Hippies Buying Gold?

________________________

Listen, I’m willing to give just about anybody the benefit of the doubt.  There are tonnes (sic) of confused posters on this site, as evidenced by the  jumbled and disjointed list of demands, points of order and general temper tantrums archived on Monsieur Le Fly’s two “discussion posts” this weekend.   Some of them offer contradictory recommendations, seeming to hate the government-banking cabal that’s all but run this country since the turn of the 20th century, but then recommending an even stronger government regime to take it’s place.

Folks, this is replacing the loan shark with the prison warden.  I agree that we need to break the cycle of supported failure that crescendoed upon us in late 2008, but 2000 page bills from “friendly” members of Congress do nothing but cement that cycle.  The first thing you need to do is force the banks to stand on their own.    If that means forcing a complete separation from the Fed– which was the original intent — then so be it.  If the Fed wants to “rescue” one of its lender institutions, let it do so without our tax dollar.

I am convinced, as you know, that we did nothing but “kick the can down the road” in 2008, and that TARP and all of these other remedies are doing nothing but setting us up for another voluminous group of failures.   This is because we let the same cronies that supported the massively corrupt Fannie Mae and Freddie Mac write the “reform” bills that instituted a system where mega-banks, those egregious leviathans, can be bailed out, ad infinitum, by you and I, rather than allowed to fail or break up as normal businesses that fail must do.

There were many silly (and frankly, Marxist) definitions of capitalism promulgated on these board this weekend, but the worst were those that associated capitalism with this recent spate of bailouts.  If capitalism is about anything, it’s about the creative destruction of old forms in order to allow innovation to drive progress forward.

This betrayal of true capitalism  is why the recent bailouts of dinosaurs like AIG and GM and Chrysler were so pernicious.   The breakup of GM would have freed billions of dollars in contract-bound assets and quite possibly sparked a whole new revolution in disaggregated auto manufacturing.  Allowing AIG to dispense its well-deserved CDS losses to Goldman Sachs may have hurt Uncle Warren a bit in his pinchy pockets, but think of the logjam in the wealth managment business such action would have broken up.

Think about it — AB Bernstein is probably one of the most respected names in money managment.  They are also the chief competitor in private banking to Goldman Sachs, in terms of research and institutional managment.   Why should they be penalized because they did the right thing?

It’s the wrong thing that it worked out that way, and one need not be a hippy despoiling a small park to realize that.

My argument with (many of) the hippies is that asking for more government to “regulate” such nonsense is just asking for more trouble.    Believe the fact that the large banks own Congress right now, and there single aim is to be dominant to the point where smaller banks are irrelevant annoyances.  Believe also that this aligns with Congress’s aims as well.  Why have to stretch your hand out to thousands of contributors when you can keep it to a neat and tidy ten or so?

Think about it.  The only way to break the cycle is to take the power to “Stick-Save” out of Congress’s hands.  Allow businesses to fail and you will create a stronger business arena from which to compete.  That’s real capitalism, and that’s what’s best for everyone — to whatever percentage they  might subscribe.

_________________

I’m thinking the hippies may be buying gold here, however because I’m seeing some interesting formations in the weekly charts.   Take a look at our friend the double gold bull ETF,  DGP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Note how our price maintained support at those two key support lines over the last three weeks?  That’s a good sign.   The amount of room left in the stochastics also tells me that this run is not over.   What’s more, our stop loss line is pretty clearly demarcated here.

You can see the same action in a more exacting stand alone stock, the famous ANVil of ANV.  As capricious as this stock is known to be, it also seems to be adhering to the same rule of law that DGP has been.

My best to you all in these harrowing times.

___________________

Comments »

[youtube:http://www.youtube.com/watch?v=7WZ33w3B8Hw&feature=related 450 300]

_____________________________

I hope you took Frankie’s advice last night.  When I went to bed last evening (I had an exhausting day), there were enough people wandering the iBankCoin desert wearing hairshirts and declaring the coming of Armegeddon that I thought I’d wandered into a particularly ascetic strain of the Stinkify Wall Street protest movement. 

But I put my faith in the machinations of the Great Machine — The PPT, more than I do the easily beclouded emotions of my fellow piker traders.  You see the Great Machine runs on blood of cold nanobytes and young trader stem cells.  It cares not for your fears and your worries any more than it feels like patting you on the back in your more elated or expansive periods. 

