Gold for Your Ice Cream Cone

Mmmmmmmmmm….. Deeee-licious!

Looks like our friend “Baby $HUI” — the Amex Gold Bugs Index is just about to pull back to our second line of resistance that I’d plotted out some week and a half back.   If you recall, the chart looked like this:

In the above, we’d hit that magic $400 barrier and come back already to our first point of resistance.  Well, as of late last week, we’ve come very close to that second line and will likely hit it sometime today (Update: We’ve hit it and then some at $341– next stop could be our 13 week MA at $337.30).   Therefore, I think we need to keep our eyes open for a bounce here at least back to that first resistance level at $375.    Here’s where we are today:

Because of the relative strength of this sector, I think it will continue to lead, and show it’s bull head before the rest of the market does (if in fact the rest of the market continues with its bullish ways).   Short synopsis, this is your only confirmed bull in the market right now, with most names riding above their 200-day MA’s.   Therefore, this is where you want to play for fun and profit, no matter with what specie you purchase your ice cream cones.

There are a couple of POS miners that have yet to truly participate in this rally, and that may be because they are POS, so take this next chart with a kiloton of salt.   It’s the old dog, [[CDE]], which has dropped back down to attractive levels again, and is down over 5% as I type this.  Keep a tight stop here, but I continue to think this old hag still has a chance to come close to her 200 day MA at close to $30 here.  Here’s her weekly:

One last note — be cautioned as [[UUP]] is back above it’s 61.8% fibonacci line of $24.06 as of about 9:40 am this morning, which could spell at least temporary trouble for the markets in general.   In the case of this PM bull, I believe it smells of  opportunity.  Best to you all.

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Update:  Barron’s weekend pick  and Jakepick (non-Jacksonian) [[NG]] showing her mettle, up almost 8% in a down market.  I own shares, but will likely add to weaker names.  [[RBY]] in particular looks good here.  Word on the PPT is that it’s a possible [[GG]] takeover.

Update: @ 1:57 pm, $HUI is right on the trendline right now at 334, give or take.   If UUP folds over, this could be an excellent purchasing opportunity.  Keep a gimlet eye!

Update:  Bot 1k more [[AGQ]] @ $44.01.

 [youtube:http://www.youtube.com/watch?v=pZ3BXixtahg 450 300]

Some weeks back, before the auto industry bankruptcies were effected, an observer objected to Alpha Dawg’s depiction of the Obama Adminstration’s handling of the Chrysler bankruptcy as “fast and loose” with our traditional respect for the rule of law.   The Obama defender said that it was not true that the Administration sought to circumvent traditional protections for senior creditors that have been laid out in corporate law since the beginnings of the industrial age, and that such machinations would not occur.

Well now we know different, and it appears that members within the Administration (as well as certain key Congressional members) have taken it upon themselves to re-order our formal capital infrastructure along lines that are, at least in the short term, more politically expedient for them and their key constituencies in Labor and the Environmental Left. 

The question arises as a matter of linear reasoning — for how long will our “best system” survive such repeated violations of the ground rules?   As with the examples of the ratings of bogus bond agencies or the corrupted evaluations of  compromised underwriters, the credibility and cost of capital does not easily survive an uneven — and worse — arbitrary playing field.   Moreover, when the font of such arbitrary rule is the far less checkable Executive Branch (thanks to the “Imperial Presidency” that’s been on the march since Teddy Roosevelt’s day), we must ask what price capital will demand in order to stay seated in the U.S. casino?

I submit that our government’s increasing propensity to interefere on the “front end” of our private sector malinvestments raises the price of doing business in this country for everyone, from the lowliest pizza franchisee to the largest and most independent of private employers.   As a nation of commerce that must support an increasingly burdensome government debt, the U.S. can ill afford to become as short sighted with the levers of our economy as the typically historically benighted Latin American dictatorship.  

Therefore, the first thing we must insist upon — starting today — is strict adherence to the rule of law in adjudicating the many bankrupticies that are sure to follow those of our recently ill starred auto industry.    I think the only way to do so is to firewall the Executive Branch, and yes, even the Legislative Branch from these crumbling companies.  No more bailouts for cronies or interest groups, no more “temporary” takeovers, and most important, no more use of regulatory or fiscal authority to pit one competitor, employee pool or supply group against another.  If this need be enacted via judicial suit or non-violent protest, it must be our first priority.

The reason is simply that our families’  futures depend upon re-establishing our national credibility as a level playing field for business.   For if there’s one thing I’ve said here before that I’d repeat until I was blue in the face or until every short term thinking government “fix” proponent got it, it is this short slogan:

“CAPITAL IS MOBILE!”

If you think that capital will stand passively by for continual abuse simply because it’s being housed in the heretofore “land of the free”  and home of the “#1 economy”  (never mind “the brave,” we’ll let that one go for now), you do not recognize the power of the global capital markets in assessing risk.  

Believe me, after the embarrassingly thuggish “rescue” effected in the video above, the U.S. auto industry will be subject to that lesson in sudden and exquisite detail for as long as it takes this country to win it’s credibility back.

Don’t hold your breath.  Instead, get out in front of your Congressional advocates.   Let them know you take the reshaping of our legal infrastructure seriously.  And that you will hold them accountable for their silence.

With the summary dimissal of [[TSO]] this week, I have an opening in the ranks I’d like to fill.   In fact, I may open the barracks to two or more if the stars align properly and there are attractive combatants ready to take the pledge to hard money and portfolio longevity that our General Jackson demands.  

