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Calling in from the road again with my apologies.  I just looked at the market for the first time today (aside from the occassional blackberry glance) and I note that my rare-earth picks seem to be coming alive like a solar juice stock on cocaine steroids.

The big winner of the day was Quest Rare Minerals — QRM— and my old chart still holds true here.   The stock increased over 25% today on huge volume (over 5x average daily volume) on news of some rich drilling successes.  Note how this big move ran almost exactly to the consolidation zone that I had laid out some months back.

I expect we’ll see this stock consolidate like AVL did the other day.  AVL was up large today as well (although only 7%+) and is also knocking back at the consolidation level we noted the other day.   These are good times to accumulate on pull backs, folks.  This volume means something here.  Others to keep an eye on are MCP, REE and GDLNF.

I note other bloggers on this site have been picking up on some of my stocks in the PM sector, and I appreciate that helping hand.

I will try to check in tomorrow… again from the road, if I can find a wi-fi connection somewhere in this jumble of tubes and molten metal.

Best to you all.

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Hat tip to Ecchy:

[youtube:https://www.youtube.com/watch?v=QZsppOw2Mxk 450 300]

 

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[youtube:http://www.youtube.com/watch?v=bpA_5a0miWk 450 300]

Quite possibly the “Best Music/Worst Video” combination of all time

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At the end of the Sir Thomas Malory’s Le Morte d’Arthur, the famed British hero King Arthur is transported back to an enchanted island to recover from his mortal wounds after the Battle of Camman  and perhaps be frozen in time for the next time England might need it’s hero king.

Some say he did come back– as Mick Jagger, or more likely the closer kin — Welshman Tom Jones– but that’s only idle speculation.  The important bit to remember here is that enchanted isle was called “Avalon, the Island of Fortune. ”   Some of you who are on The PPT may think sometimes that all of my picks have gone to a magical island to recover from their mortal wounds.  Perhaps they too will reappear someday when Chess or Rage or le Fly are having a bit of a dry spell.

That too may be idle speculation, but in the meantime, there’s a rare earth metal stock that I’ve been accumulating as of late, now to the tune of 30 kilotons, mostly in the low to mid $2 range.  It is of course called Avalon (AVL), and may finally be revealing itself as the font of good fortune I expected after many a day of bouncing around like a malfeasant pinball.

You’ll note in the chart below, that I marked an original consolidation point upon which I thought AVL might rest for a bit after rallying off it’s lows in October, hitting resistance at the old breakdown point (about $4) in early November, and then making a higher low in late November.

As the stock rallied back above that mid-consolidation line in early December, you will recall that I expected it to base there on the consolidation line.  Well that didn’t happen, at least not for very long, and the stock actually began breaking down again.  It eventually broke down below the “higher low” area all the way to the October lows before rallying once again on strong volume.   Note all that progress in the chart below:

Now the question begs — did we just experience a double bottom in these cursed rare earth metals?  If you look at REE, your answer might surely be “hells yes!”  Checking QRM, however, and you might consider the jury still in the anteroom.

What I can see, however, from the above chart is that we have some pretty helpful guideposts available.  If what we’re seeing on the past two high volume days has been the first two legs of the three white soldier candlestick pattern, we’ll see AVL‘s price burst above that consolidation line that so effectively served as our ceiling today.   Since this is a bullish reversal pattern, it should mean continuation after a bit of consolidation, so we might venture some additional buying in that case.

If however we do not get any follow through on the last two days momentum, we know that the consolidation line is acting as resistance.  If we really do have a double bottom pattern here, then we likely will not see another low below the most recent “DB” lows, and you’ll rather have a “rest,” followed by a final break of the resistance.  Given the volume of the last two days, I think that’s the more likely bet.

As an aside… my “Magnificent 7” 2012 picks, including Pick of the Year UPS, as well as AG, COP, DE, MON, PBR and RGLD, are up 5.9% collectively so far this year, and that’s not including dividends, which on some of those can be a significant sweetner.   MON is in the lead as far as top performers, with 12.5%, followed by AG and PBR with 8.5% each.  My two laggards are UPS and COP, with 0.4% and o.1% returns, respectively, thus far this year.  This does not include either stock’s phat dividends of course.

I’m going to be in and out the rest of the week, meeting with buyers, so I may be scarce, but will endeavor to visit at least in the evenings.   My best to you all.

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Feed Me! Nom! Nom! Nom!

