iBankCoin
Joined Apr 19, 2009
721 Blog Posts

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The Paws that Refreshes?

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Are you kidding me?  Do you really think you can beat the printing presses, Mr. Bearshitter?

I’ll have you know Benjamin J. “Inky Hands” Bernanke has the fastest printing presses this side of the New York Times, albeit sans the egregious liberal editorial slant.

No, no, Benjamin B.  is tres efficient, as he does not even have to consort with learing Thomas Jefferson’s $2 bill.  His only mandate — keep the river of Washingtons, Lincolns, Hamiltons, Jacksons, Grants and Benjamin Franklins flowing to the far corners of the globe in exchange for chintzilly made novelty aprons and Irish crystal.

Our mandate, however, is to scoop as much of that flow as remotely possible, and convert it into hard assets, bunker-builder style.   Gold.  Silver.  Platinum.

Enjoy this rebound, friends.  There may be much more to it.  Personally, I see the dollar — [[UUP]] starting to wear down here, and drop precipitously.   Soon it will well on it’s way to continue it’s long term downtrend.  That should boost stocks no end.

Just remember, it’s an artificial boost, and those equities are just not worth what you thought they were.   Don’t become wed to a name, unless you plan to hold it for the duration.  Duration, in this case is more than 10 years.

Only [[UPS]] and [[MON]] fit that description for me.   I even expect the golds ([[GDX]], [[RGLD]], [[ANV]]) and silvers ([[SLW]], [[PAAS]] and [[EXK]]) to die off sooner than those two.

I also like [[EGO]] and [[IAG]] here.  Attend!

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Operational Leverage

 operation

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I’ll be quick tonight with two illustrations which should show why I’m in (mostly) miners rather than physical gold or its paper substitute, the [[GLD]] ETF. 

First, I think we can agree we’ve been in, and we remain in, a secular bull for the precious metals, as this monthly chart on the price of gold illustrates:

Note the four times price appreciation over the eight plus years?   Not bad, huh?  Well, let’s look at the miners over that same period.  Remember, they benefit from what we call “operation leverage,” which means that in a rising price environment, they can leverage their fixed costs and really ramp profitability quickly.

Note the effect in our [[$HUI]] monthly chart:

Note the shorter time period and the far steeper gains?  Note also that the miners have yet to catch up to the recent new highs in gold.   I believe that time is coming soon, and may even be upon us as the dollar approaches a crucial double top area.  

More on that as it develops.   My best to you and your own personal operating levers.

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Unforgiven

[youtube:http://www.youtube.com/watch?v=78CM3oItu1U 450 300]

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This bear ain’t over yet.   It’s in hibernation still, even here in late May.

here in early spring-summer.  One secular bull is still wide awake, however…

The [[XRA]] chart is an example of what some of the recovering juniors have been doing.  Check it:

I think this is only prelude.  The money machines are flowing.   Attend.

Good evening, all.

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Happy Bert’s Day, Monsieur!

bert

From Your Biggest Fan!
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Bon soir, mon ami, et Bon Anniversaire! I hope this evening finds you croque’d to the gills on your favourite Bordeaux or Gamay Beaujolais, if you will.

For my part, I intend to eat multiple sandwiches tomorrow in your honour (sic), as it seems like we may have to withstand another drawdown if this afternoon’s last minute plummet and tonight’s weak futures review hold course.

On the good news front, [[GLD]] and [[SLV]] hung on and look to be bouncing with more relative strength than the rest of the market. Some previously beaten down junior minors looked like heroe as well, including [[XRA]], [[GSS]], [[NGD]], [[FRG]] and my favourite, [[ANV]].   Note how ANV kept that uptrend intact on the weekly:

THe daily is less pretty, but still hanging in there:

Keep your eye on the quality, and on that weekly chart.  If we break that line, we will likely see further consolidation.  Right now, both gold and silver are higher even as stock futures look weak.   At some point we will likely see complete separation in trading behaviour.

Best to you all, mes amis.

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Golden Doom?

spacegold 

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I think some of the calls for gold’s downfall I’ve been seeing coming out of the Deflationista Community may be a mite premature.   As a matter of fact, I don’t think we’re seeing anything here more than a sharp pullback from an extended four week move.   Given that the move was a breakout, however, I think we’re headed for continued gains after it’s been consolidated.  

First, the weekly gold chart shows where we we’ve come since the breakout from the larger consolidation in October of 2009:

What we’ve been seeing for the majority of 2010 has been a consolidation of that late 2009 breakout… until we just recently (over the last four weeks) began to break out of that consolidation as well.   This last week was merely pullback from that break as well.  Note the daily:

Now we are oversold even from that brief pullback.  This is not to say there won’t be additional consolidation, but only that we should not confuse the ill health of the overall cyclical stock market bull with the far better condition of the continuing secular bull in gold.

Enjoy the day, I shall be about, but busy.

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Pressing Pulp

pulp comics

Lost My Shirt, Danglin’ by a Thread… Still Got the Girl, For Now

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Just a little bit longer, now I think.

I told you I took advantage of the Bollinger Band crash trade  (thanks for teaching me this, Gary) today when I purchased some kookie SPY calls at 1082, yes?   Well, you can see how that worked out.  But then, these crash trades almost never work out right away, even though they seem to work out over 90% of the time, in the more intermediate-run.  

Point is,  I think we’re pretty close to a bounce,  where I will GTFO of those calls, and hopefully back into some nice dry gold lame suits.

The gold market seems to be holding up okay, and that Allied Nevada Gold Corp. [[ANV]] weekly chart I showed you yesterday is still holding that trend line, if only barely.   The $HUI index also looks  like it’s ready to finish it’s plunge here as well.   Maybe just a little bit more on the daily, here:

Oversold on the RSI, and the stochs are not far behind.   I think the touch and go will coincide with the rest of the market, maybe as early as tomorrow.  Here’s the weekly for perspective:

Still like the bigs, including Goldcorp Inc. (USA) [[GG]] , [[GDX]] and Royal Gold, Inc. [[RGLD]] here, but also Allied Nevada Gold Corp. [[ANV]] , Eldorado Gold Corporation (USA) [[EGO]] and IAMGOLD Corporation (USA) [[IAG]] .    On the silver, [[MVG]] seems to be holding up well.   [[EXK]] took a big dump, as the small caps will do, but I think it’s a bargain hunter opportunity.  Silver Wheaton Corp. (USA) [[SLW]] remains your best buy in the silver sector.

Step slowly, if at all, and I will see you all tomorrow, God willing.

PS — The PPT has been invaluable the past few days.   Fly has been on fire, and he’s even more available and open about his strategy there, away from the leeches.   It’d be well worth giving it a whirl for the summer, I tell you.

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