(Slowly, slowly now… no need to be hasty, but I like RGLD and AEM a lot.)
(Slowly, slowly now… no need to be hasty, but I like RGLD and AEM a lot.)
What do you know? After trying to fake me out by blasting past my $79.80 target today, the dollar capitulated and sold off deep to about $79.25 at the lows. It’s now about $79.40.
I think earl and gold are the plays here right now, and if you are not in my two “Samurai 7″ earl plays, COP and PBR, then you want to really think hard about them tomorrow. That COP is just too phat at 8x trailing earnings and a nice yield to boot.
Moreover, I think it’s safe to say that SLW was the call for today. Unfortunately, as I recounted in the comment section of my last post, I missed my buy stop by about ten cents. See what happens when you try to get finicky like that? I think I’m better off just buying at market sometimes.
In any case, the PM trade seems to be back on for now, and besides my favorite silvers like AG and EXK, I would be looking to the gold juniors, specifically GDXJ (the ETF) and AXU and BAA if you can stomach the volatility. Otherwise, AUY, GG and RGLD are looking good here, Lucy.
Best to you all.
Get ye some vampire gold!
Time and time again, I’ve stood here and recounted the reasons why I stay away from the large cap gold miners like AEM, ABX, NEM and even GG (though I do own a little of this one from the Wheaton Gold days). Sure, these are all fine old girls, but they often end up on the wrong side of an acquisition play which then ends up trashing their stock price in a volatile gold market.
That means these big hulks are generally buyers, for the most part, as their management team has little to do but acquire more assets in order to expand away from relatively diversified and well known properties. They need new territories, fresh blood, new meat; and the highest percentage way to continue drilling on profitable properties is to acquire them from juniors who have done the sweat work to seek them out.
Well, it seems my lonely EGO has gotten all egotistical on me and wants to be a “playah” like the big boys. No more holding it’s hand out as trade bait for the majors, Eldorado Gold is officially leaving the middle-market gold mining community in its dust and going gold speculating in Turkey, Greece and Romania.
Yes, you got that right. They’re offering $2.5 bn of their own stock in order to buy a company (European Goldfields) that is looking for gold in respectively, the next Islamofascist hot spot, the First Beggar of Europe, and oh yeah, a place known for producing pickpocketing gymnasts with facial hair and night dwelling blood suckers without.
That should work out well, fellahs. Probably very little nationalization risk you’ve paid for there….
In any case, these M&A purges usually overdo themselves, so my beaten down EGO is probably a good pickup here tomorrow morning after what I expect will be a final washout. There’s support at $12, but I’m not sure we’ll get that far. Nevertheless, I’ll place my bets in that area, hoping to catch a bounce.
Oh, and I think everything else will bounce as well. Most especially earl and gold. So tomorrow, if I get my flush, I’m going to throw down for some NUGT and for some ERX.
Don’t worry, my stops will be tight. I’m not a masochist, after all.
Best to you all.
I made good on my threats today, and took everything down to the 30% level on my personal accounts.
I was up an average of almost 5% across a number of different portfolios and I finally said “enough is enough.” I am keeping 30% invested, with the equal expectation that we could hit a precipitous downdraft in the precious metal sector at any time, just as we could shoot past $2,000 gold in an eye-blink.
I care no more, as at this point risk avoidance has become very important to me. If that means I miss the next $200 in gold on 70% of my portfolio, well so be it. It’s very possible we could see a break past $50 in silver as well, and again, I’ll have no nonsense from any of you about it. Really, I mean it. Just shut up now.
And yes, that means I sold large chunks of AAU, AG, AUY, ANV, EGO, EXK, GDX, GDXJ, GG, MVG, NG, NGD, NXG, PAAS, RGLD, SIL and even beloved SLW.
And I blew out the rest of my NUGT as well.
And no, I am not abandoning the PM’s as a theme now, and won’t abandon them should they continue to skyrocket in flight to many more afternoon delights this late summer. I am willing to wait for them, however, and to examine “other areas” whilst they frolic about like mad sturgeon on lady’s night at the Aquarium.
One of those “other areas” includes my old friend, Mr. Skiffles — SKF. Along with his rebrobrate alchoholic brother, FAZ-tard, I believe Mr. Skiffles will be getting some nice exercise this second half of the year. One of the reasons is the behavior of BAC, and now, most recently, the troubles of GS, and it’s Waspy rival MS.
Another is the critical structural problems of Europe erupting again like plague boils on the carcass of its major banks. This is a contagion that may yet again bolt across the Atlantic and may even explain the impolite selling vigor in some of our larger institutions. Will the Fed be there to save their lying souls once again?
Too big to fail, you say? Maybe, but while “fail” might rhyme with “bail,” I wouldn’t be too sure equity holders won’t be left holding an empty bucket this time around. Be warned, friends, storms approach.
Peace be upon you.
Interesting that it took us only six days for $HUI to move back to support and re-test the lows of the other day. Interesting as well that the miners held support despite the lower values of both underlying metals (Silver and Gold).
