Mr. Limm Likes Cash!
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We’re getting another mini-rally in the greenback, thanks largely I believe to the perceived death of Obamacare and the attendant printing those increased expenditures would have brought with them.    Of course, there are trillions in deficits rolling down the pike with or without socialized medicine on the table, so I don’t expect this dollar bounce to be particularly long lived.

Let’s have a look at  our dollar proxy [[UUP]] to see what we might expect.   First the daily chart:

As you can see, we gapped up pretty significantly yesterday, but we’ve been turning up for over a week now, stochastically speaking.   I don’t think it’s a major coincidence that the dollar rebound coincided with the increasing possibility of the Dem’s losing their filibuster-proof Senate and the markets perhaps getting the notion that spending might slow.   That said, there’s already many wheels in motion on the spending front, and I think perhaps this move reflects more “hope” than reality for the currency markets.  

As you can see, on the dailies we’re running into some decent resistance at both the $23.20 mark and then at the 200-day EMA at $23.32.   We’ll have to see if those levels hold, but looking at the weekly chart, you might think they will not.  The coil on the various oscillators seem to indicate we’re not done with this rebound yet:

As you can see, my near term weekly target at the 34-week EMA ($23.21) coincides with my above daily targets.   However, if that level is breached, it looks like the next levels of serious resistance will be $23.75 or so — which is a mile in terms of overall market, and especially commodity reaction.   

So be prepared to gird your loins if the dollar continues to strengthen.   For my part, I will be laying in wait to accumulate back more of the silver and gold names I dis-horded in December.   I added more Silver Wheaton Corp. (USA) [[SLW]] under $16 yesterday, and began buying Fronteer Development Group Inc. (USA) [[FRG]] for the first time at $4.87.    I like how it pulled back to the breakout area from the mid $5.20’s, as I had hoped it would.  

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In the mean time, it’s seems the banks really like this dollar move, as our favourite (sic) bank index (that Jeremy won’t fix the price indicator for) [[BKX]] has been cheering on this dollar move like they use them for inventory or something.

What’s wacky is that President Obama is currently jaw-boning the hell out of the banks with a threatened “extra-tax” to “pay back the American people” (despite the American people being paid back very favorably for TARP by all but the worst Congressional satraps at Fannie, Freddie, GM and Chrysler who, needless to even mention, are not included in aforesaid punitive tax).  

Could it be that everyone is whispering to one another and saying “he’s bullshitting us?”   Maybe.   Could it also be that this just today new threat from Goldman’s Favourite President about “limiting the size of banks” is going to end up yet another barrier to entry which will — soo-prize! soo-prize! — end up benefitting the largest banks by limiting competition?

Would Congress really do something like that??  (Stifling laughter)

Well, whatever the cause, the banks are off to the races like a drunken Irishman on Derby Day (or “like Jake”) in the last two days, even in the teeth of an overall market downdraft.    Check out the Index That Shall not Be Displayed — $BKX :

“What the horse,” no?

And now look at a current Jake Favourite, as I’ve been mentioning on The PPT for these last few days, Southern Powerhouse BB&T Corporation [[BBT]] :

Looking good, no Cisco?  

Here’s the weekly for the longer term play:

You can see my ultimate target on this one is $38, and if things continue as they have been, I don’t think that will be a long wait.   For the gamblers out there’s Pacific Capital Bancorp [[PCBC]] which Ragin’ Hat Tipped me towards a couple of weeks back at $1.08.   It’s been berry berry good to me.  I also like Huntington Bancshares Incorporated [[HBAN]] for the potential buy-out and PNC Financial Services [[PNC]] and UBS AG (USA) [[UBS]] for “best survivors” status.     For large banks, I continue to think JPMorgan Chase & Co. [[JPM]] will end up on top.    

Best to you all.

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What the Frig?
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I have to thank my Massachoo friend, E8, a.k.a. “Teahouse on the Tracks” for giving me this easy throwaway header.

But let that not distract from the niceness of this junior miner in the full Lawn Guylandesque sense of the term. Fronteer Development Group Inc. (USA) [[FRG]] is no doubt “BTFO” as we say around here, and the daily tells us so:

With that kind of lift off on volume like we had Friday, you can expect further action as follow through, but if I’m youse (sic), I’m gonna wait and let it flag some. Why? Well, the weekly should be an indication:

As you can see, there’s a secondary consolidation zone that we’ve just broken into. I think that means we’ll see a little bit more consoliadation here, and maybe even a pullback to the original breakout line at $4.85 or so.  

When we’ve dealt with this little dollar eruption in the next couple of days to a week, I think FRG will resume it’s heading back over the $5.60 mark, where it should have clear sailing well into the $8-9.00 range.

