Daaaaaah-DOPE-di-dope-di-dope-dope-dope-dope-daaaaahhhhh…..
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Dateline Palo Alto — Sierra Club President Richard Cecil-Head, IV speaking from his Half Moon Bay headquarter today stated that “No efforts will be spared,” in seeking to preserve the shrinking populace of gold bears in the foothills of Palo Alto.

“Few people realize the boon to society these particular bears can provide,” stated Mr. Head.  

 “Leaving aside their propensity to keep their backyard pools clean of scree and pine dust– sometimes scrubbing them as many as three times a day– these bears also provide significant aesthetic value by selling into every downspike and even potential downspike in this secular bull market over the last nine years.”

“Do you realize how rare a commodity such perfect obtuseness is nature?  Darwin be damned – these knuckleheads must be preserved for the good of us all!”

Head is particularly concerned about the dead and dying bears being reported all up and down the California coast, especially those found with [[GDX]] -brand tire tracks across their furry backs.

“Please,”  Mr. Head told this reporter “Let’s get this story out there.   We cannot afford to lose this valuable animal to the ravages of rational market.”

(Rumours (sic) of Mr. Head’s large investments in physical gold were unconfirmed as of this column’s deadline.)

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Today I was busy, friends.

I sold a lot of phat calls that I owned since the last two dips today, mostly because they were getting long in the tooth (ie, “December strikes”).   I got rid of December GDX $39’s and $40’s at embarassing profits, all thanks and praise to the GDX shorts, once again.   I did similarly with December strike Silver Wheaton Corp. (USA) [[SLW]] calls that I held at $7.50 and $9.00 strikes.  

The profits were unseemly.  I shall not speak of them again, for fear of “colour” (sic).

I also sold 20 Allied Nevada Gold Corp. [[ANV]] December $7.50 calls for a nice mark up, and I hold another 20 I will likely boost tomorrow.   I still hold another 40 SLW and another 20 GDX December 40’s (listen, I had a ton, okay?) which I will likely get rid of for the one reason that time grows short on them.

The next dip I will be starting the process all over again, likely with the same robust names, as they have been “berry berry good to me,” Garret Morris-style.

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Please tell me you got some Royal Gold, Inc. [[RGLD]] over the last weeks and/or months?    It broke the fruits out today, and it’s in “I dunno WTF” territory now.

I would love for RGLD to return to the breakout area of $49.72 or so… I just don’t know that we’ll see it.    I will not sell this stock under $200,  and  I firmly believe it will be the Potash Corp./Saskatchewan (USA) [[POT]] and The Mosaic Company [[MOS]] of the “next” commodity bubble, which will be precious metal driven.

Don’t forget about [[PTM]] in all the gold and silver shuffle, either.  

  Sell some Silver Standard Resources Inc. (USA) [[SSRI]] if you have gains.  It’s a lagger, and I’m cutting back on it.   I think I shall replace it with Allied Nevada Gold Corp. [[ANV]] , on the Jacksonian Roster, fwiw.

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Last, there’s been a lot of back and forth this last weekend over the benificence of socialized medicine, care of Nan Pelosi, Scary Harry Reid and President Obama.   Putting all politics aside, know this — you cannot get something for nothing, and economics law will not self-suspend, even in the name of alleged altruism.

As I explained to a fellow blogger over the weekend, increased demand drives one of two things — higher prices or lack of supply, depending on whether prices are allowed to increase in a free market environment.

Increased participation in a market at a “zero price” (ie, gov’t paid health-care) will put a strain on our current supply of very expensive health care, even positing there is no exit by our  current providers.    If prices are not allowed to rise — or heaven forfend  they are cut — there will be massive “throwing in of the towel” by providers across the board.

Look for a  bifurcated system to arise, in that event, where the best providers that remain will “opt out” of any government — and likely many “governmentalized private” — insurance programs to serve those who can afford “club-based” gold plated care.  

Does anyone think that anybody but the Ted Kennedys and other such plutocrats who can join “the Club” will be happy with what remains for the masses?  

Dr. Fly cannot attend to everyone, you know.

Think hard, America.

