Krull Leaves the Poker Game for a Quick Smoke Break
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Up 3% yesterday, even with all my hedges still in place, I must bow to the volcanic power of the precious metal rebound we experienced yesterday.

That doesn’t mean I’m abandoning my post on the 12th slippery rung of the main municipal sewer — the cosy seat next to the extrusion pipe but before the extrusion weld.   No, I’m still expecting a pullback today from yesterday’s Ode to Joy/Bunny Rabbit Massacre, unbounded. 

But the dollar (seen on the intraday as [[UUP]] or DXY) still continues to fall off here, and I’m wondering if we will ever get back up to that $80.10 or so pivot (on DXY)  I’d talked about as a trigger for another downturn last week.    I won’t be surprised, however, if we get another exogenous shock out of Davos, the PIIG’s or even President Obama’s recently unveiled near $4 trillion FrankenBudget. 

For now, I’m liking what works on the rebound, and thus far, it’s the fast movers of the junior golds like Allied Nevada Gold Corp. [[ANV]] , Eldorado Gold Corporation (USA) [[EGO]] and “the X-factor” — Exeter Resource Corp. [[XRA]] .   I also like IAMGOLD Corporation (USA) [[IAG]] and Royal Gold, Inc. [[RGLD]] of course, and Lindsay made a nice rec yesterday on the nicely pivoting Taseko Mines Limited (USA) [[TGB]] .

Of course silver is my true Tsar Bomba play in 2010, as it has been lagging the 2009 move in gold, along with platinum [[PTM]] , Stillwater Mining Company [[SWC]] and palladium [[PAL]] .   Right now, in this first updraft, I like the double silver play [[AGQ]] a whole lot, and of course my core group of miners — in order — Silver Wheaton Corp. (USA) [[SLW]] , [[EXK]] , [[PAAS]] , [[CDE]] , [[SVM]] , Silver Standard Resources Inc. (USA) [[SSRI]] and the lowly Hecla Mining Company [[HL]] .

All of these should be gnawed at opportunistically, as one would a bread wheel from the boulangerie, deep under the steam pipes of Manhattan.

I am still not taking down my hedges (in  [[SPY]] puts and [[QID]] and [[BZG]] ), and will happily bleed money on them here, as that insurance policy has served me well these last weeks.   Nothing could please me more than taking them down at lower balances, however, as that would mean all of my other plays are working well, as they did yesterday.

Don’t forget about the banks, here, as they’ve never really suffered much of a pullback, even in last week’s deluge.  Today, they seem to be leading the red dogs, which may turn out to be an opportunity for you.   Again, I like BB&T Corporation [[BBT]] for the longer term hold, Fifth Third Bancorp [[FITB]] and Huntington Bancshares Incorporated [[HBAN]] for the Ohio pop, and Pacific Capital Bancorp [[PCBC]] for the lotto play (stay small and remember, it’s only a game).

Best to you all, First Amendment scholars.

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Busy, Busy, Busy.   Yeah, you got nothing today, but I threw some calls down in The PPT, because theys mah peoples, and theys payin’ the bills.  So sorry.

I bot some  more Silver Wheaton Corp. (USA) [[SLW]] calls — 40 more June $11’s at $4.30.   That brings my tote up to 160 in that class.   Yeah, there might be some more pain in this name, and in my other precious plays, but you know what?

I’m not going to get overly concerned. 

 I’m shrugging off this “Volker scare.”

I say here for you — it’s bullshit.   Rhetoric.  Albumen.

   I knew we’d have some sell-off and the PM’s were way ahead of the rest of the market in this cycle decline, which means that they will likely be done before the rest is too.

I’ve been adding tons here on Friday and today, and as I mentioned I was actually up at Friday’s close.    Not so much today, but that’s only because my hedges “gave back” some of Friday’s wins.    Those are the kind of losses I can accept.  I consider that the equivalent of paying off Sal & Tony for “protection.”    If we go bull green from here, I’ll be happier than Harpo at the Thai Masseuse convention, and I’ll sell those hedges at a loss, if necessary.

