[youtube:http://www.youtube.com/watch?v=ZfINBYmGD1A 450 300]

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I don’t often talk about the University of Kentucky on this site, being a “mostly” Louisville Cardinals fan (and they don’t like it much around here when you’re “both.”  You might as like to try to “borry” from a man’s still instead).   However, UK freshman, SEC “Player of the Year,” “Newcomer of the Year,” and quite possibly #1 NBA draft pick John Wall makes for a nice metaphor for today’s dollar discussion.

Wall, while deified in the Blue Grass for his eye-popping offensive talents, is going to be the number one (or #2, his teammate DeMarcus Cousins may go #1) draft pick because of his defensive capabilities, which are sometimes similarly eye-popping.   It’s arguable, for instance, that he beat Vanderbilt at Vanderbilt all by himself with a last second shot block on a dead-eye three-point shooter, followed by a clean pick of the ball right from said startled shooter’s hands.  

What’s that?  Of course Youtube has the clip!

[youtube:http://www.youtube.com/watch?v=EZzXhhd6CRA 450 300]

Pretty spiffy, no?   You don’t see that kind of instinctive defensive thinking in a lot of freshman.

And that kind of defensive, er… “wall” brings to mind our old weekly dollar chart and the “fib wall” we’d identified as going to be a tough area to breach.   It turns out, the 200-week exponential moving average (“EMA”) served as a barrier as well.   Look at the slow topping we’ve seen here, keeping in mind this is a weekly chart:

I think this bodes well, at least in the near term, for our commodities “risk trade,” and especially the precious metals, which are perking up quite nicely this morning as the dollar (DXY) drops below $80.00.    [[AGQ]] is taking all it’s friends out for a champagne party, and purchasing them Norma Kamali handbags.   Fellow silvers [[EXK]] , [[CDE]] and even rag-tag Hecla Mining Company [[HL]] are also again off to the races.  As always, the best name in silver is Silver Wheaton Corp. (USA) [[SLW]] .  On the gold side, you know my favourites (sic) but NovaGold Resources Inc. (USA) [[NG]] is really picking up steam as it matures here.

Keep an eye as well on our dollar proxy [[UUP]] , which we’d like to see stay below $23.60 for our shiny metal dominance to continue.

On top of our usual metal trades, it seems that the regional banks [[KRE]] are also back on thier horses.  You know I love BB&T Corporation BB&T Corporation [[BBT]] as a long term hold, but don’t be afraid to grab a little Fifth Third Bancorp [[FITB]] and Huntington Bancshares Incorporated [[HBAN]] here as these “Ohio chancres” will someday soon be able to cover up their cold sores and sashay out into the bank M&A saloons once again, all a-flooze.

Last, don’t forget about Elite Eight  pick Cree, Inc. [[CREE]] which is still getting its wind back (thankfully, so is SanDisk Corporation [[SNDK]] ) and it’s sister Veeco Instruments Inc. [[VECO]] , which has really been gaining some nice ground recently.   I like both as hedges against future “Inflato-rama Drama.”

My best to you all.

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Avast Ye Steam-punk Scalawags!
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Looks like the bewigged and wedge-shoed scarlet coats of the Federal Admiralty have thrown down their first frilly gauntlet and taken a shot across our portside bow last evening with a cannon-load of “hot grape” called “quarter point discount rate increase,” in the less civilized quarters of New Orleans and other pirate dens.

Powdered pooftahs that they are, they are already begging our mercy come the morn as we swing our starboard cannon about to rake their pommy sides amid-ships.    Too late for them, and theirs, I’m afraid, as there’s gold in those Admiralty cargo holds and we mean to have it.

Let’s not get all a-sweat and a-lathered, me scurvy dogs.   The thesis has not changed and certainly the Fed is not going to take the “brave man’s step” of setting the Caribbean afire with rum-soaked English scrip whilst our Parliament (of Whores) continues to spend like grog-stupefied wainwrights on barrel-selling day.    No, maties, they seek to confound us with this Mary-move of callow authority.   No man can call his actions bold while pleading apology in the next breath!  

If anything, said grape-shot toss was mere subtrafuge to cover for additional scrip production in yonder Admiralty’s subterranean printing gaols!  What will occupy the Admiralty’s cargo holds for years — baser and baser scrip — will be what ensures our golden Treasures worth! 

