Lots of nasty things can be found at the bottom….
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This action today spells puke-ville for most, and you are probably hearing it. Just had a conversation with my mentor and he’s hearing it louder than loud from all but his oldest co-investors (he doesn’t even call them “clients” anymore). 

I knew we were approaching the end of a cycle here, and I held on hoping to catch that turn and add some of my cash to the projectile return.  I still hope to do that, but believe me I’m a bit more cautious at this point than I even was last night.  That’s just human nature, and it affects me just as much as it affects every one of you.  

There are some positives to look at for those of you who are grinning and bearing it right now in true Cement Head fashion.  For one, we are fast approaching the 52-week high for the dollar at just over $81 on the index.   It’s highly unlikely we will blast through that range without at least something of a rest.

What’s more, the $HUI is holding (as of this writing) at the $500.00 support level (sorry I can’t post a chart at the moment, but look at the weekly if you have the ability to do so).   Oftentimes the $HUI will signal a turn before the POG will.  

 Last, we still have that 34-week EMA line to think about.  Keep in mind this is options expiration week, and everyone and their mother had long calls for Santa which are now all underwater.  We may even get a swing back long before Friday, but I’m thinking that we will see some of Fly’s rubber band action to get us back above that ($1646.oo) before week’s end. 

Granted that’s almost $100.00 north of here, but you might want to keep in mind how quickly we broke this low. 

In summary, I’m continuing to do nothing with my 60% invested position.  If I were a shorter term trader I may have gone to cash a little quicker.  In this case, however, I’ve got enough “leeway” to withstand some shorter term draw-down while waiting to grab some additional return on a re-ignition.   

Best to you all.

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It’s Options Expiration Friday, and there’s all kinds of odd schtuff going on.   Interestingly, I marked up the dollar chart last night, and again could only get the title to “save” to the site.  I don’t know if this is a time of day issue connected to WordPress, or if it’s something going on with my home laptop (which is fine in all other respects), but it’s beginning to wear on me bones.

That said,that glitch allowed me to get some 20/20 hindsite on my review of last night, and that may be helpful to us all.  Note how I was looking for further dollar destruction, at least to the 20-day EMA yesterday evening:

Well, what really happened, then?  Instead of breaking down to the 20-day, the dollar soared (relatively, of course), starting at about 4:30 am (EDT) this morning,  from a break-down below $75.00 all the way to $75.76 at approximately 10:45 am, before burning out like an dynamite-filled white Bronco headed to the sun and dumping 25 basis points in about an hour. 

Was that all for the dollar today?  I’m going to go out on a limb and say yes, and attribute this morning’s chicanery to folks interesting in goosing certain options positions. 

 I say that because the price of gold ($GOLD) made a curiously similar — but opposite! — dump and go at the exact same time that the dollar did.   It dropped over $18 dollars starting at 4:30 this morning as well, from $1504/0z to $1486/oz, just as the dollar made it’s mystery march, only to viciously bounce back over $29 to $1515/oz in little more than an hour and half… 

We currently stand at a nickel over $1513/0z as the dollar tries to work back over $75.50, but my “tell” that the ruse if over lies over in my pile of Jacksonian miner stocks, which continue to strengthen and all show “highs of the day” as of this typing. 

Let’s see if my little prediction above doesn’t come true after all, despite early morning chicanery on the the part of Les Grand Shacqueurs du Monde.

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Meanwhile, if you want something more exotic than PM’s, I think you may have an opportunity in the Rare Earth Metals today, and particularly in one of my faves, QSURF:

I think this morning’s brief sell-off, which stayed above the 20-day EMA, may offer some entry opportunity for the less risk averse among you.   Best to all.

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Please, do not believe the propaganda.  Yesterday’s Wall Street Journal report regarding the possible rise in rates due to “the end of QE2” is just so much hog swallop over the septic tankard. 

How do I know this?  Because I took a gaggle at this morning’s Case-Shiller Housing Price Index, which — unsurprisingly — continues to suck giant rare Tibetan albino gorilla-monkey balls.   Why unsurprisingly?  Because the Fed has been using your fake money to sterilize bad mortgage debt securities for the last two years now, which has basically hidden the problem of overinflated real estate.  That in turn has prevented the market from deflating in the more precipitous fashion it would take in a more natural setting.

Therefore, we are experiencing the slow hiss of the deflating tire while Bernanke and Co. continue to paste their hastily chewed Wrigley’s Spearmint gum over the hole in the form of reams and reams of newly issue Benjamins.  Patch-by-Benjamin, however, is a crude form of assisting the real estate market, however, and it will almost definitely end in over-inflation of the other asset markets — including most commodities. 

We’ve already been seeing that in cotton, oil, coal and certain industrial metals and agricultural food items, but this bubble will not give our Fed and Treasury masters pause.   They are in thrall to the banks, you see, and when the third or fourth largest banking market in the country is experiencing an eleven year loss in housing equity value, that means the banks are still on the table, with their chests cracked…

And the paddles are out.

Silver and gold are already recovering today.   Be not afraid of “the Shakers.” 

Let them be afraid. 

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You all be well.  I will be on my way south again today and this evening, so I will try to check in via Crackberry.  You know the drill.

