Box Wine Find

(Actual Photo Taken At Le Docteur’s House)

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My apologies, as I’d meant to post this chart last week, but was just buried with work and transmission troubles from various hotels.

Anyway,  as you can see in this chart, AAU, or Almaden Minerals (“we’ll sell no cheap wine before it’s time”) is still in “buyable” territory, hence my decision to roll this one out, albeit a little late.    You’ll note where I was looking for the “all in” spot, and we didn’t quite get there last week, which is a testament to the resiliancy of these PM markets.

But as you can see, we are close to the “buy the break of” point as well.  I may even amend that recommendation and tell you to purchase the break of the 50 day EMA, which is approximately $3.90. 

If you are the nervous sort, you might want to toe in today, with maybe a quarter sized position, and if we get a break of the 50-day, add a half.  You can follow up with the final quarter on the break of the consolidation zone as demarcated above.

Of course, if  you do any of that, your youngest daughter’s eyes will probably cross permanently, rendering her “unmarriageable” for life, and  you may lose money.

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Sure I was away much last week. The same may be true this week.

Does it matter?  I would argue, “no.”

Have I not steeled you for the inevitable g-forces that have tugged at your innards?  Have I not prepared you for the hurricanoes of doubt amidst the gamed speculations?

Well, here’s the test. Those of you who gobbled some gifts up last week (even in my exigent condition, road bound and weary, I grabbed 120 SLW June $35 calls under $7.00), will profit this week.

Those of you who did not will likely dilly and dally some more this week, as that, it seems, is your nature. To your great chagrin, I might add.

Let this be a test then. How many of you have “taken” to the samurai training offered here lo these many months? How many are still trying to play the butterfly’s game?

Pax vobiscum.

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

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We’re getting into the gambling season, boys and girls.  Not just the annual March Madness, which is pure nirvana for we college hoop fans, but we’re also starting to talk Derby Prep racing, and even some golf course skins.

What better time, then to start pushing “all in” while everyone else is scurrying under rocks and diving for cover?  Listen, I have friends in Japan, people I went to school with, so I don’t mean to disregard this great tragedy, or diminish it’s human impact.  But if you think the market is turning because of Japan, or becase of Wacky Quadaffi, or for any other exogenous reason, you need to start thinking about a good index fund, and maybe concentrating on your brackets.

Listen close, as this may be one of the last few times you’re blessed with the benefit of my counsel.   You have very little time left to get your portfolio right, and I’m a very busy, busy man.   You’ve been running around, like a man in a wifebeater tee shirt with an insane clown posse tatto on your right shoulder, and you’ve been buying “the hot thing,”  “the sexy thing,” and let’s face it, “the easy thing.”  This game is not meant to be easy.  It’s meant to be a bare nekkid, blind folded race through a maze full of knee-high bear traps snapping away at your bag.

It’s time to stop screwing around.  This market is very close to getting that last bit of string pushed out, and you are better off closing out all your positions and going to cash like Scottie than continuing to chase every fleeting fancy sparkler in these latter waning days.

Needless to say, I’m not going to cash, though I did raise some today.  How?  By selling out the remainder of my non-PM, non-core plays.   I made the exception by keeping a little bit of hedged MON and UPS, but everything else that does not glitter or end up in the tank of my car is now gone.   And even my earl plays are very minimal.  I’ve got a little bit of ERX and a little bit of PBR and a smidgeon remaining of OXY.   Everything else — gone.

I will likely take some of that cash and use it for some additional leverage, probably for in-the-money calls on GDX, GDXJ and SLW.   These are more liquid PM option plays, and I don’t plan to be in them very long, but I will know when to climb into them.  It will be when the hammer below breaks through the glass flooring that has become so brittle… so brittle:

Print this page out, tape it to the top of your moniter, and refer to it frequently whenever you get the urge to purchase something frivolously. 

My best to you all, really.

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[youtube:http://www.youtube.com/watch?v=Gi1WXYHHc2s 450 300]

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Welcome to the other side of the Catherine Wheel that is this current Precious Metal Bull Market.   This is the side that crushes your limbs and threads your guts around a spindle-rod of molten steel.  This is the side that dares you to jump to end the pain.

Seems a long way from last week, doesn’t it — when airy elation suffused your soul as a result of of daily 6-10% moves northward in your positions.   You felt inner calm, you felt invincible peace.  You  priced Gulfstreams  650’s from your cubicle.  You went out and were fitted for a new flowing robe of purest white ermine, with matching albino alligator sandals.   ‘Fess up!

