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LED companies are breaking ursine snouts like Ranger Smith on a moonshine-induced weekend violence binge down at Jellystone Park.  PowerSecure International, Inc. [[POWR]] is another play that looks to be breaking out in sympathy.  The company is actually a mini-conglomerate focused on industrial stand alone power generation, but they had already been “dipping their beak” in the LED space for a bit before making this acquisition the other day.

As you can see, they are purchasing an engineering firm that works with a lot of the Cree, Inc. [[CREE]] technology from up the road in the Triangle Region of No’th Ca’lina.   I don’t know how much of the move this week is due to that Cree, Inc. [[CREE]] link, but it seems certain that this news is not hurting our acquiror, whose main business in providing emergency back-up power to stand alone facilities like supermarkets and hospitals.  

Personally, I think this stock was somewhat beaten down and the LED angle is just an excuse for it to head back to previous levels.   As you can see, this triangle breakout on the weekly shows that it’s headed in that direction:

 

You can see my targets above, but I might want to wait a second before jumping in here, after the massive two day move we’ve had.   Just as an aside, I gave this pick to the gentlemen of The PPT last night.    If you were non-pikerish, you could have hopped on this 10% ago.   Think about it, Mr. Pennywise-Poundfoolish.

Best to you all.

PS — I see the [[HUI]] topping at $475, at least temporarily, before making a run for the old highs at $517 or so.

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Ha ha, just like my annual [[PAAS]] Easter Egg coloring pun pick, I feel the need to get that header in there every once in a while, just so I can feel young again.

I thank you for that indulgence, M. Le Fronteer Development Group Inc. (USA) [[FRG]] , you little power house uranium-gold junior, you.

Not since those halcyon days of  “Skiffles” [[SKF]] has there been a stock that moves so nicely whilst also providing ample punning opportunity.  What more can a semi-serious blogger require, I ask you?

And you likely remember this chart from the last time… we’ve finally cleared that consolidation area, and are seeking to secure radioactive gold gains (gold mixed w. uranium makes for the most posh nuclear weapons) with these targets:

I would like a short golf clap for frequent visitor “Employee8/Teahouse on the Tracks,” who reminded me of this holding yesterday and prompted this reminder post.  He’s also been very successful with his [[MVG]] call, which I have not yet gotten around to buying yet.  Startling, I know.

I would also like to point you in the direction of the recent Exeter Resource Corp. [[XRA]] spinoff, [[EXGMA]] (which I’m not sure we’ve got in our system yet).  It was up over 17% yesterday, proving the good sense in spinning off everything you can in a bull market, and hoping the market takes that unlocked value higher.   

We are of course in a raging bull for the precious metals, and that’s indicated by the acquisitions which seem to be popping  for the smaller miners (see  [[LIHR]] last week and Agnico-Eagle Mines Limited (USA) [[AEM]] ‘s announcements this week)  so it’s likely the spin-off is now being reflected as a value play AND an M&A trade bait possibility.

Last, I am hoping to roll out a couple of more LED plays, as soon as I do a little more research in some of these other names.   Of course Cree, Inc. [[CREE]] and Veeco Instruments Inc. [[VECO]] are the monsters in the space, and I’ve already bedded my stock barges with their shares.   I am looking to add as I think this space will remain hot, no matter whether our President remains Green or not.   Cheap lighting is cheap lighting, and it’s the pennies that count.

Best to you all.

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

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Yeah, so I’m the last iBC blogger left in the iBC March Madness Tourney.   It only took me a couple of years of playing, and losing early to realize that a measured, trending, relatively predictable pick beat out a burning comet every time.  In the end, like in life, it’s all about the beta.  Hence Cree, Inc. [[CREE]] , a boring, yet utterly predictably fantastic stock that I’ve owned since the low fitties:

Are you kidding me?  It looks faked doesn’t it?

