Joined Apr 19, 2009
721 Blog Posts



What’s that sound, you say? Those of you with extremely sensitive hearing probably heard a dog whistle this morning, after the absolutely execrable unemployment numbers came out. Given that the increase in unemployment, the lack of job growth and the near-frozen economic capability of our scared scat-less private sector leaves the Powers that Be with very little in the Hope and Change department, the only remaining response is a toot on the dog whistle.

And who’s that St. Bernard that’s come-a-trotting with a big barrel of printer’s ink secured beneath his hairy jowls? Why that’s St. Ben-ard Bernake!   He knows that there’s no FacePlant Book rally coming to secure the 2012 elections and therefore his place on the Iron Throne of Westeros.  So the only other plan to help us out here is to pump the press and let the liquidity flow.  Heck, what are you going to do, anyway? Buy Euros??

No, but there’s always RGLD, GDX, GDXJ, SIL, SLW, EXK, AG, ANV, IAG, and of course, BAA.  Tons of other “beaten downs” as well that will make someone a lot of money, but as you know, my time here is limited.

Go out there and feast.  It’s Printing Day.

Best to you all.



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Ten Year Opportunity?

Blood in the Streets
Ladies and Germs I love it when my pain becomes your gain, and thanks to my “way too early” entry back into the precious metal miner market with both hands full of ham, you more cautious readers will have the opportunity to enter into the severely beaten-into-disability gold and silver miner market, which we’ve always characterized (lovingly) as Baby $HUI. One can best participate broadly in this market using GDX and SIL (and to a lesser more risky extent, GDXJ).

I am hoping the following chart will show up, as I am posting it on the rogue computer, but if not I encourage you to look at the twelve year monthly chart for $HUI, which limns the extent of this current bull in both gold and gold miners:

Note how we are oversold to an extent not seen since the beginning of this very bull… in fact, to an extent even deeper than in late 2008! That’s pretty incredible folks and indicates a strong ability to bounce hard here, provided that long term bull line holds.

Now I do expect we’ll get a pullback and maybe even two from this strong resurgance, as the various bottom scrapers and chicken littles bail with a quick profit, so be cautious. Go small here in this first wave, no matter how tempted you may be to go all in. You should have plenty of opportunity, all the way to the $500 mark and maybe even $520 on the index.

Best of luck and fortune to you all.


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Greetings from the Ceme(n)tary!

Yes, that’s me, under the stone, there. Actually, it’s what’s left of me after I burned up in a fiery husk doing the classic “buy at the bottom” move.

Now I just sit and wait as I watch my accounts draw down. Luckily, I don’t need the dough right now, so I can afford to play the longer game here. I still have about 10% cash left after deploying into a number of bounces over the last two weeks. I think those bets will pay off in the near term, and I may even take something off the table as a result.

But things continue to be insanely busy here, so one solace is I can only look at the market a couple of times a day. Yesterday, I had two sit down lunches with two completely different parties. Usually I can schedule around anomolies like that, but in this case, I just could not, and had to take both meetings.

Last week, I had to take two separate simultaneous conference calls. I’d never done that before, and last week I had to do it twice. Do you know what the level of difficulty on such a stunt is? First, you have to have the right equipment. In my case, I had my office phone on speaker and my cell phone in an earpiece jack. While simultaneously listening to both calls (one of which was playing in my right ear), I had to be able to “respond and mute” at a moment’s notice in order to speak to one or the other respective parties. I felt like a schizophrenic dj at a retro-70’s disco party.

I am looking at some long term charts right now, and $HUI is approaching a ten year monthly line right now (about 350) that looks like good support. But we can bounce at any time now, as we are ridiculously stretched below the 200 day EMA (almost 26%!!), and that means we are getting stretched to the utmost…

Hang in there, my friends. My next post will feature a phoenix.


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Mincing In



As some of you know, I’ve been weathering this storm by deploying cash sparingly into what I consider to me vastly oversold conditions in the PM markets, especially the miners.  Given historical metrics, the current $HUI and $XAU are pricing gold in the $800-1000 range.   Needless to say, this has historically been an opportunity for those beleagured names.

Now I know the PM space has not been a happy one as of late, but given that nothing has changed with respect to the global liquidity situation, I am not convinced that there is some change in the current bull trajectory afoot.   It appears that we are now approaching a long term support area as well.

As my good friend Gary Savage over at the Smart Money Tracker has been kind enough to point out, the 75-week simple moving average has been support for this bull for over ten years now with the brief exception of the 2008 meltdown, which marked the bottom of an eight year cycle event.   Right now that line lies at $1591 an ounce, which we are (briefly, I think) below this morning .  As a result, I think this is the time to mince into the market and make some quick coins.

I was not in the office yesterday, so I did not report my buys in SLW and AEM, and I apologize.  It appears, however, I may have been a bit early.   Today, I will add to those small purchases and throw some RGLD and perhaps even GDXJ in that mix.   Make no mistake the juniors have been murdered here, and quarts of my blood are being transfused into them as we speak.   When these things bounce, however, it’s going to be swift and eye-boggling.   Go small until then, but be ready, as I think it’s going to be very soon….

Until then, I continue to be your honarable blood donor, down here at the Red Cross…




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Happy Cinquo de Derby!