Let’s have a look at that chart again:
Let’s not quibble, here… we again stand on the edge of the knife. Note how close we are to a 50-200-day EMA cross over. That would not be a good sign for anyone, and we are going to need a heck of a rally to pull those two nearing lovers apart again. RSI continues in our favor– if only moderately so — even as the slow stochastic is pointed firmly in a southerly direction.
I’m not going to vacillate here. We should be ready to cut our positions to where we are comfortable with another 50 point southerly move in the $HUI. If we break support at $494-5 or so, then I think we will be headed that way.
All that said, today’s postive divergence action in the miners may indicate at least a short term bottoming in the downward action. Our trusty negative ETF for silver — ZSL — has registerd three “overbought” days in a row on The PPT. This is unprecedented in the history of The PPT, albeit a relatively short data set. We also saw the iShares Gold ETF (IAU) show up on the Wall Street Journal’s Buying on Weakness charts, along with both GG and SLW — two very popular miners in gold and silver. All of these indicate an appetite for miners that may be setting aside the current fluctuations in the underlying metal.
What’s apparent, however, is that we will know very soon what direction we are going in. We cannot remain at the support level forever. We shall either fail here, or make another attempt at the 200-day EMA. The action from there will determine our more intermediate term prospects.
Keep an eye on the Dollar Index. It looked sickly again today, and if it breaks down through that $75.20 support, we may have “game on” once again in the shiny metal sector.
You bring the dough, I’ll crank me goooolden pasta machine.
Have you just arrived at my blog after visiting the site of M. Le Docteur de Le Fly? Did you watch that video with the eerily calm-voiced man who is sketching our collective doom via Youtube videation? Are you now in need of a mug of chamomile tea in order to calm your nerves?
Well, goodness knows, there’s other comfort foods available for your consumption, including Jake’s yummy pasta. Remember this [[AIPC]] name from the other day’s post “Pennies for Pennes?” Here was the original chart from 10 days ago:
And here was Friday’s close — a mere week later:
Keep in mind, that’s a launch off support in one of the worst week and halves of trading we’ve had in 15 months. Admit it, you didn’t touch this stock, because you thought maybe I was nuts, offering Italian carbohydrates whilst the Greeks burned the Parthenon down. But you must keep in mind that trending stocks that display relative strength in bad markets are generally some of the safest names you can own in a storm.
I think [[AIPC]] may take a rest/hit tomorrow, and it may be a good time to scoop some up. Don’t wait too long, however. There’s someone after this one, I think, and he’s/she’s/they’re no piker.
Speaking of strength in the storm, let’s not forget that [[GLD]] and [[SLV]] have been acting very cheery in the face of this Eurotardation, much to the chagrin of Mr. Samsonite Hamburg-ALL-er and his boss, a Mr. The Devil Dog. What’s more, even the miners, which tend to wane in sympathy with the overall markets, are showing strength.
If you watched M. le Docteur’s scary video, you may find the answer therein. Me, I’m not going to invest in reverse-Oliver Stone type fright films, but I do know a trend when I see one. As you can see, my plan remains the same, and so does my target for the Amex Gold Bugs Index [[HUI]] :
I like what I’ve been liking for months now, but I may not have mentioned them all, so here are some look sees:
Gold miners (Large): Goldcorp Inc. (USA) [[GG]] , Yamana Gold Inc. (USA) [[AUY]] , Newmont Mining Corporation [[NEM]] , and [[GDX]] for the grouping
Gold miners (Medium): Allied Nevada Gold Corp. [[ANV]] , Eldorado Gold Corporation (USA) [[EGO]] , IAMGOLD Corporation (USA) [[IAG]] , Gammon Gold, Inc. [[GRS]]
Gold miners (Small); Golden Star Resources Ltd. (USA) [[GSS]] , NovaGold Resources Inc. (USA) [[NG]] , New Gold Inc. (USA) [[NGD]] , Northgate Minerals Corporation (USA) [[NXG]] , [[BAA]] , Rubicon Minerals Corp. (USA) [[RBY]] , Exeter Resource Corp. [[XRA]] , Taseko Mines Limited (USA) [[TGB]] and the catch all [[GDXJ]]
Silver miners: [[PAAS]] , [[CDE]] , Silver Standard Resources Inc. (USA) [[SSRI]] , Hecla Mining Company [[HL]] , [[EXK]] , [[MVG]] , [[SVM]] , and the catch all Apex Silver Mines Limited [[SIL]] .
Royalty plays: Royal Gold, Inc. [[RGLD]] and Tanzanian Royalty Exploration Corp. (US) [[TRE]] for gold, and my baby Silver Wheaton Corp. (USA) [[SLW]] for silver.
Best of the litter – Silver Wheaton Corp. (USA) [[SLW]] and [[PAAS]] for silver exposure, then Royal Gold, Inc. [[RGLD]] and [[GDX]] for gold glamour (sic).
Best to you all, have a nosh of rotini, get some sleep and do not let the Samsonite Hambug-ALL-ers bite!
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