO as a $9.9 Trillion “cut” in spending over that period.  Why?  Because the CBO looks at current Congressional spending plans like a layman might a five or ten year lease rate– they build regular increases into spending over the specified period.   In other words, the thought that a budget might NOT increase is almost unheard of in Washington.

In fact, it’s so unheard of, that the very “cuts” they are bandying about today are merely decreases in spending growth, not real “cuts” at all.  And since we can’t even afford spending at current levels, this means the “deal” brokered today over much jawboning and posturing doesn’t mean “jack all” with regard to actual deficit reduction, and it means absolutely squatola with regard to the overall burgeoning debt position of the United States Government.

Today, Congress is patting itself on the back for putting a finger in the dike like the famous Dutch boy of legend, but they are ignoring the gaping chasm appearing in the seawall 50 meters to the right.

Combine these last weeks’ complete waste of time in addressing the ongoing debt problems with the continuing reality of the Obama Recession, neatly laid out by the U.S. Commerce Department’s Bureau of Economic Analysis (“BEA”) just last Friday in a report stating that last quarter’s anemic annualized GDP growth rates of 1.92% had to be revised to an even more atrocious 0.36% annualized rate, and I’d say that we are deep in the crapper here, folks.

Leave the ongoing unemployment woes aside, the fact is that we were able to escape the consequences of our debt profligacy in the past by growing our way out of the problem.   As the above paragraph states, that ain’t happening here.  What’s more, if the Obama Administration continues with it’s plans to foist  Obamacare on lower value-added employee bases (read: “unskilled work forces”) and also continues with it’s heavy handed regulatory and “green” initiatives, unemployment is going to get worse before it gets better.

With these set of parameters, what choice, really, does Bernanke have, but to whip the printing presses into a frenzy to stave off Depression Era deflation?  And for how much longer does that strategy work in conjunction with our hemorrhaging debt problem?

When does the child (likely a Chinese child) finally cry out: “Look! The Emperor is not wearing any clothes?”

Let’s see what happens tomorrow, but I continue to like TBT, unless some madness grips the bond markets.  Gold and silver may take a hit here, on the “all is well” euphoria, and maybe even in the double whammy when everything starts selling off later tomorrow or this week.  I actually bot some NUGT and DGP on Friday, thinking the veil will be dropped a little bit on the Emperor when this deal gets done.   If I’m wrong, I’ll dump that extra, post-haste.

Oh, and I’m keeping GSVC, because the Fly is never wrong over the long term.

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For the “panicky types” who have perhaps been taking their eye of the long term ball:

Yeah, we might see a little dollar rebound action here, but that’s what happens when you hit short term support.  There’s still a pretty strong indication that those ALL TIME lows will come a calling again.  What manner of specie would you like to be invested in at that point?

Be wise.

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