Not Ready for the Rubber Match, Obviously

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The good news is that we should get a really nice bounce here in the next couple of days, and perhaps as early as tomorrow morning. The bad news is that I think we’ll very likely drop another 50 points on the S&P, and may drop as much as 90-150 before we get that rebound.

Here’s what I’m looking for on the $SPX — the only index that really matters here, although one could make a case for shorting the Cubes (QQQ) tomorrow morning as well, as it has yet to drop like it’s brethren.  I think that it’s very likely we get a quick broken elevator tomorrow to 1050, minimum.   If momentum really picks up, it might even drop as much as 90 to the second (red) line here:

 

 

And yes, even 950 is a possibility here, if the momentum gets all ragey to the point of the Friday employment numbers.  I really don’t expect that however, as we are egregiously oversold here.   I will be loosing my SKF, TZA and ERY to the trade winds as we visit these levels.  I may keep a base of the Skiffles, however.

Another reason I see the downspike continuing is that the dollar doesn’t seem to be done here, after busting through that resistance at $79 on the index.   I think the next target is the 50% retracement here:

 

Important to realize here, on this dollar index, however, is that price is finally through the 200 week EMA again, and we have the 13-week EMA finally crossing back over the 34-week EMA, with both on the upswing.   This is not good news for either the market or our precious metal friends, girls and boys.

Get your helmet.  Get two helmets and sit on one.   Protects against land mines.

Best to you, and take good care.

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I am sorry if you were unceremoniously dipped in pineapple sauce and then stuffed into the cherry smoker today, ending up braised to a fine turn.

It’s not like I didn’t give you ample warning.  In fact, that warning was even more ample today in The PPT, where I announced I was adding to my growing stacks of SKF, TZA and ERY certificates. 

Those certificates, and their already in-place comrades, yielded substantial gains for me and mine this day.  And I’m pretty sure they are not done, as of yet.   In fact, given some of the panicked calls I received from friends today, I think tomorrow should be a pretty interesting open. 

If you haven’t gone short anything, it’s probably a little late to start right now.  I’ll have more on that with some charts tonight.  In the meantime, enjoy this Indian Summer we are having in God’s Country, and try not to get too upset about the wayward state of the economy.

Help is on the way.  My best to you.

Addenda:  as it seems Le Monsieur has grown tired of most of you over at his site.  Please let the man rest.  In the meantime, do feel free to vent your concerns and comments on my fora. 

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Rare Photo of Mr. Bilderberg’s Dog, Barbarossa!
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I’ve cut back once again to about a 25% position in my silver and gold positions.   This is merely a precaution, as the clouds looming seem ready to ram us down the throat of an all encompassing Deflationary Fat Man.

I also want to have some cash on hand for anticipated lower prices, especially in the miners.   We’ve been down this road enough times in the past ten years to see some of our favorite names go to “poleaxe pricing” — that state of irrational selling likened to a shareholder being bashed hard enough on his melon that all opposable thumb functions disappear, and share certificates cascade to the floor willy nilly.   We want to be there to pick those newly discarded certificates so as to be better able to offer them back to aforesaid bashees at prices significantly premium to their current ones.

I also added more TZA and SKF yesterday, and — in the spirit of true deflationism — added almost as large a position in the oil double neg, ERY.   I am now pretty massively short, on a dollar basis and on a “relative dollar” basis, especially, as all of these positions are leveraged shorts (either 2x or 3x short ETF’s).

I will likely maintain the SKF as I have been, and leave it largely alone.  With the TZA and ERY I will probably be more opportunistic, trading in and out as warranted. 

Any changes in this philosophy — and I may change radically tomorrow, such is the nature of a volatile bear market — I will communicate immediately, although actual trades will be announced in The PPT first.   I don’t pound the drum on that valuable service enough, but now is a very crucial time to be participating, not only for what the “better than the average bear” traders are saying in there, but for what they are NOT saying as well.

Best to you all.

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Fast Winning a Place in Jake’s Heart

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…And bloody and exhausted.  I just did a lot of driving on some client work and it’s been a rough couple of days. The meetings were far afield and I had to sleep in a Brady Bunch-era Courtyard by Marriott last night. The hotel clark (sic) looked like he could have been the Crypt Keeper’s younger brother, sans the warm and vivacious personality.

What’s more on the way back I passed the time rocking to a zillion 30 year old Sirius satellite tunes (First Wave with the Swedish Eagle) while trying to peruse the various iBC posts of interest on my B’berry. I know, “safe as houses” right?

Not so safe, however, when you come across the post remarking how French population call Le Monsieur “L’Envincible Le Fly.”
I almost rolled into a passing semi after I’d seen that one.

Anyway, my “all day business” today forced me to put a stop on my AGQ position early this morning. To my chagrin, that stop was hit.  Now I’ll never be able to introduce my children and grandchildren to my horde of “double stuff” silver paper.  Ah well, comme ce, comme sa.

I have stops in on other mining positions as well, but only NGD’s was hit today.    Last, I doubled the size of the TZA position I put on last night and added another 2k of Skiffles to my horde.   Both positions were up huge today, as you might imagine.   I wish I could say the same for my remaining benighted silver and gold miners.

Tomorrow I’ll be back in and better able to monitor the situation, but make no mistake, I am increasingly bearish here…  That should be good for a nice counter rally about 11:00 am tomorrow.   Stay tuned,  and don’t hock your hoop earrings and tongue bolts just yet.

Best to you.

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Owsley Brown II, a pillar of the city of Louisville in the truest sense of the word, passed last evening, at age 69.  It was quite sudden and unexpected and most of us who knew him are in shock, as he was a very vigorous and youthful man who was intimately involved with many charitable and cultural organizations throughout the city.