So be not a-feared but rather emboldened by the tightness of Rear Admiral Bernanke’s wedgies, and the sagging of his pompadour.  Now is the time to press the hot cutlass to their throats and let roar with musket, grape and cannon.   The battle is near-won, me swabbies.   Let us not then quail at the size of the Admiralty’s frigates, but rather laugh at their frailty — they are made of paper, lads!

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This day I shall be indulging in all me favourites, but  most especially those in the silver Escudo doubloons, for the price of bonnie silver is racing back up even faster than that of gold.    To that end I shall be indulging in me favourite miners, Silver Wheaton Corp. (USA) [[SLW]] , [[EXK]] , [[SVM]] , [[PAAS]] and maybe even the worm-bitten dogs [[CDE]] and Hecla Mining Company [[HL]] .   [[AGQ]] is only for the traders, but it may boom off of any pullback here.

Don’t forget me favourite golds either, which number three — Allied Nevada Gold Corp. [[ANV]] , Eldorado Gold Corporation (USA) [[EGO]] and Royal Gold, Inc. [[RGLD]] .   Some dogs that may be opportunities thanks to yesterday’s scare off  could be New Gold Inc. (USA) [[NGD]] , Exeter Resource Corp. [[XRA]] , NovaGold Resources Inc. (USA) [[NG]] and Northgate Minerals Corporation (USA) [[NXG]] , along with Rubicon Minerals Corp. (USA) [[RBY]] and even [[BAA]] .  Of course [[GDX]] is a great purchase if you want a catch all.

I also think the Ag side will continue to stay hot, so any weakness in Monsanto Company [[MON]] , The Andersons, Inc. [[ANDE]] , The Mosaic Company [[MOS]] , and Potash Corp./Saskatchewan (USA) [[POT]] should be seen as an opportunity.  I will likely have more to say on this front.   

Many of you may have seen I chose Cree, Inc. [[CREE]] as my March Madness pick (SLW is too volatile).   I like it and Veeco Instruments Inc. [[VECO]] as my two hottest tech names for the intermediate to long term (the only way I play).  

Best to you all, my hearties, and if anything today — WATCH SILVER — something seems to be “up.”

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[youtube:http://www.youtube.com/watch?v=vimZj8HW0Kg 450 300]

Ahm gonna take this itty bitty world by storm…

And ahm just gettin’ warm….

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Just in case any of you are thinking this recent pullback has been anything but a dollar play, have a look at this piece by ETF Trader (and by extension, The Financial Times).   Yes, that’s an $8 billion plus short on the Euro, and that’s only what we peons are seeing.  It could be a lot worse, or it could be all for show.  

What we do know is that the Euro is just another failed fiat waiting to happen.   Whether it occurs before the dollar (likely) or after, they all meet the same end, in tears.  Right now, the dollar is strengthening against it, after dropping to test support at the $80.09 level, and back to $80.34, after opening at $80.40.  

As you know, I think anything over $80.20 is a bad sign, and that combined with the large selling on strength from Fridays trade (some $675 million in the SPYs), we may be in for testing that 1,035 level on the [[SPX]] after all.    The silver stocks, after showing some promise this morning, are tipping their heads in obeisance to a further weakening in the POS (currently hanging above it’s $15.03 open at $15.11) and even the POG (currently $1,065.60).

I will be focussing on opportunistic gold plays today, as I’ve gotten quite a bit of silver in [[AGQ]] and Silver Wheaton Corp. (USA) [[SLW]] the last couple of days, and only got half my [[GDX]] calls on Friday.  I’ll be looking at some of that under $41 and Allied Nevada Gold Corp. [[ANV]] on any more weakness like this morning (which I missed, dammit).    I may bend for more [[EXK]] as I still have room for another 2k shares in that name.

The overall word is caution, but be ready to jump on an alert, because if Soros or some other whale wants to squeeze these Euro shorts, it’s going to be five alarm time for the PM’s.   Same will be true if the Euro really cracks, although I’m not sure the effect on gold will be as harsh as the effect on my poor silver horde.

Best to you all.

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Mr. Limm, Out on A Limb
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The dollar is currently right in the “crunch zone” at $80.24 as I type this. As you recall that was right in my “Wall of Death” from the previous dollar chart, as it ran into two separate strong fib lines:

So, today, on any sign of weakening in the $USD (you can keep an eye on it at [[UUP]] if you can’t get the DXY quote), I will be adding to my [[AGQ]] position one more time.

