[youtube:http://www.youtube.com/watch?v=WM1RChZk1EU 450 300]

The Greatest Hip Hop Video Of All Time… Do you Dispute it?

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And so appropos, no?   Can you dispute I got a million ways to get it?

Who holds the Jacksons, still?  Which of you?  

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I took some silver off today, specifically SLW, PAAS and EXK.  My positions in these were fecund and preposterous.  They were an insult to God, they’d grown to such metastisitic proportions.

So I reset on some.   But I keep all of my SVM, MVG, and SSRI, with an eye on adding again to all of them.

And even more so with the gold juniors.   Some have asked me, “what of IAG?” 

More of it here, good sir?

Yes, good sir, yes, yes.    And NG and IVN at any scant opportunity.   But above all, constantly feed RGLD. 

Outside these of the Precious, only MON, UPS and ANDE are attractive to me right now.  

Go on now, I’ve given you enough! 

Go!

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

(The 1970’s are back in California, at least)

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It ain’t easy keeping up with my family for a long weekend mini-vacation let me tell you.   It seems we did it all this time around– the full blown resort/ winery grand loop/ top-eating halls/ Napa-Sonoma scenario, and even added in the occasional valley balloon flight and a “little” family party at a relative’s Fairfax home in the hills.   I think we also greatly depleted the stock of the district, so it’s a good thing that harvest is a little late this year.

Because let me tell you — they’re going to need more grape jooce (sic) when we finally vacate the air space.

Going into this week I am going to exercise some caution.  I still have a little bit of my ANV and SLW hedges left and I may add to them perhaps get some GDX and even GDXJ covered calls.  Both gold and silver are magnificently stretched here and I’m looking for a respite at least.    I woulodn’t be surprised if that respite went hand in hand with a similar pullback on the SPX.

To that end, I may trim my sails on some of my stock positions also, including TCK, TC and ANDE — the non-precious Jacksonians.  I will keep all of my MON as that seems to have a counter-cyclical trend to its trading recently.

Besides, it’s a long term hold play, and I’d be comfortable adding lower, so why sell some now?

I am bone weary and getting up early tomorrow to take on the San Fran Airport.   I will try to check in via Crackberry, but until then bon chance!

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Don’t dare ask me about the dollar, small pleb!
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Quickly, quickly now, as the spice melange takes maximum hold…  I shall reveal the revelations of the spice dreams as controlled by special Bene Gesserit training taught exclusively to me by Madonna.

First, I reiterate, with cement-like, no…concrete-like certainty, the devolution of this market will be marked by the application of much spice melange to my upper respiratory tract, especially my nostrils, where it is most tasty and vision-producing.

I envision our dollar to be entering some significant retrace territory on the weekly chart here, and soon, trouble:

As you can see, we are not yet oversold on the weekly (we should not be as we bottomed a mere two weeks back), but we are approaching some significant Fibonacci retrace levels at 61.8% of the latest large drop from the March to December ’09 period.

Not coincidentally, that huge dollar drop brought us our relief market.   Now I think she gets ready to drop once again, as the dollar “recovery” continues to weaken at the firm but effeminate hands of Ben Bernanke.

The dollar daily is even more immediate:

As you will note, on the daily, the Gom Jabbar  lies even closer to the neck of the weakling dollar, as it is overbought already after a mere 11 days since it’s last bottom-scrape.    A mere word will bring it to it’s knees, and I think that word is “Fibonacci.”

Or it could be “black candle,” even though that’s two words, technically.

No matter, gold held fast today, and as I commented to M. Le Docteur earlier today, whenever gold and the dollar rise simultaneously, it usually means one of them is about to break.   Today, the dollar blinked first but recovered.   The rest of the week should tell our tale.

In the meantime, gold and silver miners may continue to consolidate here.  While you are eating that sandwich and waiting for them to break out once again, take a gander at ANDE, the old Jacksonian agricultural stalwart.   I expect MON to recover here with the rest of the ags as well.

May the great red beard and moustaches of Frank Herbert bless you all, and good night!

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“Heart Attack on a Plate” — Nom! Nom! Nom! Nom!

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Seared, medium rare dry-aged New York Strip (12 oz) is very good for a special occasion.  As are gargantuan prawns with hot hot blazing hot chunky horseradish cocktail sauce.  As are “tomatahs and motzz” (sic) w. heirlooms and hand made mozzarella. 

And let’s not forget a flagon of ruby red claret to wash it all down.

