Jacksonian Deflation

‘Twas a rough day in the trenches for most of the Jacksonian Core,  but then we turned lemons into lemonade by using the retrenchment here to pick up some final positions in the silver miners, including AGQ (Double Silver ETF), PAAS,  and SSRI.   Those buys were featured in my previous post,  if you want entry points.

   I did not add to my “favourite” (sic) silver miner – SLW, but only because I already have what I consider to be a “full position” in SLW, at least for now.    I may augment that position from time to time with options purchases (or sales in hedging situations), but I will likely not add any more equity in that name.

I also eschewed adding more EXK  (-5.89%) today, due mostly to it’s volatility and low float (less than 150 k shares traded a day).  This is a stock you want to accumulate when it’s asleep — its just too damn hard to pick up when it’s moving hard one way or another.    I reserve the right to add to EXK in more calm seas.

I also added some non-Jacksonian Core gold positions, some old, and some new, whose entries are also found in the previous post.    You’ll recall I purchased a beginning position in NGD just before yesterday’s close.    That stock actually held up well, so I decided to also add its “brothers” NG and NXG.  All of these have been showing favourable (sic) patterns in the last few weeks, and their purchase is part of a diversification strategy in the smaller miners.   It’s best to take this shotgun approach with these smaller guys, as you usually cannot pick up their exposure via the GDX ETF, which only purchases the larger cap issues  but you want to have a position in these flyers for when they start to run.   Some of them will double and triple, but in these cycle peaks, you never know which.     

In that regard, I also added to my position in ANV at the end of the day.    Like with SLW and EGO, I now have a full position in this name, and expect to see it run to at least the 61.8% fib retrace at $6.72 before breaking out to new 52-week highs. 

I also took this opportunity to hedge out my largest (and non-Jacksonian) position in UPS, and to begin a “foot in” purchase in SRS  as well. 

Non-PM Jacksonians did well and not so well today, MON was up a little less than 1% while its sister Ag play ANDE was off  4.67%.    If ANDE cannot hold above the $19.40 uptrend line here, it’s likely to fill that gap over a dollar below it.   As well, Jacksonian Core Coal play NRP (-4.89%) has been performing miserably here, even as coal operators have been consolidating.    This could be due to a (temporary) interest rate response, but I won’t recommend adding to this one until it’s back over the 38.6% retrace at $22.70.     Last, refiner TSO was largely flat–  off less than half a percent.

Without further ado, here’s the 14-Member Jacksonian Core’s performance (arranged alphabetically for your reading pleasure) for today:

ANDE — $19.79  (-4.67%)

GDX — $37.94 (-2.61%)

GLD — $91.09 (+0.42)

IAG — $9.87 (-2.66%) 

PAAS — $19.26 (-3.02%)

RGLD — $40.60 (-2.98%)

SLV — $13.81 (-1.49%)

SLW — $8.85 (-5.04%)

SSRI — $19.93 (-5.18%)

TBT — $49.29 (-2.08%)

TC — $7.68 (-4.00%)

TSO — $16.09 (-0.43%)

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A bloody good evening to you all!

(Warning! Extremely stupid video to follow, usher the children from the room)

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

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Bot 1,000 more AGQ @ $44.27.  Bounced right off the 61.8 % fib line at $43.57 this morning. That would have been the perfect entry, but I was trying to respect my 10:00 am discipline.

UPDATE: Ditched the remainder of my CRAAPL @ $121.05.  Only 400 shs left, but I kick myself for not cutting it loose over $130. 

UPDATE: Bot 6,000 NG (PPT: Buy) @ $3.30

UPDATE: Bot 2,000 more SSRI (PPT: Sell) @ $21.18

UPDATE: Bot 6,000 (starter position)  NXG (PPT: Strong Buy) @ $1.85

Non-Jacksonian UPDATE: Just hedged out my UPS position purchasing the July 50 puts and selling the July 45’s for a debit spread of $1.50 a contract.   Shelter in a storm.

