Just remember, all this bullcrap you are seeing today is about the dollar and it’s relationship with the rest of the world economy.   If it rallies hard here, it’s because the banks are throwing a scare into the Deflation-minded.   But if you have any questions about where the Fed is willing to go, please hit yourself on the head with a ball-peen hammer for “clarity’s sake” and consult this worthy chart once again (hat tip to DPeezy and ZH for posting yesterday).

If you are really confused, I would get thee to The PPT for a quick infusion of “brain trust.”   The wins in those fora lately have been breathtaking.  It just gets better every time I go in there. 

Back to the dollar rally — which I’m just not sure is for real, frankly.  In fact, it strikes me as more “seasonally oriented” than anything else.   You know — “September sucks, sell, sell?”   My opinion?  That bit of conventional wisdom and a box of Cracker Jacks will keep the monkeys at the Zoo from self-pleasuring, but it will get you little else in this Fed-governed market.   No, the Fed’s first job is to keep the banks liquid, credit spreads tight, and the FDIC afloat.   If you think they won’t sacrifice the dollar to those ends, then please repair back to the chart above for further ball peening.

Granted we are at a critical juncture, as you can see from the chart below.    We are right up against a long term down trend line (at about $23.45) on the [[UUP]] .  After that we have the near term 38.2% (strong) fib line at $23.57 and the 50 day EMA at $23.60.   I would tend think we have officially “bottomed” in the dollar for the near term if these prices are breached on volume.

 

Both the prices of gold and silver  are holding up here as well, which gives me some indication that if money is flowing back to the dollar, it’s not at the expense of the precious metals.   This should offer us some opportunity in our miners going forward, and even today.   The [[HUI]] is bouncing off it’s trendline as we speak.   Happy hunting.

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[youtube:http://www.youtube.com/watch?v=W0qlOEKkBWA 450 300]

I was just off reading some other blogs and I’m finding that there’s quite a bit of misery out there.  You might imagine from where that misery stems, if you are wont to read more “misery oriented” blogs than this one.

In one particular meloncholy review,  I even started to feel sorry for my friend Tim, The Enchanter.   He’s a little bit down in the jowls these days because the world hasn’t fallen off a cliff as properly prescribed quite yet.   It’s a monetary phenomenon, I says.  It’s a conspiracy of Owls and black flutes, he says.   Whatever.

I’m here for some solace for the bearish and perhaps an idea or two.   My friends, we are coming to an exciting time of year and I hope you will bear with me.  September, you see, is a traditional crap pile for all that is Equity.   Something to do with the Medieval harvest payments, or the rise of the Mayan Moon, but it’s always been our worst month for stocks since your grandmother can remember.  That should make some of our Ursines, happy, no?

The good news for we Jacksons is that August comes before it, and August marks the start of the precious metal bull season on into it’s tumescent end in Happy Claus.  In other words, it’s a good idea to buy gold and silver here in Jewelry’s Worst Month because it only gets better as everyone picks out their silver pumpkins brooches, gold encrusted turkey lame dresses and platinum filigreed Christmas chokers in the coming crispiness.

And don’t even get me started about back to school.  

Let’s have a look at our friend Baby Huey ($HUI) shall we ?  Here’s a triangle you’re going to love by next month:

You’ll note we’ll be “do or die” by mid-September.  Want to make a wager on whether we break out before then? 

Now a specific pick that I really like, and have for a while, Non-Jackson though it may be.   Here’s the old chart of New Gold Inc. (USA) [[NGD]] I gave you back on May 21st, 2009:

Now here we are three months and 45.5% higher at $3.49, but don’t thank me just yet.   I think we’re getting ready to rock the Casbah in an unctious and lugubrious manner.  Checkout what chart analysis number two brings forth:

Yeah, it’s pulled back a little on Friday, but that may mark your opportunity.  Frankly, I’d be surprised if  they bludgeoned this little junior miss back to $3.25, but if “they” did, that would be a magnificent place to throw in an order.   I know I will be looking to add here on Monday, or maybe Tuesday if we do get  second day of pullback, and I will keep you updated.  

These juniors can really move with this gold bull, so make sure you keep an eye on Rubicon Minerals Corp. (USA) [[RBY]] , Allied Nevada Gold Corp. [[ANV]] , [[BAA]] and their brethren, even as you line your portfolio with sturdy Jacksons for the coming Fall (possible pun intended). 

Best to you all.

_______________

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(Fed Chairman at Work)
___________________________________________
Let’s not get overexcited about such things as green shoots and bamboo leaves, shall we? Don’t get me wrong, I’m still not convinced this whole basket of cats in not going to just roll over and die here anyway, but what’s going on in the market has almost nothing to do with visions of recovery and everything to do with the continuing decline of the dollar.

Let me tell you, I’ve seen ugly charts for UUP before, but this might be one of the uglier, in terms of the sharp declines taken by the oscillators, that I’ve seen in a while. This tells me that the Fed and our trading allies know that credit is tightening again, and that the dollar spigot will be awash to get us through the tight September months again. Check it out:

Look at that accumulation/distribution line… what the heck? In any case, my first “back to work” market thesis reminder should be a familiar one — this is no time to get shaken out of your precious metal, hard commodity positions.

I also believe U.S. company buyouts will increase as our weaker currency provides better values for our overseas (and cross border) friends, especially those countries who specialize in commodity provision, like Canuckistan and Oz. China, of course, will also be a player, and she has shown she’ll be a willing buyer of commodity assets.

Hold tight, and watch that double bottom target area as marked on the daily UUP chart. Cheers and thanks for your patience.

___________________

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Bow down to Lord Pig!  Did you forget what Island you were on?