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Again, my friends, I must apologize for my scarceness on these pages.  I know there are times when many of you may plead for my acquittal from this site, as there are times (due to my acute boredom and incipient ADD) I am here commenting like an Algonquin Round Table wag at the height of the Flapper Era.  You must get sick of that.

But if December is always a rough month in my business, then the last week of December is often the grande chancre (sic) beyond all imaginings.   It’s been ever thus, and it doesn’t matter if I take the week off from work or not (and I do, in the grand tradition of my own bosses past, thereby leveraging my subordinates and allowing me some time with the family), as the former “filter” I thought I had constructed has fallen, by steps, to the technological immediacy of first voicemail, then e-mail, and finally (shudder) Skype.  And to think, this is not even a “capital gains lock-in” year.  Oy.

To make matter worse, this has also been the traditional week when Mrs. Gint gets together with her Wyrd Sisters and our aggregate families (10 children in all) here in town.  So between entertaining between 18-20 people (depending on when grandparents and great aunts/uncles/cousins arrive) a day/night, and juggling three live deals and one dying one via electronic media, I end up neglecting you, dear reader.  Again, I beg your pardon.

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For those of you who were thinking that “The Stock of 2012” would be of the “precious” bent, well, good for you.  Valuations are at 52 week minimums about now for most of my favourites and if you are a loyal subscriber to The PPT, you know that most are also reading “oversold!” in a big way as well.

(Aside: You are crazy if you are not taking advantage of this end of year special for The PPT, as the overall market hybrid alone has been knocking the cover off the ball for those using the patented “Fly Step-in Methodology” for entrance and exit).

Well, yes, this is a good time to be accumulating SLW, EXK and AG, and GDXJ for the new year, if only for an oversold bounce (if you are feeling chicken).

But this year’s Pick of the Year is going to be something  you can put away for a longer to near terminal hold.  It’s the tightest ship in the shipping bidness (sic)– United Parcel Service (UPS).  I am biased, as I’m a long time holder of this King of the Transports (and the $TRAN weekly is looking very smart here, btw), but I think that 2012 may be the year that UPS finally “breaks through.”

Fundamentals are not my bag, so I won’t belabor them, but it is important to note that UPS is the market leader in package transport, with over 15 million pieces moved a year (over double that of rival FDX).  What’s more, despite its unionized work force (Teamsters and Independent Pilots Union), UPS manages to eke out considerably better margins (about 350 basis points better) than the flashy FedEx purple people, most likely due to its entrenched market presence and it’s flexibility in trucking delivery (for example, UPS delivers 1-day, 2-day and regular business deliveries all from the same vehicle route, while FedEx uses wholly different carriers for the different delivery times).

Of course UPS also offers a fatter dividend.  At 2.80% at current market prices (and I’d like to buy it closer to 3.0% anyway), it is about 220 basis points better than rival FDX.  UPS is a cash cow, with $3.5 billions in free cash to either reinvest in new planes and trucks or to mail back to shareholders.  UPS also uses that cash to buy back shares, which is of course accretive to overall value.

But UPS is also a great hold for the future, as  well.   Any good wife will tell you… the wave of the future is internet delivery of just about everything.  And if you love AMZN, God bless, they are a great company, but by no means impregnable from a barriers to entry standpoint.  Now, how would you like to try to start up a rival package delivery service that will meet up to Amazon’s exacting demands (not to mention your mother in law’s)?

See where I’m going with this?

Last but not least, from a technical standpoint, UPS is again nearing all time highs, which it will eventually have to surmount.   Like one of my better gold picks this year– AUY–, UPS has been attempting to break that “lid” at $75 for while now.   If earl prices remain somewhat accomodating, then I think this may be our year.   Note my weekly, which shows the formation that marks the $TRAN itself… a 13-week/34-week EMA crossover (the weekly “golden cross”) and an attempt at breaking to new highs:

And my daily chart shows where I’d like to enter… at the 20-day EMA, if possible:

 

And that is all for now, boys and girls.  I will be back with some predictions for 2012… I hope before the dawning of that auspicious, and seemingly most pre-benighted year.

Best to you all.

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[youtube:http://www.youtube.com/watch?v=xvz8tg4MVpA&feature=related 450 300] [youtube:http://www.youtube.com/watch?v=n8YCd9-Xtc8&feature=endscreen&NR=1 450 300]

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We talked today, so you know what I was doing this afternoon.  I liked the way the miners and even the silvers hung in there today despite the savage sell-off in the morning at the POG/POS level.  It convinced me to add another 10% or so to my 60% position.   I added SLW, AG, and GDX (two silvers and a gold).

