Insufficiently Respirating Kitty

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Welcome to your dead cat bounce, dollar bulls!  Thanks to manic Japanese Central Bankers, the dollar index is soaring this evening.   Don’t underestimate these deadly serious Nipponese, they know where their bread is buttered.  It’s on the export toast of their choosing, hopefully in the form of Sonys, Toyotas and Nintendo Wiis for your flabby American children.  And for that reason they will try to cheapen the Yen as much as physically possible against the gossamer U.S. buck, which is being issued like so much Greek toilet paper to the free world, in the off chance that it might absorb some of the debt poison that’s infected the globe.

Quite a trick for the Japanese, no? Their problem is that, although a debtor nation,like their profligate friends in America, their debt is largely held “in house” by a large group of Japanese washerwomen who wouldn’t think of selling their .01% returning Japanese postal bonds, lest the Emperor be shamed and have to silence the lot of them, bushido-style.

As an aside, this reminds me of when I was getting my MBA in New England in the 90’s.  We had about 20 Japanese (bankers, mostly) students who were being paid to attend my school.  At the time, the Yen was trading at 88 to the dollar.  Geezus did those fuckers live high on the hog!  In between swilling copious amounts of bourbon (you trying to land a Japanese client? Bring mucho Makers Mark), they would go on egregious trips to Egypt and Malaysia, and wherever fuck all they wanted to go — usually with their wives (they were almost all married).  Meanwhile, poor American dopes like myself spent the rest of our bonuses on tuition and textbooks, usually racking up some serious debt along the way.  Sure a couple of us were lucky enough to get our tuition’s paid for as well, but no one got paid like these Japanese dudes.

Meanwhile, today the Yen is trading at about 75 to the dollar (79 as of tonight’s intervention).  Gives you some pause doesn’t it?  Screw “Occupy Wall Street” — those fuckers are losing their jobs.  Howabout “Occupy the Dartmouth Green/Harvard Square/U Penn Quad?”  Let’s get some back from these Japanese MBA blighters who can now afford to take at least a dozen hippies out for sushi a night.

That is, if they haven’t left for Cairo on Fall Break already…

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Listen up, something’s going on.  I had — no joke — one of the most prolific weeks of my life last week.  I’ve been working all weekend.  When I get done with this, I’ve a book to mark up.  I may get a sliver of sleep tonight — Dangerous Monsieur le Docteur-style.

What caused everyone and his uncle to decide to pull the trigger last week?  Was it some sort of manic Golden Ratio confluence ?  I don’t know, but I am right now busier than a Jehovah’s Witness at an atheistic pimping conference.   I will try to attend to you, I promise, and please, forward as many questions as you can through the comments section.  One warning — I will be out of the country starting Thursday and through about Tuesday of the following week.  I will try to log on and give you updates as best I can.  No promises, however.

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Here’s the deal.  The dollar is bouncing and I guess we should expect that.   Do we drive back above $76.20 or so, and thereby violate the breakdown of last week?  I really don’t think so, but we should be prepared for volatility here.  I think it’s important to get back into the PM’s here, even if we are in drawback mode.  From a monetary standpoint the world is getting nervous, and that leads me to believe in the commodities, especially silver and gold.

And you know I love miners, and I’ve noted a few.  Can I leave you with a high risk but potentially high reward junior that I’ve liked for some time?   BAA has been percolating for some time, and I thank my Democrat friend Teahouse for the recommendation of its monthly chart… If there’s one thing a longer term chart will give you, it’s perspective.

Here’s what I think is the play on BAA, but feel free to choose any of your favorite under-$5 juniors (AAU for example) for similar analyses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

My best to you all this week.

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(This Car’s body and frame are made from Carbon)
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I know I’ve been waxing poetic about the bounties of raw commodity gold and silver plays, and gosh knows AGQ, MVG, AG, EXK and SLW all performed mightily today, as did ANV and IVN on the gold side (among many others).  However,  I would counsel you also that there’s a whole wide word out there from which to choose.   Make no mistake, the European crisis is not going to be over with the waving of a magic juju stick that makes every price legitimate and no bank under pressure for insolvency.  Call it what you might, but this bailout is simply kicking the can down the considerably strung out road by tossing more money at poor Greek monkey grinders who will only convert it to a lamp shade or a fancy brooch.

That means inflation.

