‘Twas a rough day in the trenches for most of the Jacksonian Core,  but then we turned lemons into lemonade by using the retrenchment here to pick up some final positions in the silver miners, including AGQ (Double Silver ETF), PAAS,  and SSRI.   Those buys were featured in my previous post,  if you want entry points.

   I did not add to my “favourite” (sic) silver miner – SLW, but only because I already have what I consider to be a “full position” in SLW, at least for now.    I may augment that position from time to time with options purchases (or sales in hedging situations), but I will likely not add any more equity in that name.

I also eschewed adding more EXK  (-5.89%) today, due mostly to it’s volatility and low float (less than 150 k shares traded a day).  This is a stock you want to accumulate when it’s asleep — its just too damn hard to pick up when it’s moving hard one way or another.    I reserve the right to add to EXK in more calm seas.

I also added some non-Jacksonian Core gold positions, some old, and some new, whose entries are also found in the previous post.    You’ll recall I purchased a beginning position in NGD just before yesterday’s close.    That stock actually held up well, so I decided to also add its “brothers” NG and NXG.  All of these have been showing favourable (sic) patterns in the last few weeks, and their purchase is part of a diversification strategy in the smaller miners.   It’s best to take this shotgun approach with these smaller guys, as you usually cannot pick up their exposure via the GDX ETF, which only purchases the larger cap issues  but you want to have a position in these flyers for when they start to run.   Some of them will double and triple, but in these cycle peaks, you never know which.     

In that regard, I also added to my position in ANV at the end of the day.    Like with SLW and EGO, I now have a full position in this name, and expect to see it run to at least the 61.8% fib retrace at $6.72 before breaking out to new 52-week highs. 

I also took this opportunity to hedge out my largest (and non-Jacksonian) position in UPS, and to begin a “foot in” purchase in SRS  as well. 

Non-PM Jacksonians did well and not so well today, MON was up a little less than 1% while its sister Ag play ANDE was off  4.67%.    If ANDE cannot hold above the $19.40 uptrend line here, it’s likely to fill that gap over a dollar below it.   As well, Jacksonian Core Coal play NRP (-4.89%) has been performing miserably here, even as coal operators have been consolidating.    This could be due to a (temporary) interest rate response, but I won’t recommend adding to this one until it’s back over the 38.6% retrace at $22.70.     Last, refiner TSO was largely flat–  off less than half a percent.

Without further ado, here’s the 14-Member Jacksonian Core’s performance (arranged alphabetically for your reading pleasure) for today:

ANDE — $19.79  (-4.67%)

GDX — $37.94 (-2.61%)

GLD — $91.09 (+0.42)

IAG — $9.87 (-2.66%) 

PAAS — $19.26 (-3.02%)

RGLD — $40.60 (-2.98%)

SLV — $13.81 (-1.49%)

SLW — $8.85 (-5.04%)

SSRI — $19.93 (-5.18%)

TBT — $49.29 (-2.08%)

TC — $7.68 (-4.00%)

TSO — $16.09 (-0.43%)

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A bloody good evening to you all!

(Warning! Extremely stupid video to follow, usher the children from the room)

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

AGQ (+3.75%)

EGO (+2.28)

EXK (+8.24)

GDX (+4.42)

IAG (+4.11)

PAAS (+1.28)

RGLD (+6.98)

SLV (+2.04)

SLW (+5.78)

SSRI (+7.41)

And newcomer (bot 10k @ $2.19 late day) — NGD  (+13.54) 

Non precious Jacksonians MON (+4.82) and TC (+3.36) did well today too.   

Ever onward — this PM revolution is not done by a long shot.

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UPDATE:  Looks like we will have a chance, however brief, to get into some of these silver (and gold) plays this morning if we have been remiss.  With my usual caution, I will wait until 10:00 am or so to see what the market looks like.   I will be looking specifically at the smaller caps, like EXK, ANV, EGO, NG, NXG, and even CDE and HL.

Money is power, and in that government which pays all the public officers of the states will all political power be substantially concentrated.    — Andrew Jackson

What a great day for the Jacksonian Portfolio, no?   I felt like the Great Man re-born, breaching the lines of villainous (shorting) Redcoats with my trusty white charger, cutlass slashing down upon their ridiculous feathered bonnets, calling for my Horsed Kentucky Rifleman Sharpshooters to release another volley of musket upon their pasty-pale visages.  Triumph!