Well, get used to this queasy sea-change, ladies and gents, this is The Life of the PM Investor.   Not everyone is cut out for it, as it takes a modicum of steeliness and cement-headed self-assurity.  We are dealing with extremely volatile chemicals here, and it is only our good fortune that in this particular cycle they so often explode upward, instead of directly into our face.

The main tenet I’ve learned from this almost decade long period is that these things are almost impossible to trade, save at very extreme cycle beginnings and endings, which we will attempt to identify.  Therefore, if you want to attempt to trade, I would advise keeping a “happy pile” of perhaps 15-20% of your stash, and using it to try to add to your more significant long term investment pile — your “treasure pile”  for want of a better term.

Today’s move was unnerving, and unsettling.   The good news is, we are quickly advancing to oversold on the major index — the Amex Gold Bugs Index, or $HUI, which I use as a guide for entry purposes.   As you can see from this daily, we are perhaps a day or two away from a bottoming indication, as illustrated by the RSI stochastic:

We are also approaching support at the $535 level, which you may remember offered considerable resistance some weeks back.   Now it should serve as a brake on our descent, just as it acted as an intransigent lid in the past.

Another indicator I watch closely in exigent periods like this is the U.S. dollar.   It too is approaching a critical point in the RSI reading, this time on the overbought side.   It looks like it will be very difficult for the dollar to break through $78, at least in the near term.   You will note that that level also coincides with the dollar’s 50-day EMA, which has served as a resistance level in the past.

Dollars will print, my friends, until the Bernank thinks we are out of the deflationary woods.  There are already too many out there, but no matter.   Hang on, my various Sloopies.

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As we enter the season of the Fisher of Men, I’ll humbly advance a fisherman’s theme this night. 

This is a time of nervousness and possible discord in the markets and in the civil society.   Revenue strictures have led to a fraying of the social contract, and the casual derision many aim at the government bureaucracy has curdled to something more angry.   It’s tough to watch state employees rioting about having to pay a portion of their health benefits when real unemployment levels hover in the double digits.

Maybe this is a good time to repent?

In any case, this is certainly a decent time to make like a fisherman on the Sea of Galilee and throw out one’s net for certain gold and silver plays that you’ve perhaps let slip in the past.   You are familiar with the number of headliners that I’ve chosen to lead my portfolio and I won’t bother repeating them here.  Any number of them are available on sale right now, and I continue to believe the silvers will remain the leaders, but tonight I’ve decided to illustrate one of my favorite gold picks.  

I think there’s a relatively easy buy point here, provided there’s not some sea change in either the dollar’s direction, or the overall market.  Behold:

How fortunate we are to be able to cast out our nets in such waters and bring up large gaping lunkers! 

Mazel tov.

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[youtube:http://www.youtube.com/watch?v=2m2FIQzal9U&feature=related]

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The knock-out makes the fighter a star, but there’s a lot of steps leading up to the fatal punch, that money maker.   It all starts with foot-work.  Ali had the greatest footwork this side of Sugar Ray Robinson, and he defined footwork as a defensive weapon in the famous rope-a-dope strategy, that combined an amorphous passive-aggressive upper body roll with a sly shuffle-dance against the ropes that literally sucked the power from the brutish giant, George Foreman, on that signature humid night in Zaire.

I advocate a similar strategy to assist in absorbing the brutal retaliatory flurries that will inevitably arise from this tidal bull we presently enjoy.  Roll with the punches.  Bleed some shares if you must — 10%, maybe even 20%.    I would not go beyond 30% at this juncture, however.   Keeping cash on hand is one thing, keeping too much of the nasty stuff and missing the rocket launch that is coming is another.

I hope this post will be timely, if in fact today’s hesitation leads to something more stomach churning.  Most important is that you do not lose your focus while the roller coaster whips you about.  

In the end, you must ask yourself the rational question:  Has any single component or fact set changed in the paper money destruction thesis?   If not, you must carry on to the predictable end.

Hint — We’re not there yet. 

EXK, SLW, PAAS, MVG on silver.   IAG and ANV and RGLD on gold.  AAU and NGD and PGZ are for your higher risk plays.  All of these on the expected dips in the next few days.

Pax.

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