$1800 Gold?

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I was off all day doing God’s work, so I won’t go into any elaboration. I did take a swing low trade of  EDC and ERX, just for shitz and gigs.

As those developed I was up over 2%again today.   Still I am wary.  Gold is continuing to grind up and silver is somewhat lagging.  I can only takes so much, but I’ll be sure to let you know when that tipping point arrives.

In the meantime, this is an excellent time to join The PPT, if you haven’t already.  You will see my action a lot quicker there than you will here.  Don’t be pennywise and pound foolish… step up to The PPT.

 

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[youtube:http://www.youtube.com/watch?v=34ag4nkSh7Q&NR=1 450 300]

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I had a Sargent Schulz moment this morning and, as a result, ended up selling “nossing.”

As you may recall, we opened kind of weak in the miners, and I decided to hold off til my usual 10-11 am period to dispose of some stocks.   But we began rallying shortly after the open and it looked like gold was trying to hang in there.  Generally, I would not recommend this line of indecision and I would enjoin you, rather,  to “follow your plan” at all times.

Sometime, however, my “gut” tells me that I should stay my hand.  Often times allowing for a little patience, and “not trading” instead of pro-actively trading, I’ve saved myself considerable heartache and regret.

That doesn’t mean I won’t be selling tomorrow, however, even as the dollar drop today tells me it will be difficult for gold and silver to break down any time soon.  What I may be doing instead is selling a portion of some of my fatter gold plays (and maybe some silver if we discontinue our current rebound) and investing in some “fast actin’ Tinactin” recovery stocks, like EEM, QLD, TNA and perhaps even some ERX (sorry Cain!).

I would be loathe to abandon the recovering baser metal plays as well in this snap-back, so I will be inspecting TC, TCK, TIE and even some AVL tomorrow.  Last, take a look at two good beat-downs for some fast flash action — CREE and PBR .  These are two of my old favourites which have fallen considerably OUT of favor.   They may be worth a spin of the wheel.

Best to you all.

 

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[youtube:http://www.youtube.com/watch?v=rVAD8Zl5ngg 450 300]

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Looking over my charts this evening (no shoulder devils or broken elevators), it seems that while the price of gold is doing the Heschel Walker down the field, the metal’s miners are lagging behind like a fat man with smoker’s hack.  This gives me some pause and has me with my finger on the trigger.   Despite minor wins today in AUQ, AUY and ANV, most miners that didn’t start with “A” were having trouble addressing the field.   Moreover, silver struggled at the $40 line and gave it up by the end of the day.  As a result, despite gold being up nicely, I was still down in my miner-saturated portfolio almost 2% overall today.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I’ve seen this play before (gold up, silver and PM miners lagging) and I don’t intend to stick around to see what comes of it again.  I will likely sell some portions of my miners tomorrow morning and then hedge the rest with sold calls.  I  will also launch the remainder of my  NUGT and DGP (what remains of them) even as I’ll  likely hold on to my GLD and SLV positions for the duration,

I will then likely  spin some of the newly raised cash into a few rebound stock positions to take advantage of a bounce I feel certain shall finally come tomorrow as we test the depths of 1090 and perhaps lower.  I am again looking at QLD, TNA, EEM and possibly, quite possibly EDC again (very small ball!).

Be well and be wary, my friends.

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It’s kind of an odd feeling, really. Seeing that I’ve been ranting about the U.S. unfunded liability overhang and its one logical solution, you’d think I’d be out there wagging my finger in peoples’ faces and doing a touchdown dance as our debt is (symbolically and politically, I know) downgraded from “pristine” once again, and the rout of the U.S. dollar is on in earnest.

Instead of taking great joy in $1,700+ gold and $40+ silver I’m seeing tonight, and preparing myself to buy others’ margin calls tomorrow morning, I’m sitting here more than a little bit numb.   This is still my country after all, and it’s still a punch in the gut to see it caught in a debt trap of its own construction.   Yeah, we saw it coming, and that’s why we’ve been building a fortress of gold and silver to shelter us.

But will it be enough?

I honestly don’t know.   For all I know, my miners will get waxed along with the rest of the market (if in fact the market doesn’t just head fake completely tomorrow).   My sturdy ETF’s might malfunction, my options might turn to gruel and even my physical might be tough to transfer if the President decides to go “Full Metal Franklin Delano” on us.    Let’s face it folks, it’s all fine and good to prepare financially, but we are entering into unchartered waters here, and it’s not like we’ve got Horatio Nelson at the wheel, here.

I really didn’t think we’d arrive at this hour this quickly — in 2011.  However, the combination of torpid growth and high unemployment have hit tax collections to such a degree that the current rates of spending have blown a hole in our debt capacity well before we expected in the mid 2000-teens.  There will be painful choices ahead that will make this summer’s kabuki theater play look like the first round of Let’s Make a Deal in comparison.

I don’t doubt they will include tax increases, and likely across the whole bulk of the citizenry.   There are just not enough wealthy people with taxable income around to bring us to any sort of solvency — even with massive cuts to the Federal budget.  No, we’re going to have to go back to the old ways — where everyone contributes at some level, and there are no more free-riders.  If you try to get this done on the back of “him behind that tree,” you will inspire nothing but enmity in the capital providers, which will in turn only drive our economy to darker depths.

I am hoping this shot across our bough will be enough to drive our politicians to a serious assessment of our national dent — both on and off-balance sheet.  If instead this opportunity is squanderd and the pols decide it’s more electorally profitable to scare old people into believing they’ll be left high and dry at the prospect of any reform, God help us all.

In an event, we should have a good day in the gold sector tomorrow.  I will be looking very closely at the action not only on the physical metals themselves (gold, silver, platinum), but also at the $HUI to keep an eye on the miners, and on AUY in particular.  It seemed to take a much lighter hit last week on the pullback, and that may mean it’s getting ready to really take off after that long consolidation.

Good luck to us all.

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[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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