[youtube:http://www.youtube.com/watch?v=6Uxc9eFcZyM 450 300]

Save That Schit For the Morning After

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A funny thing happened whilst I was away from the office today (for the second day)... I got murdered.   Usually when I’m out and about the market is pretty accommodating, like an Edwardian butler in white gloves and tails.   He  may give me a light workout, just enough to suffuse my brow with a light patina of salty perspiration, nothing more.   Even then, he’s there to hand me my plush towel and smoking jacket at the bell.

But today I was accosted by a gang of wiry Cockney longshoremen in baggy jodhpurs and nail-soled leather jackboots.   Reviewing my 50% position in gold stocks like ANV and silver stocks like — you name it, but SLW was down almost 15% today — they proceeded to bash me about the shoulder and ribs with brickbats and lengthy cords of hard salami.  They said something about leaving my face “intact” so there’d be no questions at work tomorrow.

Nevertheless, I speak to you from traction after suffering a near 7% bullshit beating today (don’t believe me? Check out XRA’s action today, and GFYS!), and am lying here in my linament-soaked bandages, waiting for a bounce to get out of some of these damaged names, as per the plan of yesterday.

A bounce, you say?  Jake, you addled fucker, you were thrown down one too many escalators today! How say you “bounce,” pray tell?  Well, here’s clue # 1 on the $SILVER commodity chart.  It’s been almost 15 months since we last hit the 200-day EMA, and yet we hit it today.  The RSI is oversold egregiously as well:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As for the $HUI today… well, you know the sad sad end of that story.  Like Brad Pitt’s relocated Northern Irish Provisional Army man, Frankie McGuire, said to Harrison Ford’s NYPD sergeant, Tom O’Meara  in the 1997  IRA potboiler, The Devil’s Own —

“Don’t expect no hoppy endin’, Tom.  It’s not an American story, it’s an Oirish one.”

Yes, and it appear’s our Baby $HUI ended up just as perforated as young Frankie did at the end of that movie.   What’s more, it looks like there’s still some room to travel even closer to Hell:

But don’t cry for me, Argentinians.   I am getting up and hitting back twice as hard, Chicago Politician-style.  In fact, I swung a haymaker at a bunch of AGQ this afternoon a little too early, at $175 and got stopped out.   I may grab some more on the open tomorrow though.   Also, respecting The PPT and it’s historically oversold levels, I dumped out of half of my TZA hedge and loaded up on a very large dollop of TNA at the close.   I may even add to that if we have a last blow off tomorrow morning.

Don’t let the Man get you down, folks.   Let’s hang together, as we sure don’t want to hang separately.

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Have to Prepare the 5-year old…
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I’m apologizing in advance tonight because I am readying now for The Great Maine Vacance, and I haven’t the time to go into deep microanalysis of the political economy and the stock market tonight.

What’s more, I have no idea if our quaint little cottage will have internet or wi-fi coverage.  The only thing thus far confirmed present in the area are large mosquitoes, the occassional lost possum and women with hairy legs who would prefer you call them “Frank.”   (Not really, Maine’s not like Vermont… yet).

This could be my last missive for a while, so I will leave you with a doozy pick.   I expect the PM  pullback I’ve been talking about is here, and we’ll see some nice entry points in the next couple of days.  Just scroll back a couple of days and check the charts for a number of optimal entries which may have seemed unachievable this week, but which may approach your wheelhouse soon.

My doozy pick is NUGT, the Double Gold Miner ETF.   That’s right, if you feel you haven’t been getting enough “action” from jumping the Snake River Canyon with your Big Wheel,  then this is the play for you.   That’s right — extreme caution is warranted (like w. AGQ):

Thank you all, and I hope to speak to you again soon.

 

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I figured I’d throw out a rare intra-day post this morning to let you know exactly what I’m looking at to determine my next moves here.   As you may have guessed, my position will largely be dictated by the action of the dollar here as it struggles to emerge from a months long death spiral — whether temporarily or not.  

What will determine that decision in the near term will be the dollar’s actions as it approaches it’s long term cap — the 50-day EMA.  Notice how that line has served to knock the dollar back, even on strong  rebounds like the one we’ve witnessed this last week or so? 

Now, even if the dollar does break that 50-day EMA at $75.22, I think it’s rather unlikely that it will get much farther than the descending 200-day EMA above it at around $78.00.

 What I don’t want to do, however,  is wait around with overweighted positions in silver miners and AGQ while it decided to redescend.   I have enough budding gray hairs from my kids, thanks very much.

So the plan will be to cut back to about a 40% position across the board in the event of a dollar breach of the 50-day.  I will likely get rid of most if not all of my AGQ, though I may keep a stub position just to keep an eye on it.  Again, I may have a lot more slack in that position than you do, so mind your own risk at your acceptable levels.

Keep in mind also that I told the Monsieur at the end of last week, via private correspondance, that I wholly expected a retest of the lows in the silver miners in order to prove  this a more substantial rebound than the “V” we’ve seen thus far.  

That doesn’t mean it’s not hard to watch, of course.   Best to you all.

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I have my 5-year old to thank for giving me the Derby winner on Saturday.  He liked the name “Animal Kingdom,” so we played him across the board.   I must say, however, that I  attribute my choosing the second place winner, Nehro, in the exacta box parley (paid $330)  to my chance conversation with Nehro’s trainer, Steve Asmussen, in the Dallas airport after last year’s Derby, which ended with my decisive judgement that he was “a good guy.” 

So you can see, there’s a lot of science that goes into these Derby picks.  It’s quite amazing.  But truthfully, Animal Kingdom is a noble beast, second only perhaps to officially endorsed iBC show horse Banned, who won decisively the day prior.  Read more about Animal Kingdom here, and cheer him on for the Preakness, won’t you?

