What’s that sound, you say? Those of you with extremely sensitive hearing probably heard a dog whistle this morning, after the absolutely execrable unemployment numbers came out. Given that the increase in unemployment, the lack of job growth and the near-frozen economic capability of our scared scat-less private sector leaves the Powers that Be with very little in the Hope and Change department, the only remaining response is a toot on the dog whistle.
And who’s that St. Bernard that’s come-a-trotting with a big barrel of printer’s ink secured beneath his hairy jowls? Why that’s St. Ben-ard Bernake! He knows that there’s no FacePlant Book rally coming to secure the 2012 elections and therefore his place on the Iron Throne of Westeros. So the only other plan to help us out here is to pump the press and let the liquidity flow. Heck, what are you going to do, anyway? Buy Euros??
No, but there’s always RGLD, GDX, GDXJ, SIL, SLW, EXK, AG, ANV, IAG, and of course, BAA. Tons of other “beaten downs” as well that will make someone a lot of money, but as you know, my time here is limited.
It’s Oaks and Derby time in the Bluegrass, and the Jakester’s stocks are plungeroonying like so many suicidal swan divers off a Wall Street skyscraper. My response? I shrug and hold, as I know we are approaching a cycle low in the commodity sector, and gold and silver prices are hanging hard even as the stocks in the Gold Bug Index (Baby $HUI) continue to squeeze my upper heart ventricles like 45 years of excessive bacon. There’s a reason I feel that pressure and it’s because the gold and silver miners are woefully under-performing relative to their underlying commodities… at an almost historical level:
This chart has me hankering to add to my recent purchases, frankly. But in the interest of capital preservation, I am going to space out buys over the next couple of days. I am going to start with some AEM (I like the dividend), and then add to my SLW, EXK and yes, RGLD. Three year bargains in ANV, IAG, IVN and many others. Look around, shop carefully. Watch the rebound back to that 200 day EMA above. Interesting, no?
I am at the track with multiple clients tomorrow so I’ll have little time in between gambling like I know what I’m talking about and sipping juleps, but I will try to check in on you all with my fancy new phone, God willing.
I don’t generally do the intentionally provocative headline unless I’m trying to get your attention. And usually, I’m only trying to get your serious attention on the breaking political stuff. Very rarely do I pound the table on the market picks, unless I think we’ve entered a special “sweet zone” where we should collectively be taking advantage.
I believe this may be one of those times.
Let’s start with the commodity gold ($GOLD) weekly chart to show where it all began last week. I’m going to use the weeklies on all of these mostly to show the consolidations and the breakouts, and also to show how much room this thing still has to run before it gets RSI oversold. The gold weekly broke out of a consolidation flag that has been forming since September:
Now let’s look at silver, via the double silver ETF $AGQ, where we are back above that first resistance support line after undergoing an RSI-divergence (again) since September:
Last, let’s have a look at the gold bug index $HUI which shows us what’s going on with the major miners. Note that we’ve been in a consolidating channel for almost 17 months now, and we have taken off from the most recent bottoming with a strong weekly push:
I think that failed channel breakout from early September that has now consolidated into a flag pattern within the larger horizontal channel means that Baby $HUI is readying itself for a final breakout to the next level. Again, the abundant room left in the RSI and the other stochastics also give me some comfort here.
Now there’s a lot of room to make money in a cornucopia of names here, and– again– I’m showing you the weeklies to indicate that there’s time left for you here, especially in the traditionally strong names like AG, EXK, SLW, ANV, AUY, and even the larger players like GG and ABX. If you are not in any of them yet, then I would certainly make sure I had a position in SIL, GDX and GDXJ in order to cover the industry as completely as possible.
As for my favorites right now, I’ll give you a couple that I think you can buy “rain or shine” tomorrow because they’ve got so much “mo” behind them right now. The first is my long time favorite and Jacksonian, RGLD:
Again, there’s just so much power in that lift off the floor. You can wait, of course, to see if we break out of that triangle, but I think that volume and price action from last week are indicating that we may get out of it as early as this week.
My other “immediate” pick is Alexco Resource Co (AXU), which I have not mentioned in at least a year. Alexco, however is betraying a consolidation pattern almost as toothsome as the one AUY broke out of late last year. As you can see, this one’s bumping it’s head on the hypotenuse ceiling of that triangle. I think with anything close to the volume of last week, that ceiling is history.
Enjoy, and partake, if you like. Despite the temporary winds against us right now, I don’t think we’ve seen an opportunity like this in almost 18 months. Make hay while that sun still shines.
______________________ Within a short number of years and certainly within the decade, we here at iBC will have created our own language from whole cloth, and the only people who will understand a word we are saying will be the slavish few who have hung on here for every nuanced phrasing and reworked 70′s-era cartoon-network pop cultural reference.
In future, iBC particpants will not seek to purchase the equity receipts of a heavily shorted security in order to force immediate re-purchase by said short sellers, but instead one will “GO HAM” on said equity receipts and save time and exertion associated with over-verbose description for other tasks.
As well, one will never speak of aforesaid unfortunate short sellers as “portfolio damaged,” or “margin overburdened,” or even “equity depleted” participants in these volatile markets but rather as members of the investment community who, good character not withstanding, have been “GRAPED,” and left for corpse-pilfering on the side of the lonely road.
Brevity being the soul of wit, such gradual neologistic replacement will not only render these fora more humorous (sic), but also far wealthier in the end. Hang on for the ride.