Keep in mind we should have some pullback on our favorite miners here, so keep your eyes open.  I will be looking to grab more Silver Wheaton Corp. (USA) [[SLW]] , [[EXK]] , Allied Nevada Gold Corp. [[ANV]] and Eldorado Gold Corporation (USA) [[EGO]] in a rigidly opportunistic fashion, like Frank Sinatra on Rookie Cocktail Waitress Night at the Sands.

[[PAL]] and [[PTM]] remain strong relative to gold and even silver.   These laggards need to catch up.

Keep in mind also that the 13-week EMA’s for Cree, Inc. [[CREE]] and Veeco Instruments Inc. [[VECO]] of which I spoke a few posts back, should be looming into view this week as well.   This is not an opportunity to ignore.

May all your bastards be glorious, and I hope to speak to you tomorrow sometime.

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Did you know Maxwell’s Hammer of Beatle’s fame was an autopsy tool?

Do you remember what I said the other day about my second favourite (sic) dollar hedging silver pick [[EXK]] ?

I’ll be getting more tomorrow —

 

You see it using that 20-day EMA as a trampoline?

Want another?   Remember Silver Wheaton Corp. (USA) [[SLW]] ?

Why muck about with ball-peen hammers to the head, when there’s pretty silver that can do the job that much more stylishly?   You know this is my Stock of the Year pick at RC’s blog as well, no?  

 Nine year secular bull market, breaking out again.   Can you imagine the odds?

 

Also — Keep an eye on [[TBT]] here as well, folks.   It tested the breakout again today, and is looking good again.

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I’ve been abominably busy and there’s just no accounting for it. You’ll just have to put up with my ghostlike presence as I H.A.L.O.-parachute in with various recs from the troposphere.

The good news is, nothing is going on that hasn’t been anticipated for some time. You might be at the opera, you might be at the symphony, you might simply be out at the soda jerk’s enjoying a nice sasparilla with your best girl, Friday, but you haven’t missed a thing.

You’re right in the middle of it, so it’s time to lay down your knitting needles and Persian cat, and lookee here at these six charts of wonder. They are all in the weekly format, so you know there’s “no bullshit” gumming anything up, making you lose your nerve.

If I’m you, I’m relaxing right here. I’m not you, and I can’t relax due to my manic tendencies, but don’t feel bad, it keeps my weight down in the winter. I’m relaxing and I’m letting the market come to me. If I’m you, I mean. “Come to me” is code for “wait for the 13-week EMA touch” — especially on these balenes of beauty.

First two LED stocks. “WTF!?” you say to yourself.

WTF, indeud. Come on ovah heah and check out “Elvis” the King — Cree, Inc. [[CREE]] first. Behold!

And his LED brother, from Ghostbusters II — Veeco Instruments Inc. [[VECO]]– almost as purty !

Now those are some pretty formations, no?  Can you say “simpleton easy?”   Good, good.   Now look at my other friends.  My favorite goldie Allied Nevada Gold Corp. [[ANV]] is first:

And who could forget my enormous EGO—  Eldorado Gold Corporation (USA) [[EGO]] ?   Another weekly wonder:

One more golden gate to my heart, is the appropriately named IAMGOLD Corporation (USA) [[IAG]] :

And last but not least, the “Stock of the Year” –Silver Wheaton Corp. (USA) [[SLW]] —  a silver stallion that will outlast them all:

Repair more to your weekly charts for comfort, my droogs.   Remember “13-week EMA” on these high fliers, and let not the shadow of Zul darken your hearts.

Quanza.

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Exchanging the Secret Handshake
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The guy on the right in the picture above is counting on the stupidity of his majority peasant populace to pull off one of the grandest day-time thefts in recent years — the 50% devaluation of his country’s currency by fiat Executive declaration. Like the crazed-with-power dictator in Woody Allen’s classic comedy Bananas who declared “All children… under the age of 16 years old.. are now…. 16 years old,” El Pizza Face above is “declaring” that every unit of currency (the “bolivar“) is worth one half of what it was worth yesterday… just “because.”   

What’s even funnier is he’s now saying that retailers cannot raise prices in response to this devaluation, upon pain of seizure.  How long do you think retail businesses can stay open charging 50% under cost of goods?   One wonders also how long even the economically illiterate majority of Venezuela will stand for such blatent skulduggery?   I’m guessing for about as long as the food stores hold out.

Meanwhile back here in this country, we’ve got that pesky Constitution getting in the way of any similar grand plans to immediately double the money supply.   But our leaders want to get in on the free-gov’t-money-for-votes-racket too,  so they’ve got to come up with more creative methodologies.  