Non-Jacksonian UPDATE:  bot 2,000 SRS @ 24.55-.56 for downside hedge.

UPDATE: Bot 2,000 more ANV (PPT: Strong Sell) @ $5.81

UPDATE: Bot 1,000 more PAAS  (PPT: Sell) @ $19.09

Caveat: If you purchase any of these PM plays you may wake up with The Midas Touch — but ironically — only with respect to your favorite cats.    On top of that, you could easily lose money.

Developing…

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AGQ (+3.75%)

EGO (+2.28)

EXK (+8.24)

GDX (+4.42)

IAG (+4.11)

PAAS (+1.28)

RGLD (+6.98)

SLV (+2.04)

SLW (+5.78)

SSRI (+7.41)

And newcomer (bot 10k @ $2.19 late day) — NGD  (+13.54) 

Non precious Jacksonians MON (+4.82) and TC (+3.36) did well today too.   

Ever onward — this PM revolution is not done by a long shot.

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[youtube:http://www.youtube.com/watch?v=Gz3Cc7wlfkI 450 300] 

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UPDATE:  Looks like we will have a chance, however brief, to get into some of these silver (and gold) plays this morning if we have been remiss.  With my usual caution, I will wait until 10:00 am or so to see what the market looks like.   I will be looking specifically at the smaller caps, like EXK, ANV, EGO, NG, NXG, and even CDE and HL.

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What the hell was going on with my silver and gold plays today?   Something sneaky I thinks, my preciousss, yes…. verrrrrry sneaky, it is, yessss! <Gollum>!

A lot of people who watch these things were commenting on the PPT and elsewhere about the noticeable surge in end of day trading on almost every major precious metal play, both gold and silver.   What people may not have noticed, however, was that a similar surge — of similar length (timewise) was going on in the 10 a.m. to 10:30 a.m timeframe in those same names.   Let’s take a gander at today’s [[SLW]] 5 minute daily chart as our first example:

First, let’s note that there are 78 5-minute periods in a trading day.   In most of these examples we are talking about only 8 or 9 of those periods, because of where this buying phenomenon was taking place.   What was notable for me was WHERE these buys were coming in.   Conventional trading wisdom tells us that “the big money”  — meaning the institutional traders– will generally make themselves known in the very beginning of the trading day and at the very end.  

The first period of activity here is right at the 10 a.m. hour which is not literally the very beginning of the trading day, but perhaps marks the period where most seasoned traders begin to take positions “after the morning shakeout.”    Given that this is a Monday, and we had a relatively large negative futures position trading at the open, this explanation of “wait and see” makes some logical sense.   The uniformity across the sector also gives some indication of a coordinated purchase here,  as there were very few large well traded names in the precious metal sector that did not see some kind of activity in the 10-10:30 area this morning.

Note also the last twenty minutes of the trading day.   We can ascribe some of this scramble to short covering, of course, but large late day purchases generally bode well for tomorrow’s trading in these instances.   I believe that is so because institutions are clearing the way here for more explosive action in the next few days.    Keep in mind that the four five-minute candles (or, 20 minutes in total) we see make up only 5.13% of the trading day, but are responsible for 10% of the shares traded.   Again, I think this is significant not only because of the volume, but because the rapid ascent and the sharp upturn of the A/D oscillator shown in these last twenty minutes also indicates that most of that volume was buying at the ask.

Let’s look next at fellow Jacksonian Silver pick  [[PAAS]] :

If anything, the two moves in PAAS are even more significant in both price and volume, compared to the rest of the day’s trading.  The four five minute candles from 10:10 to 10:30 a.m. comprised 13% of the day’s trading and reflect a large buying program, as the price ascended rapidly.    The rest of the day consisted of light volume pullback until again, the last tweny minutes gave way to almost 20% of the day’s trading, and another rapide ascent in price.   All tolled, those forty minutes (10% of the trading day) of buying accounted for one third of the daily trading, and again seemingly almost all “on the ask”  — figuratively, if not literally.  