Now look at this week’s rival, SanDisk Corporation [[SNDK]] on the weekly chart.   Also impressive…

Very impressive, but I think ready for a pullback.  In fact, I think both names are ready for a pullback this week and our competition’s result will depend upon which of the two pulls back  least.   I think the dailies give us a hint on this one.  First,  SanDisk Corporation [[SNDK]] —

Note the relative fragility of the daily, with all those gaps and the overstetched nature of the recent upmove? 

Our friend [[CREE]] is experiencing a similar overstretched period here (over it’s 200 day EMA especially), but I think the chart is a lot more “tight” and predictable.  As a result, I think the pullback will be less severe:

Long story short on my take:  the tightly wound anal retentives at Cree should squeeze one past the loose-bowelled chip-eaters at Sandisk this week. 

Let the shit talking begin.  (Oh, that’s right, it ‘s already begun…)

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Special Update:  My Lou’ville Cardinal Birds are set up as a #9 seed in the East, to play against a soft Cal Bear team (read “Bezerkely hippies”) and then notched to play weak ass #1 seed Puke, er, “Duke.”  

Let me say that knocking off Syracuse for the last Freedom Hall game ever was intense and pleasurable, but knocking Duke off it’s ill-gotten #1 seed perch would be a decade-maker.  Fellow Duke-haters, please pray for the health of senior guard Jerry Smith.  Thank you in advance.

A preview of how good the Cards can be (the first 1:10 is ALL Jerry Smith, last part is all Kyle Kuric). Enjoy.:

[youtube:http://www.youtube.com/watch?v=zevk8jgf9gA 450 300]

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“When a Mere Ass-hat Just Won’t Do”

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Before I talk about this Disco Ball Market, I want to take a second to explain why I love this country and I love going to work every day, despite the imminent Tsar Bomba of Damocles hanging over this economy thanks to the near-brain dead or simply evil (your pick) statist government with which we’ve been collectively saddled.

You see my line of work brings me into contact with blindingly smart people every day.   And not just smart people, like your average egghead dufus at State U., but smart ambitious fellows not unlike Le Monsieur Le Docteur de Le Fly.   People who want to actually do and create things in a clever and efficient fashion that no one has considered before.

It gives me such hope, you see.   (Aside: Can I use that word, or has it been wholly discredited like the otherwise once-honorable “liberal?”)  

Anyway, it gives me hope for this benighted land, that we might still have the IP to make it “on to the next,” as Jay-Zee would say.   These are the people that are continuing to create value every day, even in the worst of market circumstances.    And here I am,  just lucky enough to stumble into them every now and then, and maybe lend them a hand along the way.

Without getting  too deep into specifics, let me proffer this example of  the young man I met  this morning…

   This guy used to be in plain vanilla big project software consulting.   Serendipitously, or unluckily depending upon your tolerance for such things, many of his clients were large state governments.   You know the drill if you’ve been exposed — this is a client base characterized by horrendously long sales cycles, diffident bureaucracy, inefficient and/or politically-driven decision making — you know the drill.   The biggest net positive to that kind of customer base is that it’s magnificently sticky, if perhaps only by dint of inertial motion (thanks Newton).  

You’re probably saying “so what? — there’s a myriad of private sector gov’t suppliers out there, and they all sell for about 5.0x cash flow and maybe 0.75 to 1.0x sales.”   Big whoop, right?

   Well, that’s where the innovation I so love comes into the picture.    This young man came to realize, via quiet hard analysis and slow revelation, that the value he could extract from his customer is so valuable to the outside world, that he can afford to pay them and himself, and still make four to five times the margins he was originally making in his original model.

Think of that for a second.   He can afford to  pay his clients to allow him to do what he does, which also happend to be a value added, money-saving service to them.   You think that’s going to drive some demand for his products, maybe?

I love my job.  God Bless America, and screw Damocles while You’re at it.

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This Disco Ball Market is turning and turning and sparkling and sparkling, and it’s even worse on my poor M. Le Fly’s brain than the chemical laser-krunk, electro-youtube sonic Ecstacy-Assist “the kids” are replacing Gloria Gaynor with these days.

