Joined Apr 19, 2009
721 Blog Posts

Stopping Bullets


I put these charts together last night for you, but I was too wiped out to write anything in conjunction (I got home real late last night).  

Turns out that may not have been such a bad thing.   You’ll see what I mean when you see the charts.  


Sometimes in the beginnings of a trend or cycle change, you can take advantage of some otherwise extremely risky pinless hand-grenade type plays that would otherwise be off limits to all but the most eyeball-sunburnt screen jockies.

I think this is one of those periods, and I’ve got two stocks for the “piker community” and a third for the Gentleman (and Ladies) of The PPT that look like apt candidates for some “follow fun.”   Not coincidentally, these three stocks were all up double digits yesterday, and two of them were up 20% or more. 

 Keep in mind that “pinless hand grenade” is a generous description of these little buggers, for if that is an apt description of biotech, then the apt description of this sector — the “rare earth metals” — is more like “loosely wired suitcase nuke with a broken clasp.”  Play very tiny if you choose to do so — for fun really, as your real meat will be carved from the husks of the gold and silver bears (Hellloooo Palo Alto!), and these should be considered nothing more than the most amusing of “amuse-bouches.”

First let’s look at QRM and check my buy and sell zones:

















 Note that I did these charts last night… and you can see that I thought that we’d run into some pretty immediate consolidation… which we did.  In fact, I thought this one would be a little bit easier as it had launched the day before off it’s 20-day EMA.  I figured that would provide some good support, post consolidation (the box area), but that one might want to wait till it launches once again (as I’m almost sure it will) past that boxed consolidation zone.   As I type this, QRM is trading at $3.02 with a LOD of $2.98.

Now let’s look at serious pocket rocket AVL.  I figured this one would have a nice sell-off this morning, due to it being up almost 24% (!!!) yesterday, and I was not incorreuct (sic).   Right now, it’s down almost 6.3% to $3.14 with an LOD of $3.11. 

Want to guess where $3.11 is on that chart below? 

















 Yeah, right about now I’m feeling like you can just call me “Neo” and I’ll stop all the bullets and the black suit guys for you with a wave of my hand.

But that shit never lasts so take advantage of it while you can.

Best to all.  PPT’ers look for #3 in the “Notes section” of The PPT.




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All Eyes on Earl

(Or not?)

Today, it seems everyone’s getting all excited about earl, that black gold concoction that keeps the Enviroweenies up at night dreaming up new ways to keep you off your Harley or leafblower of choice.   But don’t be fooled by it’s recent price appreciation.  It’s really only doing that to piss off my friend, Mr. Cain Thaler, of the Ascendent Dollar Theory.

What’s really going on has nothing to do with Israelis and Iranians playing tit-for-tat on the atomic apocalypse scene, nor does it even have anything to do with whether or not the Keystone Oil Pipeline gets approved by President “Jobs? Whattaya mean, Jobs?” Obama. 

No, it’s not even about the price of earl at all.  In fact, here in the real world universe, the price of earl hasn’t moved even one bit from yesterday.   What’s moved is the price of the dollar.  And it’s not just the price of the dollar versus other crappy fiat currencies, either.  It’s the price of all commodities versus the dollar.

Since the beginning of  November, the CRB Commodity index is up almost 7% from it’s October low at $291.75.   What’s more, that low was almost a perfect 61.8% fibonacci retrace of the May 2010 low at $247.16 to the April 2011 high of $374.48! 

Imagine all that stuff bottoming while the dollar was still ascending?  And now, it seems the dollar is retreating off what could very well be a double top formation.

Are you getting excited yet?  

More charts later….




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Don’t be Prejudiced

[youtube:http://www.youtube.com/watch?v=KVN_0qvuhhw 450 300]

It seems that the Olympian Fowl of Late November have been a bit tardy this year.   Gauging the current mood of the financial blogosphere, however, one would think the Mohawks had rescinded the Thanksgiving truce and were busy rendering bad punk haircuts to the entire Southern District of New York.

Ridiculous.   So you had a bad “Black Friday Shopping Experience?”  You didn’t get that $199 42″ plasma from Best Buy despite leaving 4 grandmothers denture-less thanks to your “flying elbows of  mercantile death?”  That’s a damn shame.   You should bring a hockey stick next time if you want to prove you are a playah.   That’s no reason to go all knee-knocked on the market because of a bad Turkey Week. I urge you not to become Ursine Prejudiced.  It’s the worst kind of poison for the mind.

You see, sometimes the Turkey Gods are leisurely in their ambling down from the stratosphere to bless you with the grapes of coin.  This is why it pays to have patience and to step into an oversold cycle in a graduated fashion.   Last week I saw the PM’s starting to show signs of a rally even as the dollar stayed strong, but I knew that rally would not fully materialize until the dollar was finally ready to retreat.  So I played halfway, and stayed out of the high octane stuff (save for a starter in AGQ) to start.

By my calculations, that dollar retreat should have started Wednesday or even Friday of last week, and therefore, by those lights, the dollar is living on borrowed time.   I think we will see a top perhaps as soon as tomorrow morning as the dollar tries to rally to the September highs.   From a stochastic and RSI standpoint, that rally looks ready to stall.  Note the overbought conditions in the following daily index chart:



















I think we can take advantage of this pullback and I plan to put on some leveraged plays — including NUGT and AGQ — if the dollar begins to break down significantly this week.   I’m not sure I will have those plays on for very long, but I think we can take some short term advantage of the return to the mean this oversold cycle presents.   As usual I would look to the liquid plays — GDX, GDXJ, SIL, SLW and RGLD.   If you insist on playing the micros and the juniors, please play small… and swiftly.

