Improve your aim!

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I don’t have a whole lot of commentary time tonight but I wanted to get this in because a number of you were fretting about today’s action.  True, we did some pretty nasty technical damage on the price of gold, but not yet enough to convince me to run screaming.   That’s doubly true with the faithful indicators of The PPT signalling oversold on the GLD trading vehicle.

I am seeing a lot of oversold conditions in the miners as well, as many of you are probably uncomfortably aware.  This is not the time to be sinking your dough into highly leveraged bets, as the dollar can get away from us very quickly with an index break towards $80.00 and an escape from the double top condition we had just a week ago.  That means those of  you messing with AGQ better steer clear… y’hear?

Gold itself — the commodity — has been very good about respecting it’s 34-week EMA ever since the 2009 lows when the precious started making its epic comeback.  I believe that weekly line will hold again this week, but beware — we may get a tail on this candle before Friday (note the other tail penatrations of the line in the historical chart below), and you may want to lighten into tomorrow’s expected bounce as  a result.  Here’s the chart:

Remember, it’s better to be safe than sorry at this juncture.  Don’t be a hero and let’s play small(er) ball while we figure out which way the dollar is going to resolve itself.

My best to you all.   Tomorrow, I will endeavor to get a short economic piece out challenging Mr. Henry Blodget’s latest brainstorm declaring that it’s not actually entrepreneurs who create jobs… but “demand.”  (NOTE: as of right now, the post has been taken down or the link is dead… I think Blodgett realized what an ass he’d made of himself, but let’s give it to tomorrow to see what’s what).

I can retell the tale tomorrow, but suffice it to say that if this is the latest liberal shibboleth being trotted out to attack classical economics (and basic common sense), it needs to be nipped in its exceedingly innumerate bud.

Best to you all.

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[youtube:http://www.youtube.com/watch?v=a6MMW-NJmt8&feature=related 450 300]

Sublime Christmas Beauty

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Mid-month Christmas ruminations…

I’ve always been a big fan of the Christmas season*, even if that appreciation has morphed from that typical childhood manic Santa-Greed, to that middling “purchasing for others” egotistic patronage phase, and finally now onto the “enjoying the little ones’ joy” segment.  For what it’s worth, this last bit has been the best.  You wish they could stay small forever, but even into their teens, the kids are a treat on Christmas morning and throughout the holiday season.

But as I’ve gotten older I’ve also realized that Christmas is about more than rejoicing with my immediate family and friends, it’s about attending to one’s community as well.  I like to think of the season as a kernel to build upon for the new year — and as a reminder of what the heck we’re doing here in the first place.

Christmas is a gentle ego aide —  that helps me remember we are not here to build wealth or careers or even organizations — or at least we are not here to strive for those goals for their own sake.  We are here to serve one another, to serve the least and even the greatest if that is the call.

I was therefore dismayed to hear an older gentlemen (50’s) the other day say he “was just about Christmas’ed out,” (this was December 10th).  I first thought to myself, “how cynical,” but then upon further reflection I realized this was probably an indication of seasonal depression, most likely caused by a prematurely arrested Concept of Christmas.   If one saw each Christmas as a wholly commercial exercise, bracketed by obligatory holiday parties and regimented relational visits, I could see that getting rather tiresome as one approached a half century on this planet.

But instead, if one could see Christmas as a challenge… or even as an annual quest to find the right person, group or community to serve for the season, and perhaps even for the new year, then Christmas becomes something else, something even more wonderful than the joyous mornings of our wrapping paper youth.   And I’m not just talking about the quotidian forms of charity, although those are certainly important and necessary.  I’m talking about reaching out to that Bob Cratchit in your life if  you are a boss, or that Ebenezer Scrooge if you are an employee.

Someone needs you, right now.   What better time to take that excuse to reach out, and to offer a hand — even anonymously– to those in need of a friend or a patron? Take this Season and make it special, and carry that extra joy with you into the new year and onto the next.    I promise you will never be “Christmased out” again.

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*(Please be assured that when I mention “Christmas” as the season, I recognize that the December Holiday Period is a time of joy and familial reflection for many cultures and faiths, just as the New Year is a time for renewal for us all.  I believe the prescription mentioned above is a fitting one for all men and women of good will, not matter their affiliation, or lack thereof. )

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As of this writing, the dollar is rallying again, and flirting with that $79-$80 range that has been been our “top” since last January.   All I can do is wait and see if Santa is going to be good to the little PM trader girls and boys.  If we breach our late November highs, then I will be shaving down to more cash, but until then, I will be eating samiches (sic), and thinking about bell ringing.

My best to you all.

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The Giants let another one slip between their fingers, to the hated Cheeseheads, no less, despite giving them quite the scare for perhaps the first time this season.   Moral victories, however, count for scheissola in this part of the season.  

That said, at least the Crackboys also lost — inexplicably — to the Arizona Cardinals, who I believe are working with a tenth string QB out of Mail-it-In State.    We play them next week and then again two weeks after that and if we can’t beat those sad sacks, well — it’s time for head coach Tom Coughlin and his trusty offensive coordinator Captain Kangaroo Gilbride, to pack their bags and just GO.