That means all commodities will be in play.  Let’s have some fun, shall we?  Indulge me.   Old favorite (and Jacksonian) beat down TCK was roaring like a Bengal tiger caught in an escalator, up over 10%.   TC — the molybdenum favorite and also Jacksonian was up 7.25%, and even my favorite WNR was fully erect today, adding a cool 9.5%.

But here’s that long developing carbon play I threw at you some months back — CCC.  Remember that monthly chart?  The one that showed that neat consolidating triangle?   Well, faith and begorrah, that triangle is still intact and still consolidating (much like AUY in the recent past).   And given that there are two days left in October, we might even have the pleasure of an actual breakout of some significance here:

Two days for a paradigm shift possibility.  Is that too long to wait?   I wouldn’t.

PS — I have another favorite PM play that has a beautiful monthly chart as well.  Perhaps I’ll share tomorrow sometime if you are pleasant.

 

Best to you all.

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Sit, Midas, Stay!
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I was away on business in outer Lobos Lobovia today (somewhere in the untracked wilds of the Midwest), when I received a cell phone text from my dog, Midas (above).   She’s been trained to faithfully call me whenever I’m away from the screen and there’s a significant opportunity in the precious metals… especially the miners.   She’s to do this no matter how busy I am, and mein gott have I been busy.   Still, she has her training… so…

“Roof!” She said, “roof, urf, roof!”   Loosely translated, this meant “buy MVG,” but that’s of little consequence when you could have bought anything in the PM sector today (save maybe PAAS) and you’d have made a crop of coin.  So who says dogs are smart, right?

Anyway, MVG was up 6% including after hours today.  AAU was up 12.7% today.  Guess what wasn’t up so much today?  If you said “BAA” you get a prize.  It was flat most of the day, only to trade up a shade under 3% in after hours.   Can you guess what I’m going to be buying tomorrow, time allowing?

My dog Midas knows.

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Again, my apologies for being away from you, friends.  It’s truly been one of the busiest weeks I’ve had since I was a gruntling analyst fresh out of my white shoe training program.  And shit, it’s only Wednesday.

That news in itself should be somewhat indicative to you.  Money is moving people, on both sides of the balance sheet.

Given this pace, I may not even make it to the weekend.   So if I don’t, let me share my outlook.  I think we should be aware we could be on the cusp of a cataclysmic move in the PM’s.   The dollar has broken that support at $76, and as I type it’s at $75.89 on the index.   Gold has responded, and is above $1700 again.  I think we’re on the way back up, and am cautiously adding to my piles as time allows.

Silver’s been something of a laggard, but I may take advantage of that by adding to my AG and EXK tomorrow.  If my readings are correct, we’ve still a ways to go in those names.   I may even indulge in some AGQ.  Juniors in the gold sector should also be considered.  Grab GDXJ if you don’t want to choose.   Take care, and I will try and drop in on you tomorrow.

Best to you all.

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I’m going to be out an about quite a bit this coming week and not even back in the office until Wednesday.  I’m sorry, I can’t help it if much of the Free World is determined to secure my services in the the final months of 2011 (it’s beginning to give me the willies, actually), but there it is.  People are agitated.  I– to put it clinically–  am an Expediter.  I specialize in expediting Agitations.

And there it is.

Luckily for you, the tenor of my argument hasn’t changed much, despite the rollicking good time the market gave us for OpEx.   Isn’t it odd how during bearish-leaning periods, we get bullish OpEx days, and then the exact opposite during bullish leaning periods?  Maybe I’m being overly anecdotal, like Jay Nordlinger on especially strong tea.    This is the feeling I’m getting in my gut, however, and its a feeling that shouldn’t be ignored.

Why?  Because I got the same feeling around this time in 2007, just before the SHTF… or to be more concise, just before the SHTF in slow motion for about a year, crescendoing at year end of 2008.

I’m getting that itchy feeling again.  And here’s the deal, the dollar could be, or could not be confirming that feeling.  How’s that for precision, eh?   Well when you look at my daily dollar chart, you’ll understand the provenance of my thinking:

See how oversold we are on the dollar at this point?  We really should bounce at that $76 line, maybe after a day or two.   It makes all the sense in the world.   But then there’s the fact that we’ve busted through the 200-day EMA, and in an almost “broken parabola” fashion.  It wouldn’t shock me to see us test the lows given the sharpness of that decline.