If we break through this area on more dollar strength, I will be hedging my positions again, and likely cutting down on some of my Silver Wheaton Corp. (USA) [[SLW]] calls.

Best to you.

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Freeeeeeee-ddddoooooooooooommmmmmmm!!!

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Just wanted to let you know that I’m still here, albeit with my guts wound around a spool and looking forward to that “Can’t-Get-Here-Soon-Enough” beheading.

I kid, of course.  But I didn’t want you to think I had abandoned you all, or my positions.  No, I’m sticking hard here, and have not deployed any more money today, although a couple of things are looking very tasty. Royal Gold, Inc. [[RGLD]] is one of them, already up more than a buck off it’s lows of the day. I may dabble in that one more time before the day is out.

[[AGQ]] is presently suffocating me, by means of a large rock laid across my larynx, choke-out style. This is the way this stock trades, though, so you have to be ready for “double draw-downs” as it is a double ETF. I will be looking to add that final 600 shs here, however, and it may be today or tomorrow. Silver Wheaton Corp. (USA) [[SLW]] is equally as ugly, but has (as a kind reader mentioned on the previous thread) quite a reputation from pulling back hard off of highs. Whether it gets all the way to 35%, I cannot say, but I’m also waiting to see how that on develops.

For golds, RGLD aside, Eldorado Gold Corporation (USA) [[EGO]] is performing the best of my three cabelleros. Next IAMGOLD Corporation (USA) [[IAG]] and dragging up the rear is the less liquid Allied Nevada Gold Corp. [[ANV]] . I continue to think Allied Nevada Gold Corp. [[ANV]] will provide the best long term bang for your buck, but I’d only nibble until a turn is confirmed.

The dollar (DXY) is most frustrating here, as it ran all the way to $79.97 only to fall back to the $79.84 region. I was hoping it would clear out all the way to $80.50 or so, but it looks like we may have to wait on that action again, at least until tomorrow.  

There’s also a possibility that $79.97 was the high water mark, but I’m not counting any of those quail’s eggs yet.   

Note — 1,035 or so is a 10% retrace on the S&P (or $103.5 on the [[SPY]]  — that could be a nice target for any resumption in the overall cyclical bull.  I imagine we’ll all be pretty exhausted at that point.

Hang in there, folks.  

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 Special Update:  

[youtube:http://www.youtube.com/watch?v=tcoVxbutl8g 450 300]

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Best to you all.

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Canucks Took this German Bunker, Back in the Day
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Yeah, so it increasingly looks like we got head faked on Monday, and the dollar (DXY) is going to make another try at that $80.20 level we talked about last week.  The dollar is up 35 cents as I type this to $79.73, after dropping briefly below $79 earlier this week.  Que sera, sera. 

I will continue adding to [[AGQ]] , as I want to get at least another 600 shares for my “full compliment.”  I will likely add opportunistically to other positions as wel, as I still have a little under 20% of dry powder left to deploy.    The gold stocks seem to be hanging in a little better than my bastard-children silvers, but that’s to be expected.  I am extremely pleased at the results of Royal Gold, Inc. [[RGLD]] today — beating revenue estimates by almost 30% and earnings estimates by over 20%.    That should bode well for my portfolio going forward, even if we do take a bit of a “dollar bite” today.

Again, not so sound like a broken record, but I think it’s very important to concentrate on these key names at these important inflection points — which is where I still firmly believe we have arrived.   On the gold’s, Allied Nevada Gold Corp. [[ANV]] has shown nice strength, as has Northgate Minerals Corporation (USA) [[NXG]] , Exeter Resource Corp. [[XRA]] and Yamana Gold Inc. (USA) [[AUY]] should all be holding in here.   If you can get Royal Gold, Inc. [[RGLD]] in the red today, it is a gift, imho.    All silvers should be bought opportunistically, of course, and I continue to love Silver Wheaton Corp. (USA) [[SLW]] , [[EXK]] and [[PAAS]] here.  Also, you may want to keep an eye on [[PAL]] and [[PTM]] for platinum exposure.

So wear your burlap today for fashion’s sake, and maybe even add a cap fashioned out of old tuna cans for “extra penitant” effect, but be sure to sew extra pockets within your sack so you can sidle into your local gem & coin dealer and slip some cadged Morgan dollars and Canuckistanian Maple Leafs  into them as your youngest son fakes an epileptic seizure in the lobby.

Best to you all, my bunkermates.

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