Let’s look last at New Jacksonian Holding [[SSRI]] :

SSRI shows a full half hour of buying in the morning, again, starting at 10:10 and concluding at 10:40.   While this morning purchase was not market by the same volume as PAAS, it again shows the rapid ascent characteristics of a persistant buyer or buyers behind the bid.    That half hour comprised about 11.6% of the daily trading (in about 7.7% of the time) and the “afternoon session” was limited to a brief fifteen minute period that was marked by increased volume and another very rapid ascent.     In that fifteen minutes (less than 4% of the trading day) we saw over 12% of the daily buying.   Again, I think it’s clear we are talking about a concentrated interest here in this final burst.

In the interests of saving time and space, I won’t go through the Jacksonian gold positions that saw similar patterns today.   Interestingly, not all of the golds — particularly the smaller cap names (like [[EGO]] and [[ANV]] ) — saw the 10 a.m. buying, at least not in the same consistent fashion.   However, they all saw the late day surge in purchasing with ANV seeing a full 23.7%  of it’s daily buying (along with a 4.5% price move) in the final 15 minutes!

We find the same morning and afternoon program purchases that we saw in the silvers above in Jacksonian pick [[RGLD]], with 10% of the daily trading between 10 and 10:25 a.m. and another 15.5% in the final 20 minutes of trading.   [[GG]] shows a very similar pattern, as do many other of the “big golds” like [[AEM]].

I guess in conclusion I’d posit that there’s something afoot here, friends, and that you should be attending to your PM positions, as I think we may see a more significant move here in the coming days.   Of course, we may not, and all of this coincidental analysis could be the result of  my rampant apophenia due to excessive exposure to William Gibson novels.    Nevertheless, I believe this action bears consideration and careful attention.

Be well, friends and enemies.

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Remember when I started posting for the start of competiton,  a little bit less than a month back?   I put up this look at the S&P 500 chart, to give an idea of where our regression to the mean (200-day EMA) targets might lie …

Well, here’s where we’ve come since that first chart, and perhaps some signs of where we might be going….

As you can see from the above chart, the obvious resistance point is right ahead of us, at the segmented red line, which is also the not-so-coincidental meeting of the 200 day EMA (@ 950) and the early January cycle highs of about 945.   I think it’s highly likely we pause and at least digest for couple of days at this level, if not complete a pull back all the way to the 50-day EMA in the 840’s region.   

That said, given the power of this recent move, and the very convincing money flow into the large caps here, I think we may have even one higher push to go after this pause at 945-950.   I think this market will continue to confound the bears by continuing to overachieve in the face of  “not horrible” news.  I think we go all the way to that second (blue) line at around 1010, and with very little provocation.  

In addition, there’s one other observation that’s been intriguing me here.   Do you see how there is very little resistance (via the price-volume bars to the left) before almost 1200 on this chart, once we’ve broken through that second target line?  

How ironic would it be to see the few remaining bears’ backs broken as the market galloped heedlessly through that light resistance “free air” all the way to that more formidable resistance bar in the 1250-1300 region, only to finally turn poisonous once again, and decimate every true believer who had hopped on the treachourous bull bus of certain death by that late date?  

I hear you all telling me to put the Vick’s Vapo-rub away as you read this conjecture, but take heed.   It could get severely, almost Andrea Dworkin–level ugly, and yet, I don’t see that “catch the market idiots” move as a fantastic scenario, given the current inflationary bubbles beginning to percolate in the PM , Earl, Ags and materials sectors.