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[youtube:http://www.youtube.com/watch?v=mVh75ylAUXY 450 300]

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Given that this ‘toon was produced in 1948, right about the time our allies in Europe were succumbing to full-blown post-war collapse Fabian socialism, this piece is eerily relevant today.

And I’d add — never more so than on a weekend where such dark portents as the passage of PelosiCare have brought us all to a historical precipice.   

 To what fate will we consign our children?   It’s up to you, America.   Time to step up.

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Fly encouraged me to blog on the Ft. Hood massacre this weekend, and well, I think I’ve illustrated my thoughts relatively well on his blog-posting on the subject. 

A quick wrap-up–

I think it’s a shame that the foreign papers — particularly Great Britain’s Telegraph — are doing better and more honest reporting on this subject– particularly about the background and description of the murderous assailant. 

Our press, on the other hand, is already making pathetic excuses for the Wahabbist strain that threatens us even from within our own borders.   Like their co-religionists in the ruling Democrat Party, the mainstream press chooses to bury their head in the sand and ascribe blame to “random” mental imbalance, rather than the more obvious pathogens which have arisen time again.

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All that said,  it’s even more despicable, in my book,  that the Democrats  are attempting to take advantage of the press cover given this horrific event to work an extremely rare weekend hoping to foist what the Wall Street Journal called “maybe the worst bill in Congressional history” on the American people without a single bi-partisan vote.

That’s right, Nancy Pelosi and her hard left co-horts in the House are making a power-grab of historical — and unprecedented — proportions with this week-end attempt to move your healthcare choices to Washington.   In historical terms, even more than the rampage at Fort Hood, this bill’s passage could become the worst news of the week, and perhaps the decade for the United States and the world that depends on it’s innovative system.  

I urge you to contact your representatives in Congress and  make your voice heard as a taxpayer and defender of constitutional and personal freedom.   Do not let them get away with this theft.  

As Representative Paul Ryan (R-WI)  makes clear in this clip — we as U.S. citizens want to be on the right side of history, and all it takes is a phone call.  Do it!

[youtube:http://www.youtube.com/watch?v=Trrv26aZWYY 450 300]

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I’ll just keep on, keepin’ on….
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I trust nothing these days, save my Jacksonian positions.

I certainly don’t trust the restless trolls reaching their gnarled fingers from under their respective bridges to nip at my knee-caps.  Back off, trolls, lest I take you off at the fore-arms with my trusty scimitar!

Despite the above imagery, I was relatively unscathed today.   Down less than 40 bips.  Odd, no?

And guess what else?

I bot some more PM exposure, like a crazed bandicoot, hungry for shiny tin foil. Options, even. (Am I mad?)

No, not even peevish. Just “taking advantage.”

I bot back the 30 December $9 strike Silver Wheaton Corp. (USA) [[SLW]] at $3.70 and $4.00.

I bot back the 40 December $40 strike [[GDX]] at $5.60.

I added another 300 shares of [[AGQ]] at $56.33, just for the heck of it.

I am eyeing Exeter Resource Corp. [[XRA]] which I still haven’t bot yet. I think [[UUP]] will have trouble tomorrow, despite it’s recent strong price and volume move.

Remember it’s “Ridiculous Bond Sale Week,” and let’s be careful out there.

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Mind this One, too.
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Doesn’t it just seem like this tape is chock full of momentous milestones?  Not to bore you, but it seems like they keep coming, three a day — fire, flood and poor draft picks alike.

Sorry, that last was a shot at former NY Giant GM, Ernie Accorsi, long may his toupee moulder.  I’ll speak no more of trading the largely mobile and quick thinking Phillip Rivers for the clubfoot, Eli Manning, hurler of rookie interceptions deep into his sixth year on the job.

I’m not bitter, I swear.

But back to the momentous event of the day.   I like to call it “The Intercession of the Magic Gap.”   Back in the early days of October, 2008, when this whole gerbil basket of a market was falling to the feral cats, we had a Friday-Monday gap on the [[SPY]] of some significance.  It’s illustrated below:

 As you may recall, it got quite ugly after that.   However, the reason I illustrate this gap today is that I believe it’s serving as quite the psychological barrier for our market participants.   

