_____________________

Unsurprisingly, gold and silver are not done bottoming, as per today’s evidence, and to my favourite Kansas Cityan’s temporary chagrin.  And like the dollar reflects the value of gold and silver as it crashes, so gold and silver serve as lodestone for the direction of the dollar. 

See, gold taking a bloody digger like it did today is not consistent with a plunging dollar.  Quite the opposite.  And remember that daily silver chart from just a few days ago?  Here it was:

Those were the predicted directions.   Now, let’s look at the same chart as of close today:

Wacky, no?  We reversed almost completely the pop we had the day before, and gold did worse, achieving recent near term lows for 2011.

It might get even worse, so hang on, and deploy capital sparingly.  I have added to my ZSL  about two hours before the end of yesterday’s session.  I felt a pained fool at the time… “but I got better.”

Here’s what I’m really getting at.  Take a look at this very large Fibonnaci Retrace on this almost three year dollar chart :

Now I realize the above chart is a bit busy, almost akin to the Punch Buggy Post we had the other night.  However, you need only take into account a couple of things.  First, we are hovering almost exactly at the Golden Ratio — the 61.8% retrace of the  large dollar move from the depths of the last Bernanke dollar destruction in March of ’08, to the peak in early March of ’09, when the market bottomed.   This is a significant resistance point for the dollar, in my opinion.

Second, we are also very close to the rising trend line in the dollar.   I believe the dollar is far too oversold to break the longer term trend at this time, unless of course Bernanke just starts shooting Benjamins out of cannons on K-Street tomorrow afternoon. 

So, if by chance that very strong Fibonacci line does not hold tomorrow, then I believe the uptrend line will in the next few days.

Whichever the case, we should get a snap back in the dollar, no matter how brief.  I think we see at least a 5-7% correction out of  that dollar, which will likely include our miners.  I may lay some more DXD, QID, and SDS at that point.

I also think our miners will rebound first, so be ready to start collecting.   Best to you all.

__________________________________

Comments »

 

________________

That’s right, folks, I’m just going to keep steepening the metaphorical curve until this market breaks, no matter how ridiculous I eventually become.

Don’t worry, “SuperNova” is still some weeks away, and for now we will talk about silly bulls idling about in a bucolic wheat field only to be set upon by a near-silent International Harvester Combine with razor sharp blades that will quickly render them into so many two and a half inch ribeye’s ready for dry-aging.

Again, despite myself, my portfolio edged up again today, a half percent, sparks flying and hedges hedging.  And weirder still, my half and one-third positions (thus far) in QID, SDD and SDS were all off rather minimally today.  In fact, SDD was even up a tad.   None of this action is making me think my thesis is wanting, though I may be stuck waiting while we grind to the end of this current cycle.

The only hedge that drew significant blood today was the one that had no counterpart (unless you count my small core position in SLV), which was my one half position in ZSL, the silver commodity ultra-short ETF.    Everything else was offset, including my SLW sold calls, which were outpaced by the underlying stock’s gains. 

Many of you chided me today about silver having a good day, but in your heart of hearts, you saw how the price struggled, and how my two favourites, SLW and EXK struggled to retain gains.   This is not the action of a bull ready to take off, but rather one that is seeking a siesta.

Make sure you have cash on hand, and please, stay out of the cornfields, Children…

_______________________

Comments »

 

_____________________
Despite my adopted team, the Green Collar Jets, winning an improbable playoff victory over the hard-to-like Tom Brady Patriots this weekend, I am in full choler right now, due to the exigencies of hardware failure. I’m downstairs posting from the kids’ computer tonight because my trusty Sony Vaio has gone “Vaio (sic) con Dios!” on me, and seems to have left the station for that great electronic synapse farm in the Sky. I guess that last trip out to California was just too much for it.

Suggestions are welcome, as long as you do not recommend I purchase a Craapl.  I have no interest in seeking out a new career in fashion and design, thanks very much.

_____________________

I expect many of you — my more loyal readers — are already in the bunker due to my ample warnings over these last two weeks.   Many of you, however, resemble the man at the top of the page, and love The Funnel so much that you’ve fashioned special Funnel Hats to celebrate itscoming, and your imminent dive down it’s narrowing throat structure.

Well, the original man with no heart —Steve Jobs — just declared he was going on another Health Holiday, most likely so he can rendevous with the Mother Ship and pick up the next space alien technological doo-dad for Craapl, and therefore kick Bill Gates’ & Steve Ballmar’s asses with greater alacrity.  That also means the market is now free to sell off with great vim and vinegar.

Got your QID yet?  I’ve only put half of mine on, as planned.  I think tomorrow might be the day for the rest, however.

Meanwhile, back at the old gold mill, I have sold down to a comfortable level, and I continue to believe we will see a pull back in the 10-15% range off the recent highs.  That could easily bring us to $1,300 or less on the POG, and we all know silver likes to make gold’s price moves look kittenish in comparison.   As a result, I have even purchased some ZSL to warm the bed I’ve made for myself.   You should consider trimming your EXK and SLW and PAAS, for sure, and please get out completely from the AGQ, before you hurt yourselves.

What’s that rumbling you hear from my garage?  Why yes, it does happen to be my 12-cylinder dual cammy (I have no idea what the means) slung back black coupe FAZ-mobile idling in the drive.   I haven’t taken it out for a spin yet, but I will be eyeing the BKX with great interest, JPM “grande” earnings aside.    Heck I may even break out a bowl of Skiffles for my morning repast tomorrow. 

It’s been a while hasn’t it?   And yet, somehow… it just feels right.   

Remember the plan, now Funnelites.  The plan is to have cash to invest in this PM bull for the long run into dollar implosion.   That emphatically does not mean you play “long-only” for the duration.   You should have a core in store, but right now is not the time to be a hero.   Take a break, take a vacation, or better yet, move to North Carolina.   No need to make life any more stressful than it already is.

Best to you all.

__________________

Comments »

 

_______________________

Man,  I hate days like this.  Even when I hedge my portfolio and sell down to my core holdings, I hate to see my beautiful PM’s get whacked like a homicidal Joe Pesci character in a typical Scorsese mafia flick.

But this is the world we live in when we choose to invest in the biggest bull in the last ten years.  All we can do is strap ourselves to the mast, make sure our cargo is well stowed (in hideous questionably weurthy (sic) cash), and ride out the 60-foot waves.  Right now, the beauty of beauties — SLW — is getting cranked like a Model A Ford with battery troubles.  Did you sell down to your core?  Do you have hedges in place? 

Still hurts, doesn’t it?  Well, going forth all guns and vinegar butter hurts even more.  So get hedged, now.

Today, I actually got some short ETF’s.   I purchased QID, SDD, and SDS — half positions in each.  I expect I will add more.  I also picked up several thousand shares of ZSL.   

I’m off from the West Coast… will patch back in tonight.

________________________________________

Comments »