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I’m going on vacation so don’t expect all the bon mots.  I’m supposed to be packing so I can’t waste time regaling you with nonsensical narrative.

I was taken somewhat unawares by the flagellant moves in my favourite names today, I’ll tell you.  But having weathered the lashes of these volatile Vincenzos many a time before, I’ve grown almost inured to the pain.  Such is the way of the long term bull-rider.

Here’s my daily take on the AMEX Gold Bug Index — the $HUI:

Not unfamiliar, no?   And it looks like there’s probably a little bit more to go, according to the weekly:

Let’s gird our loins for a little more, here, but it shouldn’t be all that much more.   The dollar broke through that $85 line I illustrated last night.   I can’t see that being a good thing for the strength of the dollar.

Best to you all.

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[youtube:http://www.youtube.com/watch?v=FRWU2DysF30 450 300]

Showing this to the kids next time they don’t want to practice piano….

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I spoke to some of you on Fly’s blog the other day about how I’d had a conversation with a couple of traders whom I respect greatly, and whose collective net worths range into the billions.  They were/are considering moving their capital to some less confiscatory climes if the current regimes remain in power past November of 2010.   They said this bluntly and with little rancor.   The conversation, in fact, was for the most part calm and matter-of-fact.  A sense of resignation permeated the meeting.

“It is what it is” seemed the pre-dominant theme.

Many times I’ve said on this site that “capital is mobile.”   That phrase should be embossed in gold bas relief a top both Congressional Speaker’s podiums in both the House and Senate.   It’s a phrase all governments should take to heart, but ours most specifically because our success today as a global Colossus (dare I say “Atlas?” lol!) is due