And what’s more it’s a triumph over fear, as well, for with our solid Jacksonian Core Portfolio, we know that these wins are not only for today, but will be substantiated again tomorrow.  For when the fickle winds of Washington change course again, and blow against our frail banking system’s walking corpse, rather than hold it aloft as it has, we will be prepared.    Hard money and assets will be our stores of value, no matter what our increasingly Zimbabwean central government  shall make of our paper printed with the General’s startled masque.

Today’s “core” wins — “early” wins, I call them — include PAAS (+6.82%), GDX (+5.97%), SLW (+ 3.03%) RGLD (+3.93%%), NRP (+3.68%), SLV (+2.89%) GLD (+1.46%)  and newcomer to the Core Portfolio: SSRI (+6.62).  

Of the Core that was involved in earnings tonight, we have TSO giving back strong wins from today (currently – 1.52% @ $17.53 in AH) and Mr. Anderson — ANDE — up large after hours (currently +13.95% @ $20.10 in AH).  You will recall that I sold the $17.50 June calls on TSO two days back, as I felt it was getting overextended.   I will likely close that position tomorrow, at profit.    I still retain my unhedged position in ANDE.     Other Core holdings that were down slightly today include MON (-0.88%) which needed a breather, and TC (-0.91%), whose 7 cent pullback today was also not unexpected after many days of gains.

Other non-core silver and gold plays I am currently invested in include EGO (+3.69), ANV (+3.82%),  and EXK (+4.85%).    Last, recent recommendation ATHR (-1.16%) was also off a bit.    On the oil front, I bailed on all but a stub of my triple earl ERX (+10.71%) at just under $34.00, as that was where a significant fibonacci line lay, and I’ve learned to respect the fibs on these fast moving triple ETF’s.  

 I am still bullish on our friend Earl, however, as I have been since Fly cursed his name.   My two “core holdings”  — which may soon be nominated to the Jacksonian Core — are PBR (+2.93%)  and OXY (6.66%) , the best of two nations, in my humblest opinions.

I must admit to revelling in some of Fly, RC and CA’s crazy picks today (among them SONS, and FLOW), and I even jumped into one of my own (ABK)  — it is fun to make hay while the SONS is shining, after all.   But make no mistake, these discretionary picks are a tiny portion of my portfolio.   For like the leaves of summer, these high flyers will soon fade, as will our newly reinvigorated “saved” banks.   We must always be girded with our Jacksonian Core to withstand the coming tsunami, and we will continue to build on that foundation as we jog onward.   My best to you all, and keep building! 

Important: Hat tip and my thanks to Trader Caddy and to Chanci for the suggestions on SSRI and EXK,  respectively.  

Aside: If I could tell you to get into one sector in the coming weeks, my friends, silver would lessen my worries for you and yours.

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UPDATE: I decided it would be almost hypocritical of me to urge silver on my blogreaders w/out taking at least a small position in AGQ (Proshares Double Silver) .

Or that could just be me rationalizing my inner Yukon Cornelius.  

You make the call.     That said, I’m picking up some AGQ here @ $42.87.

UPDATE:  Picked up a little more at $ 43.55  

Caveat:  VERY VERY VOLATILE!  If you buy any of this crazy stuff, there’s a 73% probability you will be drafted to become intergalactic Herald to a very large planet eating sub-god, with little sense of humor, and you may lose your pension.

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Very busy today, but I wanted to let you know what I was doing on the stock front, just in case.    Jacksonian Core Holding favorite TBT is butting against an intermediate term significant fibonacci line (61.8%) at right about $50.35, so I am trying to sell some calls against that position.   I like to go “next month out” on those, because it gives me the benefit of some time decay without being so far out that a nice move down doesn’t demolish the actual price like I would like.   I chose the June $51’s, which I got some sold at $2.05, and am looking at the rest at about $1.90-ish.  

 If you are not familiar with options, I’d recommend a number of these, but tops on the list would be McMillan’s book, and then John Murphy’s.   Murphy covers other things besides options as well, and he’s a decent writer.

Remember that if you are a true options rookie, you should be sure to get the proper authorizations from your broker before attempting to trade.   Don’t worry, there’s no IQ test, and I’m thankful for that.   

 All that said, covered calls —  the name of the above described strategy of selling calls against a position you already own — are the least risky of options strategies, as you already own the stock to “give back” should the call writing go against you.    For myself, whenever I write a covered call, I must be sure that I am willing to sell that stock at “price X” — which is the strike price plus any premium I received for selling the call.    