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For those of you who hoovered silver with abandon last week, God bless, am I with you.  We will know relatively quickly whether or not we’ve made a wise move “buying the blood.”   My aim is to dump a lot of the AGQ I purchased last week on a break back above $40/oz. or perhaps earlier if the situation warrants.    I think there’s significant chance of a retest of last week’s lows, however, before that happens.  In fact, I would welcome a successful retest as a sign of a more healthy bottoming from this recent artificially created sell-off.

But let’s be limpidly lucid about what happened last week.  There were a lot of cowboys knocked off their horses.   Whether that was a move by the big boys to clear the decks for further ascent — or at least for proper physical delivery — will be apparent by the end of this month, and perhaps even by options expiration day.  

In the meantime, I stand with some dry powder left, but a much smaller amount than at the beginning of last week — less than 10% of my total portfolio.  It’s unlikely I’ll be purchasing anything new unless I see something just ridiculously mispriced in relation to the rest of the market. 

Let’s see what Monday — and the London bankers — brings us.  Carry on.

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33 Is this a dagger which I see before me,
34 The handle toward my hand? Come, let me clutch thee.
35 I have thee not, and yet I see thee still.
36 Art thou not, fatal vision, sensible
37 To feeling as to sight? or art thou but
38 A dagger of the mind, a false creation,
39 Proceeding from the heat-oppressed brain?
40 I see thee yet, in form as palpable
41 As this which now I draw.
42 Thou marshall’st me the way that I was going;
43 And such an instrument I was to use.
44 Mine eyes are made the fools o’ the other senses,
45 Or else worth all the rest; I see thee still,
46 And on thy blade and dudgeon gouts of blood,
47 Which was not so before.

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Sure, we’re all getting a little bit MacBeth-paranoid here.  In fact, many are in full panic and I can understand your feeling.  It was no fun trying to concentrate on track business today (literally) whilst glancing at the ever plunging price of silver, and then gold.

That said, we are in extremely oversold territory here, which should allow those of us who are too nervous to hang on (aye, if the inevitable D-wave is here, we should all be nervous) to exit into the sharp rebound. 

I am still of the mind we are in a severe, if blood-freezing correction, brought on by a number of factors which can only be ascribed to government-regulatory cronyism.  Sorry, I calls ’em as I see ’em.

Take a look at our friend $Silver again after today’s close:

The oversold condition is unmistakeable.  Same goes for AGQ another Bollinger Band crash victim that can make one money right off.

I haven’t seen a stock this oversold since the days we played in IOC, and remember what fun that was?  V-King remembers.   Well, cheer up, it can be fun again, and we can grab some gains here, even amongst the carnage.

Be well, and be attentive, me swabbies — SLW and EXK  look sexy slimmed down like this.  Small bites along the way is how I’ve been re-accumulating monster AGQ.  You may wish to look to that path for any of the stocks you are currently stocking.

I’m tired beyond all belief and Derby is two days away.  Not sure I’ll make it.  More tomorrow.

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The Goonch will speak now, and you will listen…

Mr. Jake has gone for his annual Feast of Bipeds Cheering for Quadrapeds.  Let me explain.   Mr. Jake goes to get drunk and forget about life for a while. (The Goonch heard these words from a magic box that was crammed with singing humans.  The magic box was owned by two fat fisherman who once were noisy above Goonch’s sky, but now make no sound in the Goonch’s belly.) 

The Goonch is cross with Mr. Jake.   Mr. Jake goes to watch delicious healthy quadripeds with funny names run around in a clockwise circle while he cheers and sips brown crazy water.  The Goonch feels this is a tragic waste of healthy delicious quadripeds and would much rather Mr. Jake lead said delicacies down to the shores of the Ohio River where the Goonch is waiting patiently.

No matter, the Goonch’s belly is full this day, anyhow.  Many many piles of silvery and gold pastries were strewn about the Goonch’s lowland parlours and the Goonch did not allow those opportunities pass by uningested.  Restraint is not the Gooch’s bag, for the most part.  

So today, the Goonch supped well on AGQ at $232.66.  It was delicious, if filling.  He also had his fill of AG at $17.47, and SLW at $36.30.  On the gold side, the Goonch was grateful for the bits of ANV floating at his meridien at $36.05.   Most propitiously, The Goonch was grateful also to chance on some scrumptious EXK at $9.56, between his usual fare of drowned puppies and kittens.   The Goonch thanks all dumpers, large and small.

Be assured, the Gooch still has ample appetites, and if you refuse to bring your small children, or your healthy brown quadripeds close to shoreline where I might show my lip, then I will be pleased to ingest more silver-that-is-not-fish. 

Most corpulent good health to you all.

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Addenda:  For those of you fretting about the CME increasing margin rates on the silver markets, I again ask you — why do you think they are doing this?  As the most astute Jesse from Jesse’s Cafe Americain points out — why didn’t they raise margin rates during the dot com bubble, or mortgage rates during the real estate bubble if they were so concerned for investor’s safety?  Is the CME some sort of sainted brotherhood looking out for the small investor?

Ummm, no.   As I’ve mentioned on these boards before, and Jesse, to his ever-lovin’ credit independently corroborates, it looks like those sneaky bastards are running out of silver.  

I just found Jesse’s blog tonight, while researching this unprecedented fourth (no! 5th!) margin raise in two weeks by the CME.   Tell me — who acts this crazily expeditious in such measures?  Can you imagine the Fed raising short term rates four (strike that, five!)  times in two weeks?

Is this not a sign of panic?  Occum’s Razor,  my friends, shave with it!

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