One course I’m considering is having the Jacksons act as a 20-man platoon, with certain soldiers being held either partially or fully in reserve during times of either overvaluation or imminent reversal, whilst the others take up the battle against the Federal Reserve and it’s 12-battalion band of Redcoat brigands.   I believe I will represent this through a “going to cash” metric that I will include in my daily reports. 

For example, my sale of TSO resulted in a net cash position of $9,357  (a little more than a $640 loss from the original $10,ooo invested).   While TSO will soon come off the roles entirely, I will keep that cash for reinvestment purposes going forward, thereby keeping the Jacksonian Portfolio to the same accounting I’m using in my own portfolio.  

This method will also help better track my partial sales, like my “one third” position sale in [[TC]] the other day at $11.21, which would have yielded me an additional $5,250 in cash (keep in mind, the original $10,000 in TC was invested at $7.11 on May 1st.  Therefore, even after having sold a third, I have over $11,000 in value remaining ).   

So given those two sales, my cash position is up to $14,600, and burning a hole im m’ pocket.

I will work on adding these cash parameters so you can have a better idea of what I’m doing every day in my portfolio, and a better view on how I’m hedging the port against cyclical downturns.

In the meantime, I welcome suggestions with regard to additional Jacksons.  I can tell you now that the precious players will have a leg up and [[GG]] and [[AUY]] remain in the top contenders.  That said, I will look forward to your calls here.   Remember that I like liquidity, and volatility is not a plus in the Jacksonian fold.  Long term value trumps all, however, especially in the context of an inflationary or continuing deflationary market.  

Best  to you all.

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Addendum:   Forgive the indulgence.   I have one last tribute for my girl’s nativity.  Appropriately, it’s a song about a heart-stealing Kentucky woman, from the master himself, back before his voice went out altogether:

 [youtube:http://www.youtube.com/watch?v=Iq7ZkdNNPKI 450 300]

I am nothing without you.

(Take a lesson, young’uns)

Today was that rarest of days — an entirely red painted day for the Jacksonians.  Even when the PM’s are having one of their regular group regurgitations, I can usually count on MON or NRP, or one of my less precious groups like TC , sturdy TBT or even blessed Mr. ANDE to come to my aid.   But not today.

All bloody red.  Impaled on the hard cold grounds of Boston to the tune of  some 2.5% down.  

 But that’s the breaks when you are building a hard money portfolio that was up some 25% in a month.  You are going to have to expect some pullbacks and yes, drawdowns.  We will talk about certain hedging strategies over the weekend and I will have a later post tonight to go over the specific individual Jacksons and some of my other picks in more detail.

For now, it’s off to a well-deserved libation and the start of my weekend.   I will see you all later tonight with the roundup.

Addendum:  I did add some today but just a bit.   1,000 shs of [[TIE]] at $11.01 and 1,000 shs of [[CDE]] at $12.50.   They looked like they had pulled back to some stability.  We’ll see, as I plan to add more of both in future.

Special Addendum:  Vincenzo explains to Fly what happened with the servers this afternoon:

 [youtube:http://www.youtube.com/watch?v=4KsU89R1A8M 450 300]

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Update:  “Bloody” Jacksonian Results for Today:

Actual Photo of Fly Taking in Today’s “Winnings”  (IOU marker from Devil Dog)

Over at the PPT’s special “User Notes” running commentary section, otherwise known as “The Smoke Filled Room,” we are slowly, slowly, ever so slowly, mining the equity markets for all of their loose cash.    We are being quiet about it, and despite the clamor on this site, not too braggadocious– especially considering how efficiently we are picking the purses of the slug footed, tuft-eared mutual fund “management” drudges. 

That PPT.   That conflation of laser-sited market research and shared expertise, combined with the real-time shout outs of the elite membership… Hooo!  That sucker is hitting on all cylinders right now!   By Jupiter’s Stone, we may just suck all the stamped coinage out of this market before we’re done  — that is, all but the occasional TARP fund or whatever other “rescue” device Congress manages to filch from your pockets for eventual distribution into ours.  

It’s almost not fair.   Almost.   Luckily, we’re accommodating folk and friendly to strangers, so you can still join us and add to the fun we’re having.   So far, there’s still some dough in the market not yet claimed.   Come, give a hand. 

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In the land of Jackson, it’s a sad and blighted day.  Not so much as because of the over all portfolio performance — as it actually ended up today despite the laggard pace of the PM’s as they continue to consolidate last month’s move.   No, it’s sad because we’re tossing a soldier from the ranks today for gross insubordination.  Yes [[TSO]] fell below the $15 level again, and like Captain Bligh chewing apples seeds on the mizzen deck, I decided to make an example of him.  So I had him horsewhipped and thrown out into the street with the scallion leavings, bad porridges and other cobblestone-riding flotsam.

I had my stop set at $15, but the excellent execution of the House of Pershing took me out of my shares at $14.98, which is where I will leave that price (an ignonimous  loss of 6.43% since inception buy at $16.01) for the remainder of the week and/or until I find a replacement.   Because I “bought” every position in increments of $10,000 for purposes of this portfolio’s proper accounting, my next purchases will only use the $9,357 in cash left over from that sale.  

(As an aside, I suppose I should also make some allowance for the one third sale of [[TC]] yesterday, but that may be getting a bit overcomplicated for this grouping.  We’ll see how it goes).

The comments are relatively self-explanatory — I sold 1/2 the calls on my [[TBT]] position today, and probably should have sold more, but there it is.   Bruce gambled, and he won by selling early, as I sold my July 60 calls for $2.15 when TBT was just above $58.00.  [[TC]] remains a beast — like [[ANDE]], it’s over 70% since inception now,  while its exiled brother, TSO, remains a piece of dog offal.  

Be gone with it, and good riddance. 

 Jacksonian Core Portfolio Holdings Results