Those bears, beaten and stripped of their 10k Rolex’s and cashmere mittens have long recognized this fillip as the “enough is enough” Maginot Line.    They believe this is where they can stand athwart history and cry “Stop!” in full W.F. Buckley (R.I.P.)  mode.

The bulls on the other hand, see this as a natural accelerant.   Like Right Guard aerosol on the open campfire, they know this region of “free air” should propel this bull even farther and higher once breached for good.    And to their credit, that was the case this October 14th and 15th, when we zoomed through that gap like a hot canoli through marzipan.

However, it seems that our gap has acted as something of a “CAP” upon reaching the north end.  Note we did exceed the roof, but not by much:

And my thinking is that this, too, is to be expected, as is today’s test of the uptrend line (also marked on the above chart).  

In fact, if I’m correct here, we are just consolidating this momentous level, and we should bounce off our long term trend line here on our way to the 1150-1180 range, where we’ll find our next consolidation point.  Here’s the BIG PICTURE I’m looking at, including “Gap/Cap:”

The great thing is, if I’m incorrect, you’ll have two things to give me yellow parsnip grief over — the Giant loss, and the Bull loss.  

But we’ll know soon enough, won’t we?  

Ciao for now, and Go Junkees!

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Aside — This is AWESOME… (gotta love youtube):

[youtube:http://www.youtube.com/watch?v=6KR2CiceeWg 450 300]

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After all, this is why we are socking away wins for a rainy day:

So yeah, the Jacksons (up a collective 36.5% since May 1st as of today’s close) may be doing egregious “loaves and fishes” type miracles with your cash pile, but let’s keep our nose to the grindstone, as you’ll need that dough when a ham on rye, hold the mustard sets you back $36.25.

Remember we are all about dollar destruction here.   Take a look at that chart and ask yourself if the Congress and the Fed are going to support that kind of spending (not to mention the huge Medicare and Soc Sec liabilities) via the good old fashioned “belt tightening” of increased taxation and spending cuts?  

As they say in Texas, “No, hail no.”

So let’s be opportunistic and remember that there will be pullbacks in these metals, but that we need to manage our positions to maximize cash flow in this critical period.   For me that means selling calls at critical junctures, and even trimming the sails to raise cash from time to time.  If I’m reading things right, however, you are in for a bumpy, but enjoyable continuing ride here.

Keep in mind Rubicon Minerals Corp. (USA) [[RBY]] has broken to new highs yet again, and Allied Nevada Gold Corp. [[ANV]] remains a favourite pick.   I may take some leverage (ie, bot calls) off the table in Silver Wheaton Corp. (USA) [[SLW]] soon, as it’s run faster than it’s brother silvers by far, with over 66.8% returns since May 1st inception, while [[PAAS]] and Silver Standard Resources Inc. (USA) [[SSRI]] are only at 43.5% and 29.2% respectively.   I think SSRI especially will gain from here. 

On the junior level [[EXK]] continues to be a junior trooper, and I continue with a leveraged position in [[CDE]] as well, because of the acute lack of overhead.  I also own Hecla Mining Company [[HL]]

On the gold side, IAMGOLD Corporation (USA) [[IAG]] remains the monster of the pack, with 85.8% returns since inception, but I’d look for a pullback here before jumping in.   Eldorado Gold Corporation (USA) [[EGO]] and Allied Nevada Gold Corp. [[ANV]] still look like they can pack punch here, however, so keep an eye out on them and yesterday’s mention Gold Fields Limited (ADR) [[GFI]] .  

 Last, non-PM Monsanto Company [[MON]] grabbed back some ground today but continues to be undervalue in the Jacksonian sphere.   Still a “grandkids pick.”   The Andersons, Inc. [[ANDE]] –up over 106.5%  since Jackson inception — is still our leader, and looking for $39 as it’s next “achievment.”

I’ll have more tomorrow, but let’s shut it down with a veritable classic from my youth.   Share it with a favored son of daughter, and it’s likely they’ll never forget it:

  [youtube:http://www.youtube.com/watch?v=P7tQVEEPWv0 450 300]

Slange.

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