What the hell was going on with my silver and gold plays today?   Something sneaky I thinks, my preciousss, yes…. verrrrrry sneaky, it is, yessss! <Gollum>!

A lot of people who watch these things were commenting on the PPT and elsewhere about the noticeable surge in end of day trading on almost every major precious metal play, both gold and silver.   What people may not have noticed, however, was that a similar surge — of similar length (timewise) was going on in the 10 a.m. to 10:30 a.m timeframe in those same names.   Let’s take a gander at today’s [[SLW]] 5 minute daily chart as our first example:

First, let’s note that there are 78 5-minute periods in a trading day.   In most of these examples we are talking about only 8 or 9 of those periods, because of where this buying phenomenon was taking place.   What was notable for me was WHERE these buys were coming in.   Conventional trading wisdom tells us that “the big money”  — meaning the institutional traders– will generally make themselves known in the very beginning of the trading day and at the very end.  

The first period of activity here is right at the 10 a.m. hour which is not literally the very beginning of the trading day, but perhaps marks the period where most seasoned traders begin to take positions “after the morning shakeout.”    Given that this is a Monday, and we had a relatively large negative futures position trading at the open, this explanation of “wait and see” makes some logical sense.   The uniformity across the sector also gives some indication of a coordinated purchase here,  as there were very few large well traded names in the precious metal sector that did not see some kind of activity in the 10-10:30 area this morning.

Note also the last twenty minutes of the trading day.   We can ascribe some of this scramble to short covering, of course, but large late day purchases generally bode well for tomorrow’s trading in these instances.   I believe that is so because institutions are clearing the way here for more explosive action in the next few days.    Keep in mind that the four five-minute candles (or, 20 minutes in total) we see make up only 5.13% of the trading day, but are responsible for 10% of the shares traded.   Again, I think this is significant not only because of the volume, but because the rapid ascent and the sharp upturn of the A/D oscillator shown in these last twenty minutes also indicates that most of that volume was buying at the ask.

Let’s look next at fellow Jacksonian Silver pick  [[PAAS]] :

If anything, the two moves in PAAS are even more significant in both price and volume, compared to the rest of the day’s trading.  The four five minute candles from 10:10 to 10:30 a.m. comprised 13% of the day’s trading and reflect a large buying program, as the price ascended rapidly.    The rest of the day consisted of light volume pullback until again, the last tweny minutes gave way to almost 20% of the day’s trading, and another rapide ascent in price.   All tolled, those forty minutes (10% of the trading day) of buying accounted for one third of the daily trading, and again seemingly almost all “on the ask”  — figuratively, if not literally.  

Let’s look last at New Jacksonian Holding [[SSRI]] :

SSRI shows a full half hour of buying in the morning, again, starting at 10:10 and concluding at 10:40.   While this morning purchase was not market by the same volume as PAAS, it again shows the rapid ascent characteristics of a persistant buyer or buyers behind the bid.    That half hour comprised about 11.6% of the daily trading (in about 7.7% of the time) and the “afternoon session” was limited to a brief fifteen minute period that was marked by increased volume and another very rapid ascent.     In that fifteen minutes (less than 4% of the trading day) we saw over 12% of the daily buying.   Again, I think it’s clear we are talking about a concentrated interest here in this final burst.

In the interests of saving time and space, I won’t go through the Jacksonian gold positions that saw similar patterns today.   Interestingly, not all of the golds — particularly the smaller cap names (like [[EGO]] and [[ANV]] ) — saw the 10 a.m. buying, at least not in the same consistent fashion.   However, they all saw the late day surge in purchasing with ANV seeing a full 23.7%  of it’s daily buying (along with a 4.5% price move) in the final 15 minutes!

We find the same morning and afternoon program purchases that we saw in the silvers above in Jacksonian pick [[RGLD]], with 10% of the daily trading between 10 and 10:25 a.m. and another 15.5% in the final 20 minutes of trading.   [[GG]] shows a very similar pattern, as do many other of the “big golds” like [[AEM]].