It feels nothing but the data.  And what’s curious about yesterday’s readings was not that we came off over “overbought” levels, but that The PPT “leveled off” at a certain point yesterday, and held fast over a period of increasing trader nervousness here and across the internets.   It certainly gained my attention.  Were you watching?

And that fastness in the mind of the Machine was telling us something.  Just as Timmah and his group of Eterno-Bears were rubbing their fat little paws together in anticipation of a plump pic-a-nic basket, the titanium hand of The PPT was wheeling back to strike a sharp blow to their tender snouts.  

Not so fast, little Bears… did you think it was really going to be this easy?

And truthfully, if we look at our long term signals, there’s not a lot indicating much of a correction in store.   For example, you think the Big Boys maybe had an idea about what GOOG was going to do?   Have a look at the $NDX weekly for a clue… It’s launched this week off both up-turning primary EMA’s, the 13 and the 34 week exponential moving averages.  It’s also got a lot of room to go on teh RSI and slow stochastics before it’s overbought. 

When the techs are that lively, it’s often a sign that the bull is not done goring his fat brother bear.   Perhaps this weekend I will extrapolate, if you so desire.

In the meantime, I still hold one last third of my QLD position, which I may have been too hasty to sell (but I had a plan to sell at $86, and one must stick to one’s plan, no?).  I also still hold a  small postition in SKF, which I will hold to as a hedge, through the rest of this roller coaster ride.

I also kept all my gold and silver positions, as they showed similar resiliance — that stickiness — that The PPT showed yesterday.   Also PPT related, the silver ETF went “oversold” ridiculously early yesterday.  That often portends a shallowness in the market that will soon be reversed.

Pay attention to sentiment, folks, but above all consult The Machine in these bear-colored times.   It will guide your hand and let you sleep at night.

Best to you all.

_____________________

Comments »

[youtube:http://www.youtube.com/watch?v=rI6-JzxV-_M&NR=1 450 300]

Plantation Boss Liberals’ Response Seems Less Than Pleased

_________________________

According to a new NBC/Wall Street Journal poll released tonight, Herman Cain now leads the GOP field with a 27% share of the vote, with Governor Mitt Romney pulling second at 23% , and helmet headed Rick Perry falling from 38% last month in the same poll to 16%  in this latest effort.

I would say that Perry turkey is cooked, and its time to move on to the only man with a computer science degree and an MBA in the field.   A man with a plan (no matter how flawed) to limit the claims of the federal government on the capitalist incentive system that made this country great.  A man who has worked his whole life — in every trade from digging ditches to running multimillion dollar revenue companies.

And maybe most important, Herman Cain is comfortable in his own skin — without having to repair to it as his designated aegis or truncheon.   What a refreshing concept!  Good luck Hermanator!

___________________________________

And please, just stop with the Mitt Romney stuff already.  He’s the establishment candidate in the best traditions of other past fatted calf candidates, like Bob Dole and John McCain.  While I have great respect for Mitt’s operational background and vast business success, I cannot vote (in the primaries at least) for a guy who continues to back his moves in creating Romneycare, along with all the baggage attendant in that decision.

The voting public hungers for a conservative once again.   Herman Cain is thus far the only conservative candidate with the personality, wits and contacts to win the long race to the White House.

________________________________________________

I did get rid of the bulk of my QLD today, as reported in The PPT, but did little else.  I had a rather mammoth  order in all day for rare metal play QRM, but to no avail.  Luckily I already own a small horde of the name, but I was looking to add on a pullback today, to no avail.  I believe it ended up over 14% for the day.  I will continue my intense observations.

I continue to stalk select names in the rare earth (AVL)  and precious metal field (SLW, AG, EXK, RGLD, ANV),  even as this rally gets long in the tooth.  In the meantime I am also selling down some winners.  Not just QLD, but ARO and some other names that have gathered some moss.

Best to you all and to this blessed and still great country.  May she choose wisely.

_______________________

 

 

Comments »

[youtube:http://www.youtube.com/watch?v=UTduy7Qkvk8 450 300]

__________________________________

We may get a pullback here, or we may push right through to my target of $1227 on the $SPX.   As usual, the Trannies ($TRAN)  or “Transports” if you want to be “Charles Dow Formal,” will give us an idea of where the market is headed early on.

The following weekly,  has some good news and some troubling news.  The main positive appears to be that the Trannies, like the previously featured $SPX weekly,  have based on the long term 61.8% golden ratio level.  This is an extremely strong level of support, and we are headed up off of it, and over the 200-week EMA:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The not so appealing news is that we are beneath the 13-week and 34-week EMAs are above us, and we came up just short of the that first line today.   That may mean we are in for some further consolidation here.

