[youtube:http://www.youtube.com/watch?v=KVN_0qvuhhw 450 300]
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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 Gauging the current mood of the financial blogosphere, however, one would think the Mohawks had rescinded the Thanksgiving truce and were busy rendering bad punk haircuts to the entire Southern District of New York.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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