But now, they stay, even as a I load up on 4k more [[EXK]] at $3.45.    2k more IAMGOLD Corporation (USA) [[IAG]] at an unfortunate $14.31 (again, I’m not worried), and 400 more Royal Gold, Inc. [[RGLD]] at $44.52.

Between today and Friday, I’ve been loading up on PM’s and banks.   I didn’t add any banks today, but I think I may take a third swipe at Pacific Capital Bancorp [[PCBC]] and BB&T Corporation BB&T Corporation [[BBT]] .   One other playah that I bot last week is Fifth Third Bancorp [[FITB]] .  I may add this one as well tomorrow.

I may  look at coming out of my final [[GDX]] and [[SPY]] hedges tomorrow as well, as they are option hedges.   My only other remaining hedges besides those are [[QID]] and [[BGZ]] , which I will likely hold until I’m sure we’ve turned back to the green.

Make no mistake, I’m extremely bullish on the continuing inflation trade here.  Bernanke will remain, and so too will the continuing flog of the dollar.   Play that game by buying select equities and precious metal bangers.

Bless you all, and I mean that.

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No, it’s not what you think.   I’m talking about  a jump to value ovah heah.  

Getting ready to add even more Silver Wheaton Corp. (USA) [[SLW]] this morning at $14.87 (announced on The PPT yesterday) as I have a longer term buy-stop in at that level.   Also liking Allied Nevada Gold Corp. [[ANV]] at these ridiculous levels as well.  

The one thing that’s great — and horrifying – -about these PM miner markets is that  you are never really “out of the game” until that final ridiculous blow-off top.   There’s almost always an opportunity to grab shares cheap thanks to the high volatility, and more important, low float aspect of these markets.

I am hoping for a nice hard sell off into the 10 o’clock time frame.  Hard enough to make one’s kidney’s seize up like they’ve got hold of a spot of rancid hot cawfee.  

I want to buy into that fear this morning.   I am putting on the armor of steely determination now.   

For your bennies, I’ll be looking at the gems — not only the above mentioned two, but Eldorado Gold Corporation (USA) [[EGO]] , Royal Gold, Inc. [[RGLD]] , [[EXK]] , [[PAAS]] , IAMGOLD Corporation (USA) [[IAG]] and yes, Chanci, even [[SVM]] for the first time for me.

Don’t forget also about the bank stocks I’ve mentioned — BB&T Corporation BB&T Corporation BB&T Corporation [[BBT]] , PNC Financial Services [[PNC]] , Pacific Capital Bancorp [[PCBC]] , Huntington Bancshares Incorporated [[HBAN]] (watch for earnings on this last), and the two LED sweeties — Cree, Inc. [[CREE]] and Veeco Instruments Inc. [[VECO]] .

Last, note the ags are again on the march.  My favourites here are The Andersons, Inc. [[ANDE]] , Sociedad Quimica y Minera (ADR) [[SQM]] and of course, the Franken-Corn Friends at Monsanto Company [[MON]] .

I hope to have more for you later….  Hit ’em low and hard.

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Mr. Limm Likes Cash!
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We’re getting another mini-rally in the greenback, thanks largely I believe to the perceived death of Obamacare and the attendant printing those increased expenditures would have brought with them.    Of course, there are trillions in deficits rolling down the pike with or without socialized medicine on the table, so I don’t expect this dollar bounce to be particularly long lived.

Let’s have a look at  our dollar proxy [[UUP]] to see what we might expect.   First the daily chart:

As you can see, we gapped up pretty significantly yesterday, but we’ve been turning up for over a week now, stochastically speaking.   I don’t think it’s a major coincidence that the dollar rebound coincided with the increasing possibility of the Dem’s losing their filibuster-proof Senate and the markets perhaps getting the notion that spending might slow.   That said, there’s already many wheels in motion on the spending front, and I think perhaps this move reflects more “hope” than reality for the currency markets.  