Luckily, they’ve got a compliant Federal Reserve whose number one priority is saving themselves and the badly damaged fractional reserve banking system.   That means the Fed’s alleged “guiding missions” of maintaining low inflation and a high rate of employment take a back seat to the Darwinian imperative — “survival at all costs.”   This is good news for the dear leaders in Congress and the White House.

What’s more, our leaders have got the rest of the world using our currency as reserves.   That means, for this brief shining moment in history, our leaders can do what Hugo Chavez only wishes he could do — print fresh new bails of cash via deficit financing with little to no apparent consequence to our national economic status.

For now. 

But Mother Economics is even more of a caustic wit than Mother Nature, and much like these soi-disant world governors who are being served flaming slices of “Humble Baked Alaska” with these record-breaking cold temperatures, so too will our Congressional and Fed Capos reap multiple facial hatchetings to their long beards for this extended abuse of global trust.   The dollar may not halve in value over night like the Meatball’s Bolivar did, but it’s breaking down all the same.  

Today’s action has us back in the congestion zone again, which is a sticky swamp as of late.   This means good news for commodities and other real things as the clarion bell of inflation is being rung once again.   Answering the call is your one and only “Stock of the Year” pick Silver Wheaton Corp. (USA) [[SLW]] , now clearly BTFO’ing to new 52-week highs.   I like it on a pullback, as it has a reputation for filling gaps.

While [[GLD]] is moving up in a stately patrician manner, [[SLV]] and its turbocharged brother  [[AGQ]] are playing catch-up, and will likely out-perform in the near term.   Same holds true for the other precious non-gold varietals like [[PTM]] and the two platinum-palladium miners [[PAL]] (which is a rocket ship headed to the sun, Icharus-style) and Stillwater Mining Company [[SWC]] .

Don’t forget all the junior burritos I’ve given you in the past.   Allied Nevada Gold Corp. [[ANV]] , Eldorado Gold Corporation (USA) [[EGO]] and IAMGOLD Corporation (USA) [[IAG]] head the list, but the “Nth Factor” — NovaGold Resources Inc. (USA) [[NG]] , New Gold Inc. (USA) [[NGD]] and Northgate Minerals Corporation (USA) [[NXG]] are roaring too, along with Ivanhoe Mines Ltd. (USA) [[IVN]] , Rubicon Minerals Corp. (USA) [[RBY]] , Exeter Resource Corp. [[XRA]] and many others.   

If I had to pick another “launch to the sun” like Silver Wheaton Corp. (USA) [[SLW]] I think it would probably be [[EXK]] .   It reminds me of SLW in the old days.     Hold on to your capital people, they will try to appropriate it in multiple fashions going forward.  

Best to you all.

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It’s quite likely I’ll start to unwind my hedges tomorrow… especially those covering my PM and commodity positions.

It’s hard to discard the evidence that’s popping up all around me.   Yes, we’re overbought like a mother, and yes, we’ve not had a cycle turn in 44 days.   However, I’m seeing precipitous increases in my hard asset positions that point to increased currency devaluation insurance being purchased across the board.    The dollar has not yet broken down, but the metals are being bought in big, breakout ways, visible even in my longer term weekly charts.  

Here are three alone that start with “T,”  — and what’s more, none are even precious metal plays.   My Silver Wheaton Corp. (USA) [[SLW]] ‘s and IAMGOLD Corporation (USA) [[IAG]] ‘s are a story unto themselves.    I will likely start rolling back into those tomorrow as well, but for now, let’s look at these steel-related commodities…

First up is the old weasel Titanium Metals Corporation [[TIE]] , which I’ve bot many times in the past, only to be disappointed.   It’s been earning merit badges these last three weeks, however, and looking like it wants to get back in the Troop:

As you can see, this should go to $17.50 relatively quickly (dare I say after a pullback to that consolidation breakout?), and the next major resistance is very close to $30.  

Now consider our Jacksonian non-PM friends.  First, the frisky Thompson Creek Metals Company, Inc. [[TC]] :

The volume from this week just cannot be ignored (especially given it’s only Wednesday!), and this Jackson looks like it’s only now getting it’s legs for a larger launch, likely inflation fueled.  $16 is an easy target, but long term, she goes to $24, I think.

Last, let’s look at fellow Jacksonian Teck Cominco Limited (USA) [[TCK]] , which seems to be finally breaking out of a minor consolidation after a very quick spurt from the depths of despair back in March ’09.   This stock has come a long way from well below $5, but I think it’s got some to go as well:

As I mentioned, the price of gold and silver and the actions of [[GDX]] and Baby $HUI today also give some assurances with regard to my silver and gold positions.   While I will hope for some more pullback here, I will not expect it, and I will likely start pacing back up to “full position” in those names again as we go forward this month.

Best to you all.

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