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 Indeuuuud!

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Don’t get me wrong, silver will pull back almost immediately here. And gold should have a nice refrain as well. But all the Glenn Beck modalities aside, let’s not lose sight of the big picture here.

Don’t let the closet commie Keynesians who are currently plaguing the Fly ward you away from the nose in front of your face. It seems there are those who would hew to the belief that the sovrereignity of our currency will remain, unmolested by the tenets of common sense or basic economics. In the words of Lewis Carroll — “Callou Callay, oh frapjous day!’

Nothing to worry about here right?

But then, there’s that old bogey “empiricism,” creeping up to spoil their party once again. One example?

Does this indicate an overbought investment?  Well, sure.  For the last ten years now.   In fact, that’s why perhaps the silver sister has finally begun catching up, and the ratio between the two has begun shrinking.

But there’s still quite a bit of room to go:

Even silver looks a bit overbought right now, doesn’t it?  Yes, in fact, I may take some of my leverage off early this week as a result.  That means I’ll likely sell some of the AGQ I re-purchased in the $93 and $96 ranges, and maybe even sell my SLW December $25 calls as well. 

It’s not like I’m going to sell any of my core positions.  That would be foolish, given the disposition of our currency.  The DX-Y chart is what you should be watching, rather than the ephemeral explanations of the “cake and eat it” economics students who’ve recently appeared like noxious mushrooms on these internets.

Don’t let their quibbles with Glenn Beck or any other broadcast polemicist stay you from your review of the empirical data.  The dollar will bounce, likely at $74 or so.  But that gato will be expired before you can cash your small beer change. 

Friends, the dollar is the Dallas Cowboys of the currency world.  It may have another touchdown or two in its future, but those brief triumphs will be wreathed by tragedy.

Indubitably.

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I still like EGO, if you’re looking for a latter day saint.  Also, IAG is probably a pullback look. 

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[youtube: http://www.youtube.com/watch?v=UK_CZdS0K6o&feature=related 450 300]

Is he too fat to be President?

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Governor Christie of New Joisey (that of the Short Hills Mall) rocks, plain and simple.  He is the fat, sweaty Tony Soprano Reagan of our time.   He doesn’t take the schinola from the mealy mouthed press looking to characterize him, and he doesn’t take any crap from public service union hacks:

[youtube: http://www.youtube.com/watch?v=R0Nqk9e1kfY 450 300]

That’s some serious Porky v. Porky action there, but the diff is — Govenor Porky really wants to peel the pork back from the bloated Jersey public sector.  Even better– he’s succeeding!  What better crusader could we enlist to take on the corrupt SEIU and the other public service unions living off the transference of our tax dollars?

In weeks ahead, I will likely be focused on electoral issues, as we head into the extremely crucial mid-term elections of 2010.   But whatever may happen on that date, we will still have the failed Obama Administration to cope with.  That means we need to start thinking about potential Presidential aspirants also — and I’m not just talking about Hillary.

We’ll have two years to figure out who best to put against the demagogic Messiah.   As I’ve mentioned to some, my personal choice is Mitch Daniels, the spectacular former mayor of Indianapolis and now Governor of Indiana.   Daniels took 80% of the Indiana vote in 2008 — the same year that Obama won in Indiana.  He is a special guy and very competent.

But I wanted to start out by looking at the Fat Man, because he too rocks.  Those of you closer to the Metropolitan area may wish to comment, but from what I’ve seen thus far, I really like this guy’s political charisma.   One last before I go.  This may be him at his best in  “telling it how it is” —

[youtube:http://www.youtube.com/watch?v=1ksLlAi3iIc&NR=1 450 300]

God Bless you, Jersey, you may finally have a great one after a long time in the wilderness.

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Gold should be pulling back here (finally).  Hang tight, as I don’t think it’s going to be much.   I will let you know when I release the hedges on ANV and SLW.

Best to you all.

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Not quite Infinity… but Bloody Close!

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Much to the bear-shitters’ chagrin, gold is continuing to break out.   Don’t believe me?  Look for yourself (see below).  My target is a bit past $1,300 per ounce for the near term, and then we should finally get some pullback.   At least, that’s what I’m hoping for because I’ve started hedging my ANV and this could get enraging if it continues to march skyward.   Here’s the gold price daily:

 

Crazy, no?  Well you should see silver, which has contracted it’s egregious price ratio with gold, but still stands well over 50x at 56x+ the price of gold.   Better than the 70x+ it was stalled at when I was screaming at you to buy it, but then, the world need bearded ditch diggers too, doesn’t it?

I also see a pullback coming in the miners, which will largely coincide with the near-term top in gold projected above.  The $HUI is really just a hairsbreadth from all time highs, and it too will likley break those highs before pulling back and making new bulls scream.  Note the pretty pictures:

This has been a fun ride, hasn’t it?  Who knows, maybe the Tea Party will toss all the Dems out of Congress on Nov 3rd and start their first session by making the official currency a one ounce U.S. coin with the Dog Sledder’s likeness on one side and a large glass of bourbon on the other? 

One can dream can’t one?   Best to you, my fellow idealists for liberty.

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