But only every once in a while, or that stuff’ll kill ya.

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Speaking of “you only live once,” (I know you just said it), I think that’s what we’re looking at here in this late summer coiled up rocket rally.  It may flare out and die, but I think it’s just as likely to continue to unfold into the early autumn (!!), and here’s why…

We’ve talked sentiment, and it was hang over the banister and puke ugly here about two weeks back.  As ugly as it’s been since before the March ’09 phoenix run.    Sentiment is still bearish — note how many skeptics there are, even among the storied stock pundocracy? 

We’ve talked dollar, and it continues to melt here.  Down another 22 cent (sic) today, to $83.43, I don’t think we see relief til at least $82– the 200 day EMA.

Now let’s talk our market leading Trannies ($TRAN).   They continue their stealthy moves after the non-confirmation of the February lows a few weeks back.   Now the weekly has them taking out a significant fib line — 61.8% — after bouncing at the 50% retrace.

If we hold above that fib line this week, we could be heading all the way back up to the top again on this coil explosion.

And let’s not forget the Grandaddy (Mammy?) Trannie — UPS, the Men in Brown.  This is another long term hold of mine, and it’s like XOM or CHD — always reliable.  Check how it’s testing the handle formation here, and keep an eye on where it goes.   Given the similar stochastic formulation to the $TRAN above, I see a similar breakout coming:

In other news, the PM’s just stood there, which is fine, and MON is busting the heck out, up another 4.5% to $54.61.  I may have to look at this one again for you, with gladness in my heart for those desperation buys in the low fitties and high fowties (sic).

I’ll be busy all day tomorrow, but will try to check in.  Best to you.

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I got a question in my comments section yesterday about two smaller Canadian juniors — RBY and BAA  — that we’ve discussed in the past, and which look to be ready to turn back north, or disappear down the drain for the duration.  

Note, even in this wildly successful bull market for gold and silver, there are still doggy outliers with such grandly incompetent management (or who have the misfortune to operate under the purview of such confiscatory national governments) that they have not benefitted in the “rising tide.”   

I often cite the South African DROOY, as an example of said phenomena, but even poorly managed HL and CDE can be placed in that category.   The difference between DROOY and Idaho-based CDE and HL — where I would not invest in the former, but have done so in the two latter — is in nationalization risk.   In this rising tide, CDE and HL, though managed ham-fistedly, might actually become buyout candidates thanks to their assets in the ground.  

DROOY on the other hand, increasingly becomes a nationalization candidate as it’s home nation (South Africa) slides further into the traditional socialist morass under the leadership of the ANC.  Happy World Cup, by the bye, fellahs.

Back to our two small Canadians, who are, again, very low nationalization risks.  With Canada’s strong support for it’s PM industry, they maybe even lower risk than the gold miners of the United States (lol!).   I will show the weeklies to illustrate the long term trends, as usual.    BAA, which just a month back raised over $130mm at $2.05 Canadian (or $1.98 U.S.)  a share, is showing a possible bottoming here, which is not atypical a month after a major dilutive action.

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One quick aside on the major risk of juniors in a gold BULL market (the major risk in a non-bull being that they are actually held accountable for their crappy earnings, lol!).  In a non-nationalizing State environment, the greatest risk to junior investors is in dilution.   Many many many managers of these juniors (rightfully) see an increasing stock price (thanks to speculation) being an opportunity to raise cheap capital.   And even if the capital is not so cheap, the market will assign a discount to it upon a dilutive offering anyway.   Hence, in the case of BAA, we had a large new issue of equity sold at $1.98, but saw the stock pull back (this week!) all the way to $1.61 — a 19% discount from the original offering price.  That’s HUGE in a bull market for gold.

The good news is that BAA is now going to be a much smaller dilution risk going forward, and in fact, one might even say we can take that risk off the table for up to 24 months… which may mean all the way to the end of this bull.  With such a capitalization under their belts, BAA also gains more leverage in an M&A scenario.  Because of the fresh capital, they will not be forced to accept a low bid to monetize their assets, as this offering gives them additional dry powder to do so internally (for the time being).   

Long story short, if you owned BAA prior to this dilutive event, you  are pissed about the set-back (although, if you are like me, you are long used to it in these juniors).   This is one reason to greatly diversify your junior picks, either through a large group of names (as I’ve done) or via ETF’s like GDXJ and SIL (less bang for the buck, but a greater diversifier for those w. smaller accounts).