To some extent I’m justifying my “Hang on, Sloopy” act over the last week or so, and I have to admit I was surprised to see that sudden cut below $1600 on the POG today.  However, when I noted that the $HUI was bouncing off long time support even as the price of gold (and silver, yeesh!) was still plummeting, I was pretty sure we were not far from the final washout.  That’s what I’m betting on now and for the remainder of the week.

If tomorrow we see a continued bounce (off of the $500 floor) in $HUI, then I will add more to the above and perhaps go have a sandwich in a park with some homeless people for the next couple of days.

It beats Christmas shopping.

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I mentioned I was going to say a word on that execrable and stupid Henry Blodget piece from the other day, the one in his Business Insider blog extolling this new bizarre left wing theory stating that it’s not entrepreneurs after all who create jobs but the  concept of  “demand.”

Suffice it to say, I’m shocked that such a jejune theory could be promulgated by a guy who at one time was actually hired to analyze stocks for a major Wall Street firm (albeit a guy who has since been banned from ever working on that side of the game forever).

Saying “Demand” causes job growth is a little like saying “oxygen” causes job growth, in the sense that if there were no oxygen, we’d be too busy gasping for air to bother to create jobs.

The whole idea is intentionally denigrating in the tradition of the political Left in that it implies that there is no credit due to entrepreneurs for having an idea, risking capital, and pouring hard work into a new enterprise.  Blodget’s crazy claim is that all those factors don’t matter, because — get this — if there weren’t the cash and the desire (which equal “demand” to him) to buy the product or service, their would be no revenues and therefore, no jobs.

In Blodget’s world, the chickens are slave to the egg!  But is that really the case? That without a consumer “demand” present, we’d have no production economy?  Well let’s go back to a hypothetical pre-history to find out:

On a primitive island, where most sustenance is derived from the indigenous banana trees, people traditionally spend most of their day searching about for banana trees which they can climb and then painstakingly harvest bananas by hand.  Local smart guy Oog rigs a scaffolding platform one day out of bamboo and cane rushes and finds he can harvest four times as many bananas as the typical islander can using the old method.  Oog soon finds he has a surplus of bananas, which he finds he can trade for other foods, clothing and perhaps a concubine or two.

Soon Oog realizes that he can make the scaffolding platforms for other islanders, which he does, in exchange for more trade items, and perhaps a plot of land for a new house.   This distribution leads to a massive increase in productivity on the island, which leaves the other islanders with more time (ah the essential commodity!) to commit to other useful tasks, perhaps in seeking alternate foods (the local javelina look tasty, but they were hard to catch and bananas took less time to harvest).

In the meantime, Oog has hired a couple of young men to help him construct his scaffolds and to develop a sharp new projectile or two to help with the javelina hunting ideas he’s been working on.  He pays them in a portion of the goods he obtains in trade for his invention.  They in turn have excess goods with which to trade their fellow islanders, who now have time to continue developing this micro-economy outside the initial “firm” of Mr. Oog’s.  A cycle of job creation has begun.

Now in the above case, “demand” is nothing more than common sense.  Mr. Oog, through his ingenuity, has devised a time saving device for his fellow islanders, and they quite sensibly recognize the value in “purchasing” an item like that to free up their own lives for other activities.   What they pay for the device is irrelevant, as Mr. Oog can take many forms of specie — from trade goods to service — in exchange for his invention, were it mutually beneficial for him to do so.  Blodgett’s “demand” is a red herring.

In the same way so is his insistence that no one would buy Steve Jobs wonderful iPhone were it not for “demand” from the mindless consumer masses in the form of desire and cash.  But don’t the last three years put the lie to such inanity?  In some of the worst economic times in modern history, iPhones have sold faster than Carl Lewis on crank.   That’s because consumers saw the value in an entrepreneur’s idea, risk and execution– not because they just happened to have a few extra hundred bucks they weren’t using.

To act like an economic system is not one of choices and decisions which lead to rewards and penalties is to perpetrate an invidious lie that would suggest we are all powerless as individuals.   I can imagine only one purpose for promulgating such nonsense, and call me cynical, but it’s a dark one, ending in death and slavery for all but the very few.

Best to you all.