As you can see, on the dailies we’re running into some decent resistance at both the $23.20 mark and then at the 200-day EMA at $23.32.   We’ll have to see if those levels hold, but looking at the weekly chart, you might think they will not.  The coil on the various oscillators seem to indicate we’re not done with this rebound yet:

As you can see, my near term weekly target at the 34-week EMA ($23.21) coincides with my above daily targets.   However, if that level is breached, it looks like the next levels of serious resistance will be $23.75 or so — which is a mile in terms of overall market, and especially commodity reaction.   

So be prepared to gird your loins if the dollar continues to strengthen.   For my part, I will be laying in wait to accumulate back more of the silver and gold names I dis-horded in December.   I added more Silver Wheaton Corp. (USA) [[SLW]] under $16 yesterday, and began buying Fronteer Development Group Inc. (USA) [[FRG]] for the first time at $4.87.    I like how it pulled back to the breakout area from the mid $5.20’s, as I had hoped it would.  

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In the mean time, it’s seems the banks really like this dollar move, as our favourite (sic) bank index (that Jeremy won’t fix the price indicator for) [[BKX]] has been cheering on this dollar move like they use them for inventory or something.

What’s wacky is that President Obama is currently jaw-boning the hell out of the banks with a threatened “extra-tax” to “pay back the American people” (despite the American people being paid back very favorably for TARP by all but the worst Congressional satraps at Fannie, Freddie, GM and Chrysler who, needless to even mention, are not included in aforesaid punitive tax).  

Could it be that everyone is whispering to one another and saying “he’s bullshitting us?”   Maybe.   Could it also be that this just today new threat from Goldman’s Favourite President about “limiting the size of banks” is going to end up yet another barrier to entry which will — soo-prize! soo-prize! — end up benefitting the largest banks by limiting competition?

Would Congress really do something like that??  (Stifling laughter)

Well, whatever the cause, the banks are off to the races like a drunken Irishman on Derby Day (or “like Jake”) in the last two days, even in the teeth of an overall market downdraft.    Check out the Index That Shall not Be Displayed — $BKX :

“What the horse,” no?

And now look at a current Jake Favourite, as I’ve been mentioning on The PPT for these last few days, Southern Powerhouse BB&T Corporation [[BBT]] :

Looking good, no Cisco?  

Here’s the weekly for the longer term play:

You can see my ultimate target on this one is $38, and if things continue as they have been, I don’t think that will be a long wait.   For the gamblers out there’s Pacific Capital Bancorp [[PCBC]] which Ragin’ Hat Tipped me towards a couple of weeks back at $1.08.   It’s been berry berry good to me.  I also like Huntington Bancshares Incorporated [[HBAN]] for the potential buy-out and PNC Financial Services [[PNC]] and UBS AG (USA) [[UBS]] for “best survivors” status.     For large banks, I continue to think JPMorgan Chase & Co. [[JPM]] will end up on top.    

Best to you all.

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[youtube:http://www.youtube.com/watch?v=kCvIw7DMHXc 450 300]

Courtesy  of my 12-Year Old:  the New Fly Theme Song!

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I mentioned today that I was looking at banques, and by Banquo’s Ghost I’m excited by what I’ve been seeing…  Let’s look at the “big bank index” first in [[BKX]] —

Sure, it’s overbought, but it’s also broken away from EMA’s that were keeping it down since Mid-October.  With the strength of this move, you have to believe there’s more juice in the banks, and consequently, the market.

Even more interesting is the smaller cap regional bank holding ETF [[KRE]] .   It’s not so overbought and really just breaking out today.  

It’s full of crazy stuff like Bank of Hawaii Corporation [[BOH]] and East West Bancorp, Inc. [[EWBC]] , but that’s not the point.  

At least not for me. 

What it means to me is that the regionals are getting healthy, and what’s more, getting bought in this market.  Check Huntington Bancshares Incorporated [[HBAN]] for an audacious example, but I like the stronger more conservative plays like PNC Financial Services [[PNC]] and BB&T Corporation BB&T Corporation [[BBT]] .  

We’ll explore this more next week, perhaps after a bit of a drawback from all this giddyness.   Or Jake Gittes’ness, if you will.  

 The good news is that, because we are coming out of a consolidation, we should have some nice low hanging fruit to gather, ovah heah.

Best to you all.

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