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The good news is that now that BAA has taken the dilution risk off the table, this may be a good time to begin accumulating at these prices… Note our weekly chart:

We could see this thing drift down another 10 cents or so (which is a lot, admittedly) if there is a consolidation of the latest gold pop, but I think the I-bankers at CIBC World Markets (the underwriter of the shares at $1.98) would be catching a lot of grief were it to descend much lower than the $1.55 range (a 22% discount and home to much chart support).    I may add to my holdings come Monday.

Note:   a large part of BAA’s holdings are in The Democratic (hah!) Republic (ha-ha) of Congo, so there is nationalization risk, but less so, thanks to BAA‘s being a Canadian-resident company.  Ironically, foreign companies– especially those based from Western NATO allied countries — are more immune to nationalization in rogue states, whose loosely held governments are dependent on their income to survive.  In fact, because SA is not a rogue state (i.e., essentially government-less), it actually poses a greater confiscatory risk, thanks to the Dunning Kruger effect posed by imagined competancy  (see Venezuela as a great example, or even the Obama and Bush Administrations), than the tenuous ex-Zaire of DRC.

Also, please keep in mind that while BAA may not be subject to nationalization risk, there’s still higher political risk due to the fighting going on within it’s host state and on it’s border states in the Congo.

Rubicon Minerals’ (RBY‘s) position is a lot more secure, with most of their assets residing in Canada and the U.S.  That said, they too have had a sharp pullback from highs (see chart below).   They had their big dilutive offering (they bought back debt too) in 2009, with over $210 mm in “bought deal financings,” which are essentially privately placed public equity (like PIPES here in the US).

I also like the chart, which seem to indicate a cup and handle, with a subsequent breakout.   Now it seems we are consolidating that breakout and it may be time to “nibble” once again.   I may also look to RBY on Monday.

 

Note, I will be increasingly selling down my non-gold & silver  movers, save for a couple of small positions in UPS and MON and perhaps CREE.   I think we are getting to a point where a concentration in PM”s may be again warranted.  This will be especially true if the dollar starts to break down here, as I think it may.

Best to you all, and I will try to get a piece in on the TRANnies before weekend is out.

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What do I always say to you about dire times?  You want to buy gold, silver… and pasta of course.   What are you going to do, eat heavy metals that are far more useful worked into cheery adornments and dental hardware? 

No, of course not.  

In times of rising food prices, you want to eat staples that will fill your belly while providing you the carbo-rush you need to get you through those crucial trading hours between early morning sugar frosted bombs (and coffee) and late afternoon Butterfingers bar from the vending machine (and cawfee).

You need pasta to fill your demanding gut.   With some red gravy, or maybe some butter, or a light slathering of pesto.   You want the hot hot penne, the tri-color wagon wheels, the masticola.   So, it seems,  do many others, if judging by today’s nice action amidst Col. Kurtz’s “horror the horror” market show (brought to you be Procter & Gamble) will attest.

Check what this li’l beauty did today among the carnage that is all things not precious metals:

Now granted, this sucker had good numbers today… with expanding gross and net operating margins.   That’s all good, but you know that the real reason for [[AIPC]] ‘s increasingly good numbers is “the new frugality.” 

Embrace it, pop it in your mouth, swish it aroun your tongue.   It’s the latest thing.

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Not the latest thing is the relative strength of gold and to some extent, silver, in this downdraft.   Yes, even with [[UUP]] threatening $25 again, and the dollar index (DXY) being over $85 this afternoon, it seems the PM’s are holding their own.   This bodes very well for them on any reduction of the dollar’s recent climb.

That said, my perfomers today were [[GLD]] and [[SLV]] , Allied Nevada Gold Corp. [[ANV]] and Eldorado Gold Corporation (USA) [[EGO]] , and [[EXK]] and [[GDX]] , IAMGOLD Corporation (USA) [[IAG]] and Royal Gold, Inc. [[RGLD]] , my favourite here.

I like all the PM’s until further notice… they’ve decoupled from the dollar, and that can only be a good thing.

I also got hammered today in Monsanto Company [[MON]] and [[TBT]] , as was so kindly pointed out by my own personal troll.   Amazingly, I bot some more MON just below $60, though not far enough below.  I continue to like both names.

I am near exhaustion level, ladies and germs, business is that crazy.   I’m sorry I didn’t get to post a new one to you intraday today, but I will try to be there, at least through the comment section, in doozy dozy days like today.  Be safe, as Fly says, but look for the rebound here tomorrow.

My best to you all.

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