Gentlemen, Start Your Engines!
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I don’t generally do the intentionally provocative headline unless I’m trying to get your attention. And usually, I’m only trying to get your serious attention on the breaking political stuff. Very rarely do I pound the table on the market picks, unless I think we’ve entered a special “sweet zone” where we should collectively be taking advantage.
I believe this may be one of those times.
Let’s start with the commodity gold ($GOLD) weekly chart to show where it all began last week. I’m going to use the weeklies on all of these mostly to show the consolidations and the breakouts, and also to show how much room this thing still has to run before it gets RSI oversold. The gold weekly broke out of a consolidation flag that has been forming since September:
Now let’s look at silver, via the double silver ETF $AGQ, where we are back above that first resistance support line after undergoing an RSI-divergence (again) since September:
Last, let’s have a look at the gold bug index $HUI which shows us what’s going on with the major miners. Note that we’ve been in a consolidating channel for almost 17 months now, and we have taken off from the most recent bottoming with a strong weekly push:
I think that failed channel breakout from early September that has now consolidated into a flag pattern within the larger horizontal channel means that Baby $HUI is readying itself for a final breakout to the next level. Again, the abundant room left in the RSI and the other stochastics also give me some comfort here.
Now there’s a lot of room to make money in a cornucopia of names here, and– again– I’m showing you the weeklies to indicate that there’s time left for you here, especially in the traditionally strong names like AG, EXK, SLW, ANV, AUY, and even the larger players like GG and ABX. If you are not in any of them yet, then I would certainly make sure I had a position in SIL, GDX and GDXJ in order to cover the industry as completely as possible.
As for my favorites right now, I’ll give you a couple that I think you can buy “rain or shine” tomorrow because they’ve got so much “mo” behind them right now. The first is my long time favorite and Jacksonian, RGLD:
Again, there’s just so much power in that lift off the floor. You can wait, of course, to see if we break out of that triangle, but I think that volume and price action from last week are indicating that we may get out of it as early as this week.
My other “immediate” pick is Alexco Resource Co (AXU), which I have not mentioned in at least a year. Alexco, however is betraying a consolidation pattern almost as toothsome as the one AUY broke out of late last year. As you can see, this one’s bumping it’s head on the hypotenuse ceiling of that triangle. I think with anything close to the volume of last week, that ceiling is history.
Enjoy, and partake, if you like. Despite the temporary winds against us right now, I don’t think we’ve seen an opportunity like this in almost 18 months. Make hay while that sun still shines.
Best to you all.
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Good post. Re: HUI, 17 months or 17 weeks?
Months… since September ’10.
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Ahh. I see. I was looking at your declining channel.
Thanks for keeping us informed.
I’m probably going to wait for a small pull back as I am already a hair over 75% of the port in said “free money,” but I plan to bring it up to 100% after the pull back and hold for awhile. Now I’m trying to decide between AGQ, RGLD and DGP or maybe a combination for that extra 25%. Hmmm??
Also, keep me informed about what you’re thinking politically. I always factor that in to what I’m thinking. Even though he’s a bit of a rascal, I’m kind of liking Newt right now .. perhaps I just admire his debating prowess.
Re: Newt’s debating skills… I don’t see Romney beating Obama in a debate while I see Newt destroying him. That doesn’t mean he’s the right guy for the job, but it is something.
I am not interested in the travails of the speech and debate team or even of my local Toastmasters.
This is for the Presidency of the U.S. and I know for sure that Newt Gingrich cannot win it.
Conservatives have to choose, do I want to see Obama humiliated, or beaten in an election?
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Newt Gingrich cannot beat Obama in a debate because Gingrich speaks before he thinks too much.
Obama on the other hand, rarely contradicts himself. He just spouts very consistent bullshit.
Newt cannot defeat the Teleprompter (Voiceprompte). It is too powerful for his “Lunacy,” (moon joke)
Jake,
Why do you think Newt can not beat Obama? Just curious as to your reasoning.
Besides personality, looks, baggage, and track record you mean?
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Jake —
Kick ass post sir. Wish you a great week.
Thanks Jake, great post as usual!
Gold has been on an eleven year uptrend after
two decades of nothing .
We are due for consolidation ( I hate that word as it means I’m going to lose money if
I stay long ).
I have no desire to sell gold , but I would
like a hedge . Any suggestions ?
That first chart is a weekly, so I think we’ve already had our consolidation, but if you want to hedge you can always sell calls against your positions. Nice way to make some income in a blah market.
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The “Bernank” is your hedge. There’s no where to go but up in the long run.
Seems like the pop in GLD and SLV is a bit extended short term… let’s hope a nice entry presents itself
That’s exactly what I’m hoping for, and it’s also why I put up weekly charts. I’m hoping for a couple of days of pullback… but it may not even be that long.
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Maybe time for a quick hit in NUGT?
I’d wait to see how today shakes out.
I’m thinking tomorrow some time, maybe.
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I’ll give you this Jake: the dollar looks ugly.
But, will it be allowed to collapse, or will we get a 2012 EURO LTRO-BALANCE SHEET EXPANSION PARTY OF DECADENCE!?
I think it’s in the Fed’s best interest to keep the Euro stable, in order to keep all those corn-holing idiots assembled in their Mega-State.
It’s certainly makes for a more efficient world for Uncle Ben.
He will continue to “provide liquidity” until that rope will no longer spool.
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Agreed. But when does the wiggle room run out? Bernanke cannot beat Europe in a trillion euro race.
There is no “Euro,” only Zul ($USD).
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Don’t let my above post on the bubbling PM market put PABST BLUE RIBBON out of your mind. The 20 and 200 day EMA are meeting here at about $29.25 or so.
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It’s very tempting to just take profits here, but I’m trying to learn Old Turkey here after reading about half way through Jesse’s book. But you know it’s a bull market.