So you see a covered call’s upside is income (taxable at regular income rates, unless you sell LEAPs  and hold them more than a year), and their only downside is a sale at less than your optimal price at the point of expiration.    Since you are selling your stock at a price higher than it is today, your “loss” is only an opportunity cost, though you might find it just as painful as taking a loss on a poor stock.  

You can also sell put options if you are looking to purchase a stock but you believe the price is likely to go up.    If you sell at a good enough premium, you may end up purchasing the stock at a lower price than the strike you sold the put at.   Take the example of the June MON 90 puts, currently being bid at $5.20.      If you have sufficient margin to buy 1000 shares of Monsanto, you may want to sell those 10 puts today.    You will collect $5200, less commissions today.   Throw that in your bank account.   If MON continues to rise, and is over $90 by June expiration, you keep the money.   

However, if  MON is between $84.80 and $90 —  you have a nice choice in front of you.   You can purchase the MON shares at a discount — because you can now put your $5200 premium to work in lowering your total 1000 share buy price, or you can simply buy the put back prior to exercise, netting the difference in your premium (plus a bit of interest on the carry).    Not too bad, no?    Of course, you start running into losses below $84.80, but if you were planning on buying MON anyway, you’ve got $5200 as your down payment.

Again, be sure to read up about options before jumping into this pool, but the above are reasonable ways to use options to your long term advantage, without taking a ridiculous amount of risk.   Be sure to consult with your financial advisor before taking that first decision, though.

Updates:  I added some ANV (PPT: Sell) today on this pullback, and am looking hard at EXK (PPT: Buy)  (thanks Chanci) and some SSRI (PPT: Buy) (thanks, Mr. Sachs) as well.    I am almost embarrassed to add that I jumped on some ABK  (PPT: Sell! Sell! You fool, seeelllllll!) in the low 1.30’s too, just for a lark.  

Caveat:   If you follow me into any of the above strategic plays, there’s an off chance your vintage Swatch collection will be confiscated by the Ebay Internal Security Forces and tossed into the smelter.

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Whaddaya know? Ag’s starting to heat up again.    I was going to hold off on announcing Monsanto Co. (NYSE: MON) (PPT: Buy) as a Jacksonian Core Holding stock until we got a little pullback, but as you’ll see from my charts, I want you all to be looking at it this week, in case it wants to do a Clark Kent into Superman “up, up and away” on us.

I’ve got some other ags I’ll be talking about as the week progresses, but this is one of my favorite holdings, and a company that I believe can be called “the GOOG of the agricultural world.”   MON has anywhere from a three to five year lead on many of their genetically modified competitors in a number of different seed products, and in my mind, they are the biggest dog in what I believe will become not only the critical space in modern agriculture, but a highly lucrative one as well.  

 The difference between MON and a lot of these hot ag stocks (including MOS, which I also like) is their high level of quality “intellectual property.”   Not only does MON own a stable of well known brands,  but they also hold  multiple patents on their genetically modified seed technology and are continuously working to create new forms of insect and weed-resistent, as well as drought-resistant crops which will bring yields up and global food prices down.     As global protectionism raises its ugly head again during this recession, you want to own the top dog in the agricultural space, as it’s the also-rans who will suffer most from loss of global market share.

As I mentioned, the charts are looking portentous, with the daily chart showing a breakout of both the short term downtrend line and the consolidation zone formed by the price-volume bars.   We may get a pullback here on lighter volume,  as we are slightly overbought.   But, with the ags running, it’s also as likely that MON could take off this week, which is why I wanted to get this pick out for your consideration:

The weekly show similar portent, with a low volume lift off out of the consolidation zone accompanied by the price crossing the 13 and 34 week moving average in a brisk fashion.   The weekly chart corroborates the daily’s favorable oscillators as well, and shows our significant support and resistance areas for your  target and stop setting.    For my part, I will continue to hold MON in my core portfolio and trade around it using the targets indicated.  

Monsanto remains my second largest portfolio holding.  

Caveat: If you choose to purchase this stock ,  you’re in deep peril of being served Frankenfood Franks n’ Beans for your next Thanksgiving Dinner.   You could also lose your food allowance.   Be vigilant and opportunistic.

UPDATE:  MON and fellow Aggie, ANDE off to the races, along with the sector.    Look for a pullback to $87.80-ish for MON.    Look for ANDE to bull-flag here ($17.65) but don’t wait too long… I think this is the move we were expecting.

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