Don’t think you can just skip on down to the Circle and pick up the conch and blow to your heart’s content.

You cannot.

No, it’s time to get your horn rimmed glasses smacked from your face and ground underfoot, whilst you grope wildly after fuzzy-form perpetrators who’ve done away with Good English Manners.

The Jacksons took a similar blind side hit today, and you know what? I’m not given to much concern. I’ll sit up here on top of my coconut tree and munch bananas whilst I watch the devolution down below.

Yes, yes, “kill the pig, slit it’s throat!”

(Eye roll)

What-ever!
_____________

Note [[BAA]] , mentioned last night, and of which I bot 6k of at close at $2.03-.04, hardly moved today, even as the gold and silvers markets shivered and [[UUP]] peeked its battered head up? Did you note the same behaviour (sic) with previously recommended Allied Nevada Gold Corp. [[ANV]] ?

Pure luck, I assure you. All of the juniors will show some strength, merely because their time to shine is almost here. Same with the silvers. They are trying to shake, but even their now-familiar swoons seem half hearted.

Just wait here, with me atop the coconut tree. The ham hocks will be served, presently.

_____________

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Well, in the least, it’s a bounce. And it’s off two significant indicators, which gives me comfort. The more indicators, the better I feel about taking the trade.

As you know I’m already ass deep in gold and gold miners, and the [[$HUI]] is a great indicator for the unhedged (ie, usually smaller) gold and silver miners. That said, I may try to take advantage of what I think will at least be a measured bounce here to pick up some $GDX calls. Again, the chart tells the tale:

I’m looking at the September $28’s now, as well as adding some more juniors. Best to you all.

_________

UPDATE:

I bot 20 Sept GDX 28 calls @ $8.00. Possible to add 20 more… developing. Allied Nevada Gold Corp. [[ANV]] and NovaGold Resources Inc. (USA) [[NG]] on fiah. Watch biotech grenades… [[OXGN]] stealing all the air from the room. Keep an eye on [[BIOS]] .

Second Update:

Bot 1500 of IRE @ $8.10. Probably late, but… I like the look of it.

Last, an enduring hat tip to my young friend CA for [[CAR]] .
__________

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But really not a horrendous day for the Jacksonians, which gives one pause, no? 

Now the PM’s are resuming their slide, and I can’t help but think it’s “of a piece” with the Treasury’s desperate need to sell bonds here.  Again, we continue to see opportunity, as I think it’s unlikely that gold will fall much below $890-ish on a per oz. scale, and I would be shocked to see it claw back to $850.  In the event it does, however, I will be manning the one man oompah-band, complete with bass drum, polka accordian and egregiously long slide trombone in order to advertise to the world — via drum majorette high kicks — that this is the time to back up the truck and buy.  

In the meantime, I will continue to convert my more esoteric picks (non-Jacksonian) and hedges of large positions into cash for additional rodent-like hordings of shiny metals.   In fact, should gold break $900 again, I will “do my part” and for the first time since 2001 start buying physical again.   If the Comex geeks want to “play that,” Homey will be obliged.

I have included a “weighted return” in today’s review (from yesterday’s close), so you can see how much each individual position actually returns.  As you can see, the actual $150,000 original investment is up a little more than the “pick alone” number, thanks to cashing out on a few loser, and thereby having them a lesser portion of the portfolio.   As a result, I will likely add to some Jacksons soon with the cash and hedge amounts ( [[TZA]] and Cash are equal to almost $23K at this point — or 14% of the portfolio) when the time is right.   That may be soon, fwiw.

Name/			%	Portfolio	Portfolio
Ticker	6-Jul	7-Jul	Change	Value	Impact		Comments
ANDE	$            29.67	$        29.96	0.98%	$      18,091.79	0.11%		Still trending.
EGO	8.75	8.79	0.46%	8,236.23	0.02%		Hanging on, relative strength today
GDX	36.94	36.51	-1.16%	11,050.24	-0.08%		Hanging at 50% retracement
GLD	90.76	90.71	-0.06%	10,432.43	0.00%		Relative strength
IAG	9.93	9.99	0.60%	12,318.13	0.04%		One of my strongest golds
MON	73.26	72.62	-0.87%	4,259.24	-0.02%		Down not so bad, considering.
NRP	20.70	20.38	-1.55%	4,229.97	-0.04%		Sold 1/2 on break of $20.50
PAAS	17.83	17.71	-0.67%	10,636.64	-0.04%		Expected to test $17 again.
RGLD	39.04	39.19	0.38%	10,828.96	0.02%		Oversold, $38 a possibility today.
SLV	13.10	12.89	-1.60%	10,471.16	-0.10%		Oversold, but 200 week beckons (12.40)
SLW	7.75	7.80	0.65%	7,576.43	0.03%		Support @ $7.50
SSRI	18.20	17.91	-1.59%	10,418.85	-0.10%		$17 likely goal.
TBT	50.94	50.19	-1.47%	9,998.01	-0.09%		Waiting for bond market to resolve
TC	10.07	9.82	-2.48%	4,606.66	-0.07%		Could target 50 day ($9.00)
TCK	16.88	16.15	-4.32%	10,738.03	-0.28%		Gave back most of prior day.
TZA	24.34	25.86	6.24%	5,209.53	0.20%		Portfolio saver again, still 1/2 position
Cash (000)	$          13.44	$      17.69	0.01%	17,694.95	0.00%		Increased on 1/2 sale of NRP
AVG (daily)			-0.38%	$ 166,797.25	-0.40%
AVG (monthly)			-1.50%	Actual
AVG (inception)			10.80%	Return	11.20%

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