Sometimes I feel like one of those “lucky ones” of the generation X+ who were too young for Viet Nam, but too old for the Gulf Wars,  but replacing those armed conflicts with the twin piers of “Disco” and “Electronica.”   Much like the tenets of war, the universal deficiencies of bad club music remain eternal.

One is driven to speculate as to whether the Spartans and Etruscans had to winnow their young from the atonal lull of the thumping lyre.  Better than warring with the Athenians, I guess…

Watch the dollar.   If it breaks down, we will continue up.   However, today’s action in gold and silver seem to be signalling, if weakly, that we’ll have a pullback here.   I may lighten on some of my calls, at least temporarily.  

In the mean time, the banks BB&T Corporation BB&T Corporation BB&T Corporation BB&T Corporation [[BBT]] , Citigroup Inc. [[C]] , KeyCorp [[KEY]] , and Pacific Capital Bancorp [[PCBC]] and my favourite (sic) L.E.D.  techs, Cree, Inc. [[CREE]] and especially Veeco Instruments Inc. [[VECO]] look very strong, telling me this is not an “about to plunge” market, no matter the sweaty-palmed Denninger-types’ trepidations. 

Please also remember to take any spare change lying around in the cushions and apply them to a short of ArvinMeritor, Inc. [[ARM]] , so I may defeat mine righteous enemee (sic), CA, and proceed to the Elite Eight.  

Thanks in advance.

Update:  The real thang, yo’ —

[youtube:http://www.youtube.com/watch?v=ZBR2G-iI3-I 450 300]

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“More than any time in history mankind faces a crossroads. One path leads to despair and utter hopelessness, the other to total extinction. Let us pray that we have the wisdom to choose correctly.” — Allan Stewart Konigsberg
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Woody Allen once said “80% of success is just showing up.” To some extent that’s true, as reliability is an attribute valued across a wide spectrum of employers, friends, relatives, lovers, etc.

Why do you think [[MCD]] sells so many Happy Meals? Because their burgers are made of some top quality succulent sirloin? No, it’s because the little kid in us knows we are going to get the same overdone blandburger-and-salty-fry combination every time, and that’s comforting.

So too, the comfort of a trending market soothes the savage breast of the coked-out daytrader in all of us. But even a long term trending market is not without it’s harrowing pullbacks and trials of faith. For that we need perspective, humility, and in the end, endurance.

Endurance and a willingness to sit and wait for the trade to come to you are the key to the type of long term wealth accumulation we like to talk about here. Remember how scary gold looked a few weeks back, when we thought maybe the bull had finally tapped and the dollar was re-ascendant? Note how I said the 34-week had been a great place to buy in the past, despite the strength of the dollar? Look at the dollar gold chart I’d shown you a few weeks back:

As in the past, the 34 week Exponential Moving Average (“EMA”) has been a reliable signal in this uptrend (all but for the one dreadful period at the end of 2008, where the 200 wk EMA was the stopper).    Note in this next “nine year bull” chart how reliable the signal has been, and also, how it seems the “touches” are starting to get farther apart.  

 I’m not sure what to make of this “touch extension” business, but I will point out that as bull markets enter their parabolic stages, they tend to spend longer and longer periods above the common daily and weekly moving average “rest-stops”  (ie, 20, 50 and 200-day on the daily and 13, 34 and 200 week on the weeklies).  

I am of the mind that our hard earned endurance will pay off here, friends, and the dollar will soon break down again, and that should push our gold:dollar ration back over $14 again, to the great chagrin of metallic ursines the world over, but especially those on the upper Left Coast.     

For turnaround Toosdee (sic), I would expect further deterioration in [[UUP]] , and therefore highly recommend a late day grab of some Fronteer Development Group Inc. (USA) [[FRG]] , Exeter Resource Corp. [[XRA]] and [[SVM]] .

I also believe Cree, Inc. [[CREE]] is almost done pulling back, and it should move above $70 this week, as the market continues to roll over wide-eyed, squatting Kodiaks.  As a consequence, Veeco Instruments Inc. [[VECO]] is also worth a look.

Best to you all, fellow Konigsbergs.

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