But let’s face it, we don’t know what even tomorrow will bring for the SPX.   What we can use as a proxy crystal ball, however, is the Large Cap Techs as illustratrated by the following Cube Chart:

Note that the Cubes have already broken out of their consolidation zone, and are currently testing those levels on a pullback.   Note also they have breached their 200 day EMA, and are again, re-testing those levels on the pull back.   Note also how the Cubes’ oscillators have also turned down in response to this pullback?   

I expect the S&P 500 to follow its more ADD-HDAD tech-nerd brother in the same fashion over this next week.    And I believe the Cubes behaviour (sic) will continue to act as a “tell” for our overall market as well, so let’s keep a gimlet eye on both charts for the return of the bear, which I have no doubt is only on torturous hiatus here, and will be back soon to set fire to both young and old alike.     

Until then, peace be unto you and yours.

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UPDATE:  Covered 60% of my TSO June 17.50 short calls @ 0.70 ($0.52 profit), Bot 10k PLLL @ 2.15 – 2.20, bot 10k SVA @ 2.73- 2.75 (hat tip to Caveman Forecaster – post found here ).

Caveat:  If you choose to put on any of these trades there’s ample chance your wife will force you to live in a cave until early winter, and you could lose money, quickly.

UPDATE:  Bot 2k ELN @ 7.33 (hat tip to CA and RC’s  Circus of the Stars)

Caveat:  If you buy ELN at this juncture, and Irish drug addict could decamp on your front stoop, warbling “Black Velvet Band” til all hours of the morning and putting off your cats, AND you may lose money.

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UPDATE:  Bot another 2k  of SLW @ 8.62 .  Acorns for a rainy day, see caveats above.

 

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Cadged from WFMU.org with my thanks.

 Twenty-Four Reasons to hope for a stock market crash in the new millennium
By Dave Mandl
Art by Bob Piersanti

 

Cheap TriBeCa real estate

No more discussions of the NASDAQ on sports call-in shows

Twenty-three-year-old former wunderkind founder of The Globe.com arrested for beating up a transvestite in West Hollywood

No more damn books about Warren Buffett

Startling revelation: Microsoft is no more than a slave labor camp for twenty-year-old white kids that sells hideously bad software at criminal prices; Bill Gates is a pudgy, semi-autistic dweeb whose mother still dresses him

Cheap SUVs

Eighty percent of the world’s biggest assholes stranded in the Hamptons without carfare to return to New York (Note: requires summer crash)

No more articles on investing in Family Circle, Allure, Entertainment Weekly, or Car & Driver Magazine

Computer programmers stop dressing like Oscar Wilde and dating supermodels, go back to watching Deep Space Nine and eating Munchos like they’re supposed to

Every day is sale day at Barney’s

Born-again day-trading “genius” Barbra Streisand and her evil sidekick Donna Karan lose it all

Inane commodity-prices ticker at Shea replaced with Jerry Koozman monument

Price of Trump Hotels stock actually falls below zero

So long forever to Smart Money, Upside, Worth, Fast Company, and Cigar Aficionado; more room on newsstands for SweeTarts

Parade of TV market pundits swear they’ve been 80% in cash all along

New York magazine special issue: “Staten Island: The Undiscovered Gem in New York Bay”

CNBC Market Babe Maria Bartiromo back working in Nellie’s Pizza on Bay Ridge Avenue

Online brokerage firm E-Trade, its stock price under intense pressure, branches into dry-cleaning business

Web-page-designers begin to lie when asked what they do for a living

Re-emergence of OTB as a viable gambling venue

No reservations necessary at Nobu, even on Saturday night

Federal government drops its proposal to invest Social Security funds in stocks, decides to put the money in a huge stamp collection instead

Amazon.com stock certificates replace Pokemon cards as latest kids’ trading craze

Top-rated TV game show: Who Wants to Win a Roll of Quarters?

(Highlights mine.)

Will attempt to get a weekend update up about the S&P and the Jacksonians between wedding festivities.  Silver and gold and their miners still looking very stable here, which is important.  Ciao* for now.

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* (in a good way)

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