I immediately went down to see what’s been keeping Danny from blogging…
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Since I was experiencing a cataclysmic Vitamin-D overproduction cycle out here in SoCal, the last sunny place left in America, I decided to come inside and see what the heck was going on with this market. For one thing it closes at 1:00 out here, so the hippies have many hours with which to purchase pot and snugly pack their bongs before the 6 O’Clock news. Odd, no?
Well, it turns out that despite my hedging and raising large amounts of cash, my portfolio continues to metastisize. In fact, metaphorically, it looks like a large Engine No. 9 freight locomotive going down the slope of Mt. Pilot, with all it’s air and hand breaks on full stop. I’m showering enough sparks off the railbed to tetch a bonfire, but I’m still moving forward.
I don’t mind giving up some of that opportunity cost, however, because we’re trying to be responsible with our cash over here at the JakeGint Blog of Low(er) Grade Mental Disorders. Here, we go by the semi-paranoid thesis that Mr. Market is trying to steal your wallet every second of every day. So if that means we don’t partake in his reindeer games to the fullest extent allowed by California law, but we return home with all ten of our fingers attached and facing in the proper direction, then we’ve properly schooled you in the tenets of risk management.
Right now, reindeer games are accelerating already large wins in such Dogberts as FTK, QSURD, ENTR, and AVL. If you have not taken profits in any of these, I would at least recommend a relatively tight stop. As well, while the miners are beginning to stall (as predicted), other Jacksonians, like MON, ANDE, TCK and TC continue to push along oblivious to the divergences and breadth problems we’re seeing popping up all over.
And here’s my real problem… the Gold Bug Index $HUI has broken through some significant support here (the 20 and 50 day EMAs) and is now trying to rally back above those levels again. Here’s the thing… I don’t think it can until it tests the 200 day EMA again like it did in the last major cycle down, back in July. For those of you who are not as concerned about the PM market, a breakdown in the $HUI will usually give you 5 to 10 days to get the heck out of the rest of the market too.
How long will I hold to this thesis you axe (sic)? Until we clear that green line atop the circular bodies on the right in the above chart. Only then will I say, “You have passed the test, $HUI, well done!”
More live pics of Danny to come…. best to you all.
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And don’t forget to have Danny take you skateboarding.
Indeud!
Oh yes, film at Eleven.
Please take Danny to get a haircut.
Hmm. Why does a breakdown in HUI presage a general breakdown? What exactly does HUI measure?
ABX, AEM, AU, AUY, BVN, CDE, EGO, GFI, GG, GOLD, HL, HMY, IAG, KGC, NEM
I think that’s all of them.
basically it’s an index on AMEX containing the above stocks…. the big boy miners.
ps. hui phooey. HIGHER!
California is a great place for those who want to trade but have day jobs, especially if it is a job that permits you to come in at 9 AM. It is necessary to be awake and thinking early, but several free hours to trade.
Jake- when do you tell yourself that the clock has started ticking for the 5-10 days to get out of mkt? Are we already there or would you call day one when it can’t clear 50 day? thanks
I would look for a fail on $HUI tomorrow or Friday, and then you have a week, give or take. This is not an exact science, so you might want to get out of both at the same time.
Cute pooch, yours?
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Jake– do you see a quick correction coming (ie hold my longs but hedge) or more drawn out? (will exit many more longs now)? And thoughts on dollar support?
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Re avatar–Just looks like a lot like my golden when he was a pup.
Appreciated your comments tonight re giving us another heads up on the market (in #6 and indie’s posts below). Will adjust portfolio accordingly tomorrow.
Jake – Do you think it is possible we are in a new bull market? merely enjoying an uptrend in a secular bear?
Possible, but I think more the latter.
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Jake,
You forgot about Hawaii.. a part of America no? It is very sunny here and our market closes at 11:00.
I don’t know now you do it, H5O. If I lived in Hawaii, I’d be getting up as the market closed.
You guys are only 2 hours earlier than LA? I thought it was more than that.
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Yes 2 hours. I go to bed early and get up about 1 1/2 hours after the market opens. When day light savings time kicks in it will be 3 hours difference.
For those of you in Rio Linda, that means that right now we get up at 4:30 AM for the market’s opening bell, and 3:30 AM during the summer.
Thanks for explaining that. I wasn’t very clear and even the Rio Lindians have a right to know.
The vintage tin cup and gange sticker are a nice touch. I would have given him grief for not acheiving full lotus position though.
It does seem like the times, they are a changin’ but what is the catalyst? QE2 is still pumping – hard to fight that trend.
Jake – doing anything in silver here?
Noooooo.
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Keep a hammer close, Jake…
I’m one more -5% day away from my stop on EXK, you might need to break that piggy bank open.
Hmmm….looks like we are getting the “fail” in PMs that you were looking for. Lot of PM newbies that piled in at the end of last year are going to lose a finger…or 10.
Jake gonna love this one. Can’t wait for the rebutt.
http://www.madhedgefundtrader.com/january-14-2011.html
3) The Republican Deficit.