Best to you all, in your tryptophan heavens.


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There’s No Stopping Turkeyus Lurkeyus

silver turkeys


Move to Romania if you must, but you’ll only miss all the fun we’re about to have.    As Fire Marshall Bill would say— “Let me show ya somethin’!”

Check this silver seasonality chart out…. Do you really want to struggle with the turkey gods?  And keep in mind that’s over 37 years of seasonality baked in that pie.

Last please revisit one more timemy AGQ chart:


Yes, that’s one more tap on the trend line and this time a hammer to boot.  I think that gives us the oversold mojo we’ve been looking for, and tomorrow, I think we make that assault on $60 one more time.


Best to you all.

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Bernanke Brings the Cranberry

[youtube:http://www.youtube.com/watch?v=w_g2t0ZfIkA 450 300]


Gobble, Gobble, fellow pilgrims!  Are you concerned about your precious metal stores and stocks this close to Turkey Day?  Even though The PPT has assured us that these are the stuffing days for such metals coursing into year end?

Well, I can’t say that I don’t blame you, given the vexatious day we had yesterday, where everyone and their brother decided that liquidating hard commodities was the answer to Europe’s considerable paper problem. On the other hand, with a relatively high Blees rating (a relative ratio of commerical trader sentiment over the last 18 months) of above 50% (at 74 as of last reading), I can’t see traders going against historic trends hear and blowing out of these positions in defiance of the Turkey gods.

In other words, I think yesterday was something of a panic day.  Do tell, right?  

But panic days are what we are here for… especially when they are delivered toward the end of the year and a mere week before Tryptophanatic Day.

So far the Bernank seems to be playing along, as the dollar is currently down below my target of $77.80 as revealed on Fly’s blog yesterday.   If it stays down there, I believe we will have a chance for a sustainable bounce in play on all the PM’s and even the much beknighted silver that so many were moaning about here yesterday. 

Before I show you my silver chart, I want to remind you that it was junior golds that I thought would provide the biggest bang for the buck here.  That should still be here, and outside the old favorites of SLW and EXK, I would probably avoid getting too crazy about silver miners until we see a rebound, and then a re-test of yesterday’s levels. 

That being said, I note that AGQ weekly is still well above it’s long term trend line.  And while yesterday I thought perhaps we’d get a test of that line, I think we may even open higher this morning (above $60), and if so, I might actually begin adding to my 50% positions here.   The stops are pretty obvious on the weeklies, but you may not want to set them below the trend line if you are more of a short time type.   In that case, I’d recommend a stop below $60, and a “wait and see” going into next week.  

Keep in mind that Friday after Tryptophan Awareness Day is often one of the best PM days of the year (although not always long lived).  Here’s my latest on “fast money” AGQ.


Given the oversold levels of AG and even of the more stable $HUI (we missed the 200 day EMA ($552) by a hair yesterday, and may test today, but we did bounce right at the reliable 34 week EMA as well), I will be looking to add to a number of positions today.  

Keep in mind a number of caveats…

1) If the dollar index (DX-Y) breaks back above $78, which is the 61.8% Fibonacci retrace on the long term weekly, I will take these adds off

2) If the $HUI breaks below it’s 200-day EMA (approximately $552), I will take these trades off.

3) If the POG breaks below $1700, I will take these trades off.

Again, I am still not convinced that any of the above events means our traditional Santa Claus Gold Mitzvah is off for this year.  In fact, it probably just means the rebound will be pushed into next week.

That said, one must take some precautions, and those levels are good ones to pay attention to.

Perhaps we will revisit this weekend, if I don’t have 12 kid parties and 15 lacrosse/field hockey/Quick Recall games to attend.

My best to you.






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Searching In Alf Country

Nah, I’m not really looking for him, but I have been out here doing various “tings dat need to be done” (sic), and I’m sorry I’ve been neglecting you all.

This is sure one odd market, with the dollar, earl (sic), gold and the CRB all rallying at the same time.   This seems to synch with my thesis that the world if finally realizing that all the paper money out there is going to get printed down, and, despite the dollar being the strongest rotting zombie in the room, it might be time to start hedging that inflationary bet soon.

Of course the rise in earl may also be related to other exogenous factors, not the least of them being the threat that Tehran will soon receive a Hasidim Bomb to the tuchus, if you parse my gefilte fish.   Weather Israel has finally been “greenlighted” on that particular delivery by the U.S. or whether they’ve just lost so much respect for 0Bama that they just don’t give a schmeckle is not yet clear.   It certainly would behoove the Zero Administration to have an obfuscatory Middle East war (not of their own making, of course) give them a chance to portray President Zucotti as “Commander in Chief” to boost his Q ratios.

But that aside, I think we’re probably in a good spot here for silver and gold into Turkey Day.  I am not buying any options or anything, but I may do so after the next daily cycle low is in the rear view mirror (I’m thinking that will be the week after the Turkey gods visit, soon after Black Friday).   December has usually been a good time for we of the golden bug variety and I don’t expect this year will play out much differently.   So let’s make sure our powder is ready, and get ready to be opportunistic.   When I get home tomorrow, I should have some charts for you.


One other quick story, before I get back on my Alf-hunt.  File this under the “Small World” folder —   I had breakfast with one of the original investors in Teavana this morning.  He waxed incredibly enthusiastic about their future in a world of budding Tea-ficianados (sic), whom he believes will soon stride the earth (or at least high end shopping malls near you) with pinkies extended in an especially aggressive, though thoughtful, manner.

Be assured, however, that this guy has already made some 20x his initial investment as of the IPO, so one has to ask oneself — how much of the apple has he left for you?   He would claim plenty, of course, and I will continue my due diligence.

Best to you all.


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