[youtube:http://www.youtube.com/watch?v=leXGwhh9vEY&feature=relmfu 450 300]


Happy 5th of May, otherwise known as the First Saturday in May — DERBY DAY! This is a state holiday here in Kentucky marked by its tradition of having every man, woman and child greet the dawn with a double shot of bourbon, and then proceeding downhill from there.

I don’t have a lot of time as I must get to the track to hobnob with the lords and ladies of the Jockey Suites.  I did “meh” yesterday, breaking close to even if I throw out a lost voucher for about $80 that I left in a betting machine (damn bourbon!).  I did NOT have the Oaks winner, however, because I did not listen to a suite mate (a very wealthy woman with the luck of the Irish or something going for her, as she wins all the time) who said, “You HAVE to go with the female jockey for the Oaks (Fillies) Race!”  Of course I ignored that counsel much to my chagrin as she collected a near $300 trifecta (on $2) prize.

For the Derby, this is going to be an especially tough year.   As you can see from my top video post, I always favor the Wood Memorial winner, as its one of the toughest Derby Prep races (Grade One Stakes), and its on dirt, unlike those pussy polytrack fields in California and Keeneland.   Consequently, you should always favor the dirt prep winners, and that would be Florida and Arkansas Derby winners, Take Charge Indy and Bodemeister, respectively.  Going back to the Wood Memorial, Gemologist won, to remain undefeated, but Alpha was sneaking up on his right, which might mean trouble for the further 1/8th mile of the Derby (a one and one quarter mile race, while most of these preps are one and one eighth of a mile).  Keep Alpha in your sights on this day.  As a superstitious extra, the first race I won this year (over at Keeneland) was something like “Needs More Alpha” which I picked just for its stock trading implications.

The Florida Derby was interesting also, with heavy favorite Union Rags getting a bad trip (stuck behind a number of horses for too long) but really pouring it on in the final furlong.   Huge Derby favorite jockey Calvin Borel was on winner Take Charge Indy, which has some great heritage, and cannot be dismissed because of it’s nice position at the fourth slot.  Still, watch this race below and you’ll see how Union Rags seems to be coming on in the last pole.  It’s important to remember that the Kentucky Derby is an extra eighth of a mile longer.   That means the Rags may take the longer race…

[youtube:http://www.youtube.com/watch?v=MwNRvqJzqP8&feature=related 450 300]

Last, take a look at alleged “Superhorse” Bodemeister, the Bob Baffert entry, with the blinkers off and raring to go after absolutely destroying the field in the Arkansas Derby.  A lot of people are throwing out this horse out because it was unraced as a two year old, a traditional “no-no” in the Derby tradition annals.  The last horse to win the Derby that went unraced as a two year old?  Apollo, who won the 1882 Derby 130 years ago!  Can you imagine?

But this horse is a champion, with all the specifics… great final lengths speed, nice endurance and seeming gain of strength, great enthusiasm.  Only unfortunate is that it is California bred, which has also not fared well in the Derby  in the modern era (eerily, the last California bred horse to win, Decidedly was 50 years ago this May, in 1962).  Can a 130-year and 50-year curse be broken in one race?  If anyone can pull it off, it’s three time Derby winning trainer Bob Baffert and the horse named after his youngest son, Bode:

[youtube:http://www.youtube.com/watch?v=cLPDQnVY7Mg&feature=related 450 300]



Jake’s picks (and you need a handful):  Union Rags, Alpha, Bodemeister, Take Charge Indy and Gemologist are my top five, so mix and match for your various exactas, trifectas and superfectas.   I also like SaberCat as a long long shot (only take if 30-1 or above), and I’ll Have Another and Creative Cause in the exotics.   I’m throwing out Juvenile winner and Louisville local-owned Hansen because of his bad race in the Blue Grass Stakes, losing to Irish charger Dullahan, who is also in the Derby after winning on that polytrack surface three weeks back.

Happy Derby to all!


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The Race is On

[youtube:http://www.youtube.com/watch?v=Vm5ovAtCc4g 450 300]


It’s Oaks and Derby time in the Bluegrass, and the Jakester’s stocks are plungeroonying like so many suicidal swan divers off a Wall Street skyscraper.  My response? I shrug and hold, as I know we are approaching a cycle low in the commodity sector, and gold and silver prices are hanging hard even as the stocks in the Gold Bug Index (Baby $HUI) continue to squeeze my upper heart ventricles like 45 years of excessive bacon.  There’s a reason I feel that pressure and it’s because the gold and silver miners are woefully under-performing relative to their underlying commodities… at an almost historical level:




















This chart has me hankering to add to my recent purchases, frankly.   But in the interest of capital preservation, I am going to space out buys over the next couple of days.  I am going to start with some AEM (I like the dividend), and then add to my SLW, EXK and yes, RGLD.   Three year bargains in ANV, IAG, IVN and many others.  Look around, shop carefully.  Watch the rebound back to that 200 day EMA above.  Interesting, no?

I am at the track with multiple clients tomorrow so I’ll have little time in between gambling like I know what I’m talking about and sipping juleps, but I will try to check in on you all with my fancy new phone, God willing.

Best to you all, and Happy Derby!



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