But I don’t want to hear a damn word from any of ye’s (sic) about the Giants’ recent four game collapse.  I especially don’t want to hear about how great the Pack, or that long haired narcissist Clay Matthews are.   What the hell is wrong with this guy anyway?  He’s like a woman with that shit.  Why is it so damn greasy the whole game?  Does he throw a bunch of conditioner in there so it’s nice and greezy (sic), so no one can grab him by it? 

Just get a haircut, Laughing Boy.

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Right now the dollar is struggling to re-assert itself despite it’s being leveraged against every shit currency in the free world.  Despite all that, currency traders are wising up and beginning to bid the “savings plays” up again, chief among them the yen.    So, even as the dipshits at  S&P do the Fed’s bidding by trying to scare the German’s pants brown, the dollar still struggles to even achieve today’s earlier highs. 

Curious, no?

You won’t see me running about, flibberty-gibbet style, sorry.  I just don’t have the time for it.   I’ll stay in the gold and silver plays I limned for you last week, thanks very much.  I still own some GSVC as well, btw, and even some WNR (the calls I wrote against them twice have all expired, too).  

I really hate to say “I’m with Teahouse,” but at least it’s not like I’m sitting on the fans’ side at Foxboro or going door to door for Ketchup Usurper John Kerry, right?

My best to you all.

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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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(Some of You May Recognize where I was this Weekend…)
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All is well at last, the Kabuki Theater entertainment has ended and we can all expect bright sunshine and free cherry-bomb popsicles for the remainder of the summer!

Or not?

It’s hard for me to see this as anything but a temporary positive, as it looks to be another boot of the increasingly cumbersome can “down the road,” once again.    Some of you may have noted that the plan calls for some $2.2 trillion in spending cuts over the next decade.  That may sound like a lot, but one must look at the way Washington politicians (and their scoring body, the Congressional Budget Office [“CBO”] ) define “cuts” before we can analyze that number.   Unlike you and me, who “cut” our own budgets by reducing spending, Washington defines a “reduction in the planned growth of spending” as a “cut.”  What does that mean in practical terms?

Let me give you an example to illustrate:

Some of you may recall my comment the other day on Fly’s blog that if Washington decided today to merely freeze current spending at 2011 budget levels over the next ten years, that would be defined by the CBO as a $9.9 Trillion “cut” in spending over that period.  Why?  Because the CBO looks at current Congressional spending plans like a layman might a five or ten year lease rate– they build regular increases into spending over the specified period.   In other words, the thought that a budget might NOT increase is almost unheard of in Washington.

In fact, it’s so unheard of, that the very “cuts” they are bandying about today are merely decreases in spending growth, not real “cuts” at all.  And since we can’t even afford spending at current levels, this means the “deal” brokered today over much jawboning and posturing doesn’t mean “jack all” with regard to actual deficit reduction, and it means absolutely squatola with regard to the overall burgeoning debt position of the United States Government.

Today, Congress is patting itself on the back for putting a finger in the dike like the famous Dutch boy of legend, but they are ignoring the gaping chasm appearing in the seawall 50 meters to the right.

Combine these last weeks’ complete waste of time in addressing the ongoing debt problems with the continuing reality of the Obama Recession, neatly laid out by the U.S. Commerce Department’s Bureau of Economic Analysis (“BEA”) just last Friday in a report stating that last quarter’s anemic annualized GDP growth rates of 1.92% had to be revised to an even more atrocious 0.36% annualized rate, and I’d say that we are deep in the crapper here, folks.

Leave the ongoing unemployment woes aside, the fact is that we were able to escape the consequences of our debt profligacy in the past by growing our way out of the problem.   As the above paragraph states, that ain’t happening here.  What’s more, if the Obama Administration continues with it’s plans to foist  Obamacare on lower value-added employee bases (read: “unskilled work forces”) and also continues with it’s heavy handed regulatory and “green” initiatives, unemployment is going to get worse before it gets better.

With these set of parameters, what choice, really, does Bernanke have, but to whip the printing presses into a frenzy to stave off Depression Era deflation?  And for how much longer does that strategy work in conjunction with our hemorrhaging debt problem?

When does the child (likely a Chinese child) finally cry out: “Look! The Emperor is not wearing any clothes?”

Let’s see what happens tomorrow, but I continue to like TBT, unless some madness grips the bond markets.  Gold and silver may take a hit here, on the “all is well” euphoria, and maybe even in the double whammy when everything starts selling off later tomorrow or this week.  I actually bot some NUGT and DGP on Friday, thinking the veil will be dropped a little bit on the Emperor when this deal gets done.   If I’m wrong, I’ll dump that extra, post-haste.

Oh, and I’m keeping GSVC, because the Fly is never wrong over the long term.

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For the “panicky types” who have perhaps been taking their eye of the long term ball:

Yeah, we might see a little dollar rebound action here, but that’s what happens when you hit short term support.  There’s still a pretty strong indication that those ALL TIME lows will come a calling again.  What manner of specie would you like to be invested in at that point?

Be wise.

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