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Many have claimed that there’s no end is sight for this downturn, or recession or depression– until we see an uptick in the housing sector again.

Still others claim that until the banks are “fixed” and back on their feet, we cannot experience stable economic growth through strong credit support.

It appears each claimant is at least partially right, and moreover, that each of those sectors live and die together, wrapped in a form of symbiosis that is both mutually beneficial… and destructive.

This may all be “Master of the Obvious” stuff for you, but I figured I’d bring it to illustrative life for you anyway.  There’s not been much talk of the housing sector recently on these boards, and maybe that “out of favor” status is warranted.  Whatever the case, it’s clear that both housing and the bank index are again marching in lock step, and seemingly to their doom.

First I’ll show you $BKX –– no surprise for my readers, who’ve seen my starting to ring up purchases in the anti-bank index SKF because of this very weekly (sic) chart:

 

Note now that in comparison, I won’t use the Housing Index ETF– XBH— mostly because it’s made up of a lot of non-house building stocks.  Same with another housing index–  ITB — where some 70+%  of the stocks encompassed is not home builders but instead retail accessory places like Pier 1 and Home Depot.   No, I simply took the most popular name in the home building industry– Beazer Homes (BZH)– and ran the weekly chart.  The similarities are astounding:

 

And like $BKX, it seems BZH is readying for a rebound as well.  It makes no matter, I wouldn’t trust either as far as I could throw their Chief Investor Relations Officer.  These are sectors that are ripe for shorting at any major moving average (which on the weekly charts above would be the 13 and 34-week EMA’s).

Have fun and keep an eye on both for any profitable divergences.  Make no mistake, both sectors are hurting right now and should continue to do so into the near future.  That doesn’t mean a scalp won’t be available on the upside every now and again.

My best to you all.

 

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[youtube:http://www.youtube.com/watch?v=h-S90Uch2as 450 300]

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I’ve come to speak with you again...

Because I see Bernank softly creeping

Left his seeds where I was sleeping

And the vision, that he planted in my brain

Still remains,

Echoed, in the sounds of Bernank…

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SKF — Skiffles filled the gap today on Uncle Warren’s egregious self promotional purchase of BAC preferreds this morning, and at the same time hit my buy stop in that gap.   I am still only at about 25% of my desired position in the Skiffles, and I will gnaw at my target steadily and stealthily, giving myself ample room and time to digest my purchases, like a fat gourmand at a Polish Pastry factory.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

I fully expect Skiffles to head back to the $Two Hundo$ range again, and then some (recall, it saw the $400’s in the last bank conflagration).   I smell rancid bank death upon the breath of every visiting European tourist, and no amount of spearmint freshener will remediate it.  Not even good licorice.

Meanwhile, my 30% remaining gold positions all rocketed up today, in the midst of global downfall.   Go figure.  This is why we never sell the entire core, friends.

Not yet, at least.

My best to you all.

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

 

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Oy, that’s hot!
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Yes, Yes, BAC is rallying, but I’m not trusting this.

Rather, I think the FAZtards are about to have their sup o’ gluttony, here, as the weeklies try to reclaim the 13 and 34 week EMA’s they’ve already pierced.

I’ve found this is a fruitful place from which to grab some SKIFFLES, or in these more modern day, FAZ-mobile vouchers for a ride home.

I expect we’ll get turned at some point in the range between the $46.75 and $47.50 mark. That’s when the Citi Parti will experience the first pang of hangover, and then, le deluge.

And gold is overbought even as the dollar surges back, same with silver.   I will stay with my hedges there, and perhaps add a GDX hedge as well tomorrow.

It can’t be sunny every day.   Keep your chevrons up.

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I haven’t time and there’s no explaining, Lucy.  Let not your heart be troubled by my tribulations, as they number among the Blackberried.

Let it be known that I hate switching servers, but not my fellow man, even as he deserves it, verily.

Wow, chip and merrily, I cannot get over the stalwarts today. First, let’s look at the banker’s weekly on the [[BKX]] :

Robusto, no? You know what they say about robust banking stocks, yes?   Now look at the Trannies, Granny:

 

 

Voila!  Not only have you the perfect sell data, but you can take the bus to the bank as well.   It helps if your eyeliner is smudgy, but barring that, keep your eye on the above two indexes and above all watch [[UUP]] and DXY.  

Bless us all, everyone.

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Bonus track!  Testamentum Eternum!

[youtube:http://www.youtube.com/watch?v=74d3gWJOV-4 450 300]

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[youtube:http://www.youtube.com/watch?v=it-RXp0T2TA 450 300]

Cuter  than Bing, no?

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I’ll have you know, the direct translation of “too ra loo ra loo rah” is “Get drunk, you Irish monkey, and buy stocks.”

Here’s hoping my good friend M. Le Docteur de la Fly, who is resoundingly French on all days save this one, will comply.

Why?

Well, it seems the tell-tale market indicator, the BKX, has broke the shilelegh (sic) out, and wants to take the rest of the market with it.   Everyone with an ounce of Galway joostice (sic) in him knows that means the market wants to rip.  