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Lots of nasty things can be found at the bottom….
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This action today spells puke-ville for most, and you are probably hearing it. Just had a conversation with my mentor and he’s hearing it louder than loud from all but his oldest co-investors (he doesn’t even call them “clients” anymore). 

I knew we were approaching the end of a cycle here, and I held on hoping to catch that turn and add some of my cash to the projectile return.  I still hope to do that, but believe me I’m a bit more cautious at this point than I even was last night.  That’s just human nature, and it affects me just as much as it affects every one of you.  

There are some positives to look at for those of you who are grinning and bearing it right now in true Cement Head fashion.  For one, we are fast approaching the 52-week high for the dollar at just over $81 on the index.   It’s highly unlikely we will blast through that range without at least something of a rest.

What’s more, the $HUI is holding (as of this writing) at the $500.00 support level (sorry I can’t post a chart at the moment, but look at the weekly if you have the ability to do so).   Oftentimes the $HUI will signal a turn before the POG will.  

 Last, we still have that 34-week EMA line to think about.  Keep in mind this is options expiration week, and everyone and their mother had long calls for Santa which are now all underwater.  We may even get a swing back long before Friday, but I’m thinking that we will see some of Fly’s rubber band action to get us back above that ($1646.oo) before week’s end. 

Granted that’s almost $100.00 north of here, but you might want to keep in mind how quickly we broke this low. 

In summary, I’m continuing to do nothing with my 60% invested position.  If I were a shorter term trader I may have gone to cash a little quicker.  In this case, however, I’ve got enough “leeway” to withstand some shorter term draw-down while waiting to grab some additional return on a re-ignition.   

Best to you all.

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[youtube:http://www.youtube.com/watch?v=a6MMW-NJmt8&feature=related 450 300]

Sublime Christmas Beauty

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Mid-month Christmas ruminations…

I’ve always been a big fan of the Christmas season*, even if that appreciation has morphed from that typical childhood manic Santa-Greed, to that middling “purchasing for others” egotistic patronage phase, and finally now onto the “enjoying the little ones’ joy” segment.  For what it’s worth, this last bit has been the best.  You wish they could stay small forever, but even into their teens, the kids are a treat on Christmas morning and throughout the holiday season.

But as I’ve gotten older I’ve also realized that Christmas is about more than rejoicing with my immediate family and friends, it’s about attending to one’s community as well.  I like to think of the season as a kernel to build upon for the new year — and as a reminder of what the heck we’re doing here in the first place.

Christmas is a gentle ego aide —  that helps me remember we are not here to build wealth or careers or even organizations — or at least we are not here to strive for those goals for their own sake.  We are here to serve one another, to serve the least and even the greatest if that is the call.

I was therefore dismayed to hear an older gentlemen (50’s) the other day say he “was just about Christmas’ed out,” (this was December 10th).  I first thought to myself, “how cynical,” but then upon further reflection I realized this was probably an indication of seasonal depression, most likely caused by a prematurely arrested Concept of Christmas.   If one saw each Christmas as a wholly commercial exercise, bracketed by obligatory holiday parties and regimented relational visits, I could see that getting rather tiresome as one approached a half century on this planet.

But instead, if one could see Christmas as a challenge… or even as an annual quest to find the right person, group or community to serve for the season, and perhaps even for the new year, then Christmas becomes something else, something even more wonderful than the joyous mornings of our wrapping paper youth.   And I’m not just talking about the quotidian forms of charity, although those are certainly important and necessary.  I’m talking about reaching out to that Bob Cratchit in your life if  you are a boss, or that Ebenezer Scrooge if you are an employee.

Someone needs you, right now.   What better time to take that excuse to reach out, and to offer a hand — even anonymously– to those in need of a friend or a patron? Take this Season and make it special, and carry that extra joy with you into the new year and onto the next.    I promise you will never be “Christmased out” again.

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*(Please be assured that when I mention “Christmas” as the season, I recognize that the December Holiday Period is a time of joy and familial reflection for many cultures and faiths, just as the New Year is a time for renewal for us all.  I believe the prescription mentioned above is a fitting one for all men and women of good will, not matter their affiliation, or lack thereof. )

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As of this writing, the dollar is rallying again, and flirting with that $79-$80 range that has been been our “top” since last January.   All I can do is wait and see if Santa is going to be good to the little PM trader girls and boys.  If we breach our late November highs, then I will be shaving down to more cash, but until then, I will be eating samiches (sic), and thinking about bell ringing.

My best to you all.

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