Today was the best day of the year for me thus far, and it’s been a pretty good year thus far. For one thing, all my precious metal positions went HAM on me today, with most breaking the 5% barrier and some flirting with 10% (like SSRI, ANV and IAG). Moreover, my two big rare-earth metal plays, QRM and AVL were also up big at over 7% and over 10%, respectively. Unfortunatley I wasn’t fully invested, having kept quite a bit of cash on the sideline for “opportunities,” and also having sold my AGQ and NUGT just yesterday to reduce leverage and risk.
I’m not as bent out of shape about that as you might think however. I still returned over 4.2% today, and now I do have dry powder with which to pick off new targets.
Some of those will be additional pickups of the “Samurai Seven,” of which only two are currently precious metal picks –AG (+13.4%) and RGLD (+6.7%). Nevertheless the full portfolio is up 11.1% since inception, and that’s despite two relative laggards in the short list portfolio.
As for the winners in the Seven, I am really enjoying this 28+% run in PBR since the start of 2012, and kicking myself for not making it my “Stock of the Year” pick. I am also well pleased with the double digit returns of DE (+13.5%) and MON (+16.5%) since our entry.
The two Samurai I shall be gobbling tomorrow, double-ham fisted, however, are my two laggards, UPS (+3.3%) and COP (-4.0%). Both have nice dividends and UPS is finally creeping through that ceiling we talked about earlier in the year. getting ready for a breakout. You cannot keep a good man down, or a good company, and these two fine specimens will do us well as the Bernakean Liquidity Parade Rustles on.
I have a daughter who was born in 2000. She’s going to a classmate’s party today, and you guessed it, the classmate is also 11, on 11/11/11. Pretty cool. Of course my daughter also knows kids that were in 10 on October 10th and 9 on September 9th, and almost all the way down the line. I guess that’s one of the hidden perks of being a Millenial Baby.
Of course all that fun ends next December on 12/12/12, which will not coincidentally also soon after auger in her first year of teenagerdom. Teenagerhood? Teenagedness?
In any case, I’d better gird my loins.
But let’s not lose sight of the importance of the Day itself, written into history in 1918 as the end marker of “The War to End all Wars” — WWI. Unfortunately that was a bit of hubris, wasn’t it? The very Treaty (Versailles) signed that day in fact set the groundwork for an even worse World War only a little more than 20 years later.
The study of history shows that human nature is cyclic, and that we tend to make the same mistakes, no matter our careful plans to eradicate them by mutually agreed consensus. There will always be those who seek to take advantage of said consensus, just as there will always be those claiming we’ve finally arrived at the “End of History.”
To expect otherwise in future is a fool’s game. We can only do the best we can, and improve ourselves individually and as a society by gentle consensus, and with a constant and humble awareness that we will backslide. That knowledge, that humility, will allow us to rebound all the quicker.
I would humbly suggest we hold then to our accumulated traditions, our respect for others, their person and property and our fealty to consensual agreement over forced autarchy. For these are the traditions that set the Free People of the West apart from civilizations of the past, and from the failed societies of the present.
But let’s also be most cognizant that these traditions are under fire from many quarters, and that in many cases, all that stands between them and the less enlightened cohorts of the past are the blood of those willing to defend their preservation.
So let’s raise a glass to our Veterans, and to those who carry the sword — voluntarily — into battle for our civilization today. And pass that good word to a soldier in uniform not just this day, but from this day foreward.
As I expected (was hoping?), the dollar gnomes have collapsed the dollar anew. This has led to some very nice activity in the silver and gold pits, with the kind of flagging (bullish) that makes my heart grow fond.
I will likely add here and there to my hordes today, and will let you know if I do. Right now I am enjoying strong moves in SLW, EGO, IAG and my various ETF plays, including the doubles AGQ and NUGT.
As always, if you want to toe-dip, start with the basics — GDX, GDXJ and SIL. Highest octane is in the crazy silvers, like my favourites AG and EXK. Today and for the next few days, SSRI should also be moving to make up for the plungerooni (overdone) yesterday.
Lastly, don’t forget about the “rare earth” plays like QRM and AVL for added dollar inflation pop.
My best to you all on this day of honour.
Today was kind of interesting, no? False alarm breakouts all over, and almost none of them held…
Save for the PM miners of course. Sort of like a… a… PM Dawn, no? I took my cue off the Baby $HUI earlier today, as it had gracefully touched the bottom of it’s trading channel and then sprung up like a coked out stallion loose in the mare barn. True, it sold off some at the end of the day after that initial hop up.. but I still like the pin action. Note:
Despite the long wick in that last candle, I like how there’s still lots of room to run on the RSI and the other stochs. This puts me in the mind that we are seeing a genuine handle breakout here. On this action, I doubled up on my XRA and BAA positions, as noted in The PPT today, right before lunch. I also added to EXK, AG, GDXJ and SIL. I even bought some more RGLD, just to add to that pile.
Some other nice movers today that I own, but did not add too (much to my chagrin) included AXU, ANV, AUQ, AUY,GSS, NUGT, IAG, NXG, etc. Keep an eye on these for further developments tomorrow.
As I type, the dollar is below $77, Gold is well over $1,810 and silver is over $40, indicating the $HUI is steering us in the right direction. Enjoy tomorrow, as I will be “road-bound” again, and checking in from remote airport locations & scruffy hotel bar rooms.