In the wake of my rant about the origin of our national debt yesterday, I want to pass on the chart below sent to me by a reader. Of the current $13 trillion the US government owes the world, roughly 75% was run up by Republican administrations. Do you believe that the Democrats are the big spenders? Think again. The numbers from the Treasury Department tell a completely different story.
Ronald Reagan engineered the first deficit surge, taking the country’s IOU’s from $1 trillion to $4 trillion through a massive expansion of military spending and big tax cuts. This gap was primarily financed with borrowing from then wealthy Japan. That debt has never been paid off, just rolled over, and still sits with us today.
Bill Clinton presided over a mere $1 trillion in growth of the debt over eight years, enforcing strict “pay as you go” that tied any new spending to new revenue sources. George W. Bush was the mother of all big spenders, taking the debt from $5 trillion to $10.5 trillion. Don’t blame this on our wars. The overwhelming portion of this profligate expansion came from two whopping great tax cuts that were primarily borrowed from the Chinese. President Obama has since taken it up $2.5 trillion to $13 trillion.
I bet that if someone conducted a poll asking which party was primarily responsible for running up such gargantuan numbers as these, 90% would answer that it is all the fault of Democrats. This kind of erroneous perceptions is what billions of dollars worth of negative advertising and fake research by politically funded “research” organizations buys you. While corporate America bitterly complains about American taxes “rates” that are the highest in the world, how many of you know that 30% of the Fortune 500 pay no taxes at all, and are a big cause of our deficit problems? I bet very few. To see how quickly our situation is worsening, please click here for a real time national debt clock. http://www.brillig.com/debt_clock/
I thought today was the 13th?
It will appear tomorrow.
How do corporations not paying taxes cost us money? You realize that corporations take their taxes from you and me in “pass through” fashion, right?
A small grouping of business courses would rid us of 95% of all Democrats, methinks.
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Please learn civics.
CONGRESS SPENDS THE MONEY.
Check the last time we balanced the budget and flatlined the debt. The Congress was?
Why do Dims always push the Presidential thing? It means nothing, except when their ideas about spending are accepted by the current Congress.
Hence, Pelosi-Obama-Reid DEBT BOMB.
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As an Independent it irks me when the POTUS says he has a mandate and is spending his political capital … a mere bully pulpit message to congress that they had better pass his budget as submitted or suffer the consequences in the form of Veto Power.
Here’s my original response but I never hit the “submit comment” button deciding to let Jake make the customary response himself ….
> He’ll do the usual electric slide … blame congress rather than those POTUS’s intent on spending their political capital based on their wide margin of victory … tongue planted firmly in cheek! <
CONGRESS SPENDS THE MONEY, cluck for brains.
Sheesh, you’d think November would be a wake up call for some of these Pelosi “Independents.”
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That’s the problem with the dems … they always give in to their adversaries in the name of bipartisan politics as they did with those budgets but never learn that their counterparts never operate in the same vain when the shoe is on the other foot ….
You are obviously living in a freaking dream world after the last two years of forced down carnage from your diktat following partisans.
What the Dems did, in the complete absence of compromise, will have a baleful effect on this country for decades to come.
You need to wake up and absorb the shame.
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“Until we clear that green line atop the circular bodies on the right in the above chart.”
Which one is the green one? I wish i was kidding.
ps – I’ve been in LA this whole week. Didn’t realize you were out here. You going to see #4?
Saw him last night, but he’s too Mary to go out tonight. We will have b’fast in the morn.
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There’s only one straight line I drew on the whole chart, so you could use process of elimination, no?
The one that is correpsondant w. 580 on the horizontal above.
Anyway, what I predicted has already come true. Prepare for the deluge in PM and regular markets.
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Jake
Can i have your informed opinion on:
GRS
AZK
AUY
Thanks in advance. you can answer inside the PPT notes if you prefer.
They will all be fine AFTER this pullback.
I wouldn’t touch any of them right now with an additional buy, but I do own some AUY in my core port.
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GSS – Early to the party but it’s getting killed. Picked up a good chunk of DZZ and will ride this out. Doesn’t look like this pullback in PMs is even close to done.
Watch that DZZ at tax time.
It’s treated like a partnership and you will be getting a Schedule K instead of a 1099 and then they will be sending you a bunch of revised “K’s” through out the year (after you already filed).
Stopped out of everything for a nice gain. Just hanging out in DZZ and waiting to get back in the PM wagon.
What do you think of RGLD if gets down to the $47.50 area? Back up the truck?
Started nibbling at $47.71
use the continuous $GOLD contract as your proxy
this looks like it might be a longer correction than the rest
watch how it reacts off of the 100 day and if it fails the 200 day is next
commodities have been weak, rare earths are getting nailed and we are due for a correction in the $SPX
Sometimes I think some of you may be retarded.
NO!
Read the next page to see what I’m doing. Hedge Hedge Hedge!
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LOL.
Jake- So what do you think of ECO (Echo Bay Mines), SSC (Sunshine Mining), HM (Homestake Mining) and BRE-X?
Too late to buy?
So you’re saying “buy buy buy”?
Lolzzzz