It doesn’t make much sense to me… the EURO should be crashing, not the dollar.  But who knows what’s really happening.  For all we know Bernanke is running the presses to wallpaper Angela Merkel’s boudoir even as Europe talks about QE3’ing their own combined fiat experiment.   Much is misdirection in the global race to devalue one’s currency, and I wouldn’t trust one of these spotted badgers as far as I could smell them.

So let’s not play the “speculation” game, but rather the “observation” one.  Let’s see if we get that expected bounce off $76 and let’s see if it lasts.   If it looks like the dollar will rise again, I will likely get out of what little I’ve left on the PM side, except for some very thin core positions, and I might even dabble in the opposite of QLD, our old friend QID, and of course, Mr. Skiffles.

But for now, the dollar still plummets, so let’s be nimble and continue to gather that grain for the winter.  Soon it will be time to sell grain, however, as there will be many hungry locusts knocking at the door.

Best to you all, I will try to check in on you as best I can.

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Earlier today, le Monsieur mentioned that he would he would soon be turning his baleful eye — Barad-dûr-style  –upon some key food and bevvy stocks that he thought might survive the upcoming economic apocalypse.   I thought that somewhat coincidental given a recent visit I’d made to a very specialized niche food business in lovely Colombus, Ohio.

Granted, for large scale exposure, I’ve been buying the Dutch giant Unlilever (UL), mostly for its broad (if bland) array of well known consumer products like Hellman’s Mayonnaise, Knorr Soups, Ben & Jerry’s ice cream, Lipton teas… and even Slim-Fast for phat phucks who might overindulge.   I also really like their dividend in this market — almost 4% as of today’s close, and 60 basis points higher than American rival Proctor & Gamble.

The large behemoth aside, the smaller niche food producer I really like is Lancaster Colony (LANC).  These guys have done it right and I guess I have to ascribe it to management.   About ten to fifteen years ago, they got knee deep in the “glass & candle trade” that was all the rage at the time, thanks to fake Pop Americana crap like “Yankee Candle Company.”   When that business went south after formally enjoying ridiculous margins for years, it crushed the stock over a two year period (1998-2000).   But I have to hand it to LANC‘s management — they got back into the food business in a big way, and now own some of America’s most iconic niche brands, including Sister Schubert dinner rolls and Marzetti salad dressing and sauces, Texas Toast under the “N.Y.” brand.  This weekly chart shows how it’s been very strong on a relative strength basis, and how close also we are to a break out:

 

LANC is also another solid dividend play, with continuous dividends paid or increased since the mid-60’s.    Keep an eye on the $64 mark… if we break from there, it’s off to the races for LANC.   And well deserved.  It’s just a nicely run “under the radar screen” play that will continue to pick up niche brands where they will hold dominant market share.  Dominant market share means pricing power and steady growth.   What more could a citizen ask for in these uncertain times?  Besides, if things get really bad, we’ll all be eating their tasty croutons (yes, they’ve dominant share in that market too).

Bon appetit!

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Loopy misguided hippies aside, you know it’s a crazy world out there, when even the closest brother quarrels to the death with his brother, Cain and Abel-style.  Soon enough, there will be dogs living with cats, and hippies trampled into dust by Mayor Bloomberg’s horsemen.  All around us will reign confusion and despair.

Luckily, there are still some things we can rely on.  The return of parachute pants within the next three years, Kim Kardashian’s made for TV divorce, a Texas win in the World Series … and Skiffles (SFK)  on the bounce.  Lookee here, son:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note that we’ve already started seeing bank numbers from Schittybank, JP Morgue and Wells Fargoff— numbers that are less than picturesque… did you believe you’d see otherwise?   Did you also believe that this present imbroglio in Europe was going to end with a happy landing, with no brimstone-reeking dragons pulled out from beneath the four poster beds?  Do you really believe those patchouli hatted white rastafarians were going to leave Zuchinni Park without at least one projectile defenistration from the 55th floor of 85 Broad?

Think again, my brethren (and sistren).   It’s highly unlikely that the banks will be allowed to proceed from the Bastille any time soon, and if they do, it will likely be only for the purposes of lightening that awful burden upon their shoulders.

And so be it.   Know that the one thing you can rely on in the upcoming months, is that Skiffles will be with you, bouncing in its above-apportioned range, looking to shower you with profits.  Ladies and gentlemen, bring home a box of Skiffles today.

Best to you all.

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