I guess in conclusion I’d posit that there’s something afoot here, friends, and that you should be attending to your PM positions, as I think we may see a more significant move here in the coming days.   Of course, we may not, and all of this coincidental analysis could be the result of  my rampant apophenia due to excessive exposure to William Gibson novels.    Nevertheless, I believe this action bears consideration and careful attention.

Be well, friends and enemies.

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I don’t have a lot of time to mess around today, as I’ve got to catch a plane to Noo Yawk for a weddin’ this weekend.   I”ll have you know that I come from one of those “wide & deep” Irish families, and as a result have about 2,326 first cousins on my mother’s side, which also means most of my “vacations” from spring through December consist of going to a wedding somewhere.   Ah , well — you live with these things for family.

That said, I wanted to comment on a bit of prejudice against the purchase of silver and silver miners that I encountered on the PPT the other day — coming, to my surprise, from one of our better known bloggers (he shall remain nameless for dignity’s sake)….

(cough!)

(cough!)

(cough! cough! ack!)

Anyway, I wanted to leave this note for those who might be concerned about this lack of discretion, and warn you not to take heed.   This is the absolute best time to be accumulating silver and silver miners, as the Blees Rating (large money accumulators) is over 90 (out of 100), and the government is destroying our currency at a rate matched only by the rapidity with which ACORN has signed up phantom voters for the next election.   

Most important, you must not heed the prejudicial rumours (sic) posted by some that accumulating silver will give evidence  that you may be one of these:

Not that there’s anything wrong with dressing special on one’s free time.

And, yes, other stocks are doing well here and some better than the JCH.   That’s a good thing, and you should take this opportunity to convert some gains into harder assets.   Because believe me now and hear me later — when the time comes, silver will take off without warning, just as it has in the past — leaving many gaping in its wake.   You want to have set aside your store of acorns for the winter.

For review, I like PAAS, SLW, SSRI, SLV and a smidgeon of EXK and AGQ…. and please don’t forget get some hundred ounce bars of the physical as well.   Same goes for gold coins, and EGO and RGLD look nice here as well. 

Be well all,  and I’ll check back in tonight or via Crackberry earlier.

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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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An expert rebuttal:

[youtube:http://www.youtube.com/watch?v=CaK9bjLy3v4 450 300]

PPT Favorite (at one time #1 pick) QSII (PPT: Buy) is looking like it wants to make another move over 52-week highs here.   On the PM side, the one damn silver stock I have been watching but not recommending — SSRI (PPT: Sell) is making a nice catch up move here, to it’s recent highs of $17.88, but I think it needs  nice pullback and $17.00 or so would provide a better entry when it does.  In the meantime, SLW (PPT: Sell)  (back above it’s 200-day MA) and PAAS (PPT: Sell) continue to be “accumulates” here, along with GDX (PPT: Buy),  all for the long term portfolios.

On the best PM on the radar right now, I’d look at RGLD (PPT: Sell), I think RGLD has finally recovered from it’s secondary sale, and will begin its run back to old highs this week.   Near term targets $41, $46 and $48, depending on how long you’d like to hold.    RGLD will be featured as a Jacksonian Core Holding stock, soon.    Stay tuned, bacon lovers, more pork products to come.

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UPDATE:  Bot 2,000 more RGLD @ $37.52

UPDATE:  Bot 4,000 more ANV (PPT: Sell) @ $5.83-5.86

Caveat:  If you follow me into (more) Royal Gold or Allied Nevada, there’s a 73% chance your favorite son will be conscripted to guard Fort Knox for Derby Week.   You may also lose cash munny.

_____________

Further update:  Bot 4,000 sh starter position in Thompson Creek Metals (NYSE: TC) @ $6.06.  

Caution: very volatile.   If you purchase TC you will likely be struck by a meteorite made of pure molybdenum, and that might sting.  Also, you might lose money, quickly.

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