If that is the case, and we drop back down to that 61.8% fib one last time, I will be loading up on my favorite “Eddie Izzard stock” — UPS.

As for today, I did nothing, thought I thought about grabbing some more SLW at “end of day.”  I just didn’t get back in time to do so.  Sorry.

Best to you all.

_________________________

 

Comments »

[youtube:http://www.youtube.com/watch?v=IA8QrOAghZ0 450 300]

___________________________________

I started selling some of my QLD horde today, only to turn around and plow those winnings into more AG, SLW and EXK.

Why silver?  Mostly because the happy silver mining family was bludgeoned like a prize veal on the night before the St. Anthony Festival these last few weeks, and I like the reversion to the mean theory — no matter how temporary that reversion might be.

You know I started accumulating the PM ETF’s,  GDX, GDXJ and SIL last week in order to capture some of the rebound that I saw coming from that sector.  Well this week I will concentrate more on individual names like the above in silver and RGLD, AUY and ANV in the gold mining sector.  I might also dabble in those insane brothers XG and XRA.

Just to give you an example of what I’m seeing here, and why I think there’s still a lot of room in these PM names, here’s my markup of the EXK weekly.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Note how last week the price bounced off the long term trend line only to leave that long tail in a hammer?  And note also how most of the stochastics are headed north once again?  I am seeing that in a lot of these names.   Again, it can all change on a dime in no time, and believe me, I will be ahead of you, elbowing you in the chin as I run for the exits if it does.   But right now, the dollar is on our side, and the momentum is coming back to these names.

Let’s have some fun while we wait for the deluge, shall we?

Best to you all.

________________________________________________

Comments »

[youtube:http://www.youtube.com/watch?v=BD5nG2jEVgc&feature=related 450 300]

________________________________

The Futures markets in both stocks and commodities is telling us we’re in store for a candy-coated day tomorrow in the markets, all Yom Kippur expiations aside.   Many a times I’ve heard “Sell on The (Jewish) New Year and buy back on Yom Kippur” as tradition dictated that many of our Tribal brethren would be out of the market for that week.

I think that may be a bit of an old fashioned play (not many of my Hebraic trader pals took off for the entire week of “the Holidays” and Yom Kippur fell on Saturday this year anyway), but it’s still useful as a historical marker and perhaps an “excuse” for people to come out guns a blazing on that first day after All Sins Have Been Elided.

What better time to start stacking venalities up again for next year, nu?

Coincidentally or not, the current bullish outlook for the market synchs with some longer term market work I was updating this weekend.  For instance, this following SPX chart looks at the Fibonacci levels of the last four years, beginning with the October highs of 2007 as “the high Fib” and the March lows of 2009 as “the low Fib.”

Note how we launched all the way back to the 61.8% retrace in April ’10,  before selling off hard to the 38.2% fib line in July of that same year?  Then we had one more run to 61.8% before retracing briefly once more and finally breaking the bonds of the golden ratio (again, 61.8%) in November of ’10.

Note however, that we never bounced all the way back to the October ’07 highs?  That’s because we’re in a bear market cycle, my skepticons, and the bad news is we ain’t done yet.

But that doesn’t mean we can’t still have fun times, even if they grow increasingly scantier, right?  So let’s look at where this current selloff has based since this summer shall we?  Well, I’ll be kippered (no Hebrew) if it isn’t the 50% fib line providing support!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

And I think that given the current position of the weekly stochastics (i.e., “oversold”), we will likely get a nice “Euroliquidity” blast here, quite possibly taking us all the back to that 61.8% golden ratio one last time at $1227 on the above chart.

As a result, I plan to continue with my large QLD position and perhaps even “enhance” it with a little TNA, here.  I will skinny my SKFlles to a mere nominal position as I still do not trust the banks, but will also eschew all other negative-minded ETF’s for now.  I will likely also continue adding back to my silver and gold miner hordes, mostly through GDX, GDXJ and SIL, with opportunistic forays into SLW, EXK, AG and RGLD.

I reserve the right to change this direction on the turn of a dime, however, if things do not play out as Signor Fibonacci has directed.

In addition, later this week, I will attenuate this chart so you can see some more specific targets for the upcoming “deluge.”  And yes, folks, it’s still coming.  And time is growing short.

My best to you all.

________________________________________

 

 

Comments »