If you know me, you know that I am not overly impressed by those types we referred to at school as “born on third base.”   In the case of Mr. Brown however, I make a significant exception.  We were not close, not even “friends,” but I had enough interaction with the man in social and work situations to note both his grace and his almost anachronistic humility.   He had a smile for everyone, and never seemed out of sorts.

Some of the obituaries already printed (like this one in the Wapo) make mention of his charitable activities, but in truth these reports only scratch the surface.  The man truly embodied the aphorism “to whom much is given, much is expected.”  I believe his generosity will be his lasting legacy in the city.

I excerpt the beginning of the Washington Post obituary below:

Former Brown-Forman CEO Owsley Brown II dies at age of 69 after

brief illness

LOUISVILLE, Ky. — Former Brown-Forman Corp. chairman and CEO Owsley Brown II, who took the company founded by his great-grandfather and spread its reach to liquor stores, bars and restaurants worldwide, died late Monday after a brief illness. He was 69.

Brown’s sudden passing drew an outpouring of reaction from political leaders who praised his business skills and philanthropic spirit.

“Louisville lost a great friend today; he will be missed,” said Sen. Mitch McConnell, R-Ky., who praised Brown’s “pioneering career” and “generous philanthropic efforts.”

Brown oversaw the Louisville-based company’s transformation into a formidable player in spirits markets worldwide. Late in his career, Brown-Forman shed its Lenox fine china and Hartmann luggage divisions to focus on its core beverage business.

Brown-Forman is one of the largest American-owned spirits companies. Its long lineup of brands includes Jack Daniel’s Tennessee Whiskey, Southern Comfort and Finlandia vodka.

“Owsley was a truly remarkable man with a brilliant mind,” said current Brown-Forman CEO Paul Varga. “His combined analytical and creative talents enabled him to be both a visionary and a practical steward of the company’s business.”

In its last full fiscal year, Brown-Forman reported net income of $571.6 million, or $3.90 per share, on revenue of $3.4 billion. The company has nearly 4,000 employees worldwide.

Brown, a Yale graduate who earned a master’s in business administration from Stanford University, served as an intelligence officer in the U.S. Army at the Pentagon, according to a Brown-Forman release.

He began his Brown-Forman career in 1968, continuing a family legacy that began with the company’s founding in 1870.

Brown rose to become the company’s CEO in 1993 and added the title of chairman two years later. During his tenure, Brown-Forman dramatically boosted its international presence and modernized its marketing efforts.

When he took over as CEO, less than one-fourth of Brown-Forman’s net sales came from outside the U.S. By the time he stepped down as chief executive officer in 2005, nearly half of Brown-Forman’s revenues were generated from international markets. That trend has continued, and the company now gets about 55 percent of its total net sales from non-U.S. markets.

Brown retired as company chairman in 2007 and from its board of directors in 2008.

He was also a prominent philanthropist and preservationist known for his support for art, music and environmental protection.

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I have done nothing different with my portfolio today, save that I took out a large TZA insurance policy to augment my SKF-lles position.  I still maintain my already noted position in AGQ and my other small gold and silver positions.  I am still about 40% cash.

I am again traveling this evening and all day tomorrow, but will check in as I may.

Best to you all.

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[youtube:http://www.youtube.com/watch?v=6Uxc9eFcZyM 450 300]

Save That Schit For the Morning After

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A funny thing happened whilst I was away from the office today (for the second day)... I got murdered.   Usually when I’m out and about the market is pretty accommodating, like an Edwardian butler in white gloves and tails.   He  may give me a light workout, just enough to suffuse my brow with a light patina of salty perspiration, nothing more.   Even then, he’s there to hand me my plush towel and smoking jacket at the bell.

But today I was accosted by a gang of wiry Cockney longshoremen in baggy jodhpurs and nail-soled leather jackboots.   Reviewing my 50% position in gold stocks like ANV and silver stocks like — you name it, but SLW was down almost 15% today — they proceeded to bash me about the shoulder and ribs with brickbats and lengthy cords of hard salami.  They said something about leaving my face “intact” so there’d be no questions at work tomorrow.

Nevertheless, I speak to you from traction after suffering a near 7% bullshit beating today (don’t believe me? Check out XRA’s action today, and GFYS!), and am lying here in my linament-soaked bandages, waiting for a bounce to get out of some of these damaged names, as per the plan of yesterday.

A bounce, you say?  Jake, you addled fucker, you were thrown down one too many escalators today! How say you “bounce,” pray tell?  Well, here’s clue # 1 on the $SILVER commodity chart.  It’s been almost 15 months since we last hit the 200-day EMA, and yet we hit it today.  The RSI is oversold egregiously as well:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As for the $HUI today… well, you know the sad sad end of that story.  Like Brad Pitt’s relocated Northern Irish Provisional Army man, Frankie McGuire, said to Harrison Ford’s NYPD sergeant, Tom O’Meara  in the 1997  IRA potboiler, The Devil’s Own —

“Don’t expect no hoppy endin’, Tom.  It’s not an American story, it’s an Oirish one.”

Yes, and it appear’s our Baby $HUI ended up just as perforated as young Frankie did at the end of that movie.   What’s more, it looks like there’s still some room to travel even closer to Hell:

But don’t cry for me, Argentinians.   I am getting up and hitting back twice as hard, Chicago Politician-style.  In fact, I swung a haymaker at a bunch of AGQ this afternoon a little too early, at $175 and got stopped out.   I may grab some more on the open tomorrow though.   Also, respecting The PPT and it’s historically oversold levels, I dumped out of half of my TZA hedge and loaded up on a very large dollop of TNA at the close.   I may even add to that if we have a last blow off tomorrow morning.

Don’t let the Man get you down, folks.   Let’s hang together, as we sure don’t want to hang separately.

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