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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That’s “Loin” not “Lion!” 

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We’re a little bit over a year into my tenure here, and we’ve probably had three or four “one of those days” days since I started. 

Today was one for sure.

This is life in the PM bull, friends, and we should be used to it by now.   I expect we are not fully shaken out, although that over 10% move in the $XAU index today might have scared some people off for the next decade or so.

That said, opportunities abound.   [[EXK]] was even up by the end of the day, and Silver Wheaton Corp. (USA) [[SLW]] filled two large gaps from the prior month’s work.  In hindsight, I likely should have taken the opportunity last week to sell some calls, as I’ve done in the past, but frankly, I was just too busy.   That’s why I choose to play long term secular bulls like the gold and silver markets, however, and that strategy has served me well.

So buck up Cowboy, and get ready for some more bull-riding, pleasant and not so much.   The good news is those with some dry powder can still grab some great names, perhaps as early as tomorrow morning.   I’ve mentioned Allied Nevada Gold Corp. [[ANV]] before (I also like Eldorado Gold Corporation (USA) [[EGO]] here), and you will remember this weekly chart from a couple of days back:

Note we’ve touched that trend line today, as I’d predicted.   We may do so again tomorrow, but that mid $17’s area remains a primo area to pick up some nuggets.  

On the silver side, besides the two I’d mentioned above, I think [[PAAS]] is still one of your better bets, and riding that weekly trendline like a refusnik on the potato line.  

Feel free to stop by here, or The PPT to discuss stocks and trends.  I’m here for you during the roller coaster times.

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Jake Pours A Special Treat for the Bears

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You can tell by the twinkle in his eye that old Pat Boone’s having a special day.      And so are tthe loyal Jacksonian JakeGint Brigade.

Gold is now in new all-time high territory @ $1041.70 an ounce, having smashed the former $1,033 ceiling with gusto this morning, as our friend, Mr. Dollar plummets once again to it’s flash-paper grave.  

In the meantime, silver is the purchase of the century as it still lags gold in targetting and achieving it’s old $20+ highs.    Silver is still one-sixtieth the price of gold as well, compared to more historic ratioss of 40:1.

 I’m still targetting a $21.95 price for [[UUP]] , and we may break to new lows from there, thanks to swarthy men wearing bedsheets and mis-treating their camels half-way across the world.

How dare they object to our running off sheets and sheets of green paper with Ben Franklin’s visage on it and exchanging said specie for their greasy petrol?   Don’t they know what attractive wall covering that shade of grey-green can provide?

Not to mention window-treatments.

Not to get all “stuffed-in-the-gut” about how all my dollar defense dragons are tearing ass on this market and making investments in TV-tubes and natty gas service companies look like so much Baltic Avenue rowhouse property (we have Mr. Boone for that purpose  anyway), I’d like to point out some exaggerated gorillas whose armpits you may wish to shave at some point today…

(That means “take some fiat off the table” for the metaphorically challenged)

Silver Wheaton Corp. (USA) [[SLW]] will likely come back to it’s breakout at $13.35 or so.

Hecla Mining Company [[HL]] is a crazy stock and will likely meet stiff resistance at $5.00.

Wait for a break of $21.96  to get back on [[CDE]] , otherwise, it should fill that gap again at $20.41

Silver Standard Resources Inc. (USA) [[SSRI]] has an optimal entry at $21.75, but otherwise it should get held up at $23.25 or so for the near term.

[[PAAS]] is “BTFO,” but will likely return to it’s old high of $24.81 before heading to new pastures.

Golden Star Resources Ltd. (USA) [[GSS]] will be BTFO at $3.71, but is a buy on a pullback to $3.38.

That’s enough free fritatas for now, pikers.   Sign up for The PPT to get the full-fire hose effect of instant portfolio nutrition.

Off to commiserate with mountain dwarves and other horders of glittering treasure piles.

Slante.

 

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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)
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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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