Want proof?   Here’s a shot of Jamison’s and a chart for ye to consider in your bear suit:

Will we have a pullback?  Sure, most likely.   And I will likely lighten a bit more tomorrow, as I did today, with my Silver Wheaton Corp. (USA) [[SLW]] calls, [[GDX]] calls and [[AGQ]] sell off, all at a tidy profit, mind you.   But I haven’t sold a drop of BB&T Corporation [[BBT]] or even Pacific Capital Bancorp [[PCBC]] as I think the banks are for real here.

You see, the dollar has begun it’s move back down to the $78.50 or so level, and that’s going to be tough love for those of bearish persuasion going forward, even after our expected pullback.  

As a matter of fact, you might even think of adding to your [[TBT]] because Ben as much said he’s all for inflation today, that crazy bearded leprechaun of questionable heritage.  

I’m hoping all my fellow Irishman will lay down their “dukes” (sic) and join me in a pint of Guinness (and some Diageo plc (ADR) [[DEO]] ? ) this glorious day.  Celebrate our heritage, get a little drunk, get a little long.

It’s easy.

Erin go Bragh!

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Mr. Limm Likes Cash!
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We’re getting another mini-rally in the greenback, thanks largely I believe to the perceived death of Obamacare and the attendant printing those increased expenditures would have brought with them.    Of course, there are trillions in deficits rolling down the pike with or without socialized medicine on the table, so I don’t expect this dollar bounce to be particularly long lived.

Let’s have a look at  our dollar proxy [[UUP]] to see what we might expect.   First the daily chart:

As you can see, we gapped up pretty significantly yesterday, but we’ve been turning up for over a week now, stochastically speaking.   I don’t think it’s a major coincidence that the dollar rebound coincided with the increasing possibility of the Dem’s losing their filibuster-proof Senate and the markets perhaps getting the notion that spending might slow.   That said, there’s already many wheels in motion on the spending front, and I think perhaps this move reflects more “hope” than reality for the currency markets.  

As you can see, on the dailies we’re running into some decent resistance at both the $23.20 mark and then at the 200-day EMA at $23.32.   We’ll have to see if those levels hold, but looking at the weekly chart, you might think they will not.  The coil on the various oscillators seem to indicate we’re not done with this rebound yet:

As you can see, my near term weekly target at the 34-week EMA ($23.21) coincides with my above daily targets.   However, if that level is breached, it looks like the next levels of serious resistance will be $23.75 or so — which is a mile in terms of overall market, and especially commodity reaction.   

So be prepared to gird your loins if the dollar continues to strengthen.   For my part, I will be laying in wait to accumulate back more of the silver and gold names I dis-horded in December.   I added more Silver Wheaton Corp. (USA) [[SLW]] under $16 yesterday, and began buying Fronteer Development Group Inc. (USA) [[FRG]] for the first time at $4.87.    I like how it pulled back to the breakout area from the mid $5.20’s, as I had hoped it would.  

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In the mean time, it’s seems the banks really like this dollar move, as our favourite (sic) bank index (that Jeremy won’t fix the price indicator for) [[BKX]] has been cheering on this dollar move like they use them for inventory or something.

What’s wacky is that President Obama is currently jaw-boning the hell out of the banks with a threatened “extra-tax” to “pay back the American people” (despite the American people being paid back very favorably for TARP by all but the worst Congressional satraps at Fannie, Freddie, GM and Chrysler who, needless to even mention, are not included in aforesaid punitive tax).  

Could it be that everyone is whispering to one another and saying “he’s bullshitting us?”   Maybe.   Could it also be that this just today new threat from Goldman’s Favourite President about “limiting the size of banks” is going to end up yet another barrier to entry which will — soo-prize! soo-prize! — end up benefitting the largest banks by limiting competition?

Would Congress really do something like that??  (Stifling laughter)

Well, whatever the cause, the banks are off to the races like a drunken Irishman on Derby Day (or “like Jake”) in the last two days, even in the teeth of an overall market downdraft.    Check out the Index That Shall not Be Displayed — $BKX :

“What the horse,” no?

And now look at a current Jake Favourite, as I’ve been mentioning on The PPT for these last few days, Southern Powerhouse BB&T Corporation [[BBT]] :

Looking good, no Cisco?  

Here’s the weekly for the longer term play:

You can see my ultimate target on this one is $38, and if things continue as they have been, I don’t think that will be a long wait.   For the gamblers out there’s Pacific Capital Bancorp [[PCBC]] which Ragin’ Hat Tipped me towards a couple of weeks back at $1.08.   It’s been berry berry good to me.  I also like Huntington Bancshares Incorporated [[HBAN]] for the potential buy-out and PNC Financial Services [[PNC]] and UBS AG (USA) [[UBS]] for “best survivors” status.     For large banks, I continue to think JPMorgan Chase & Co. [[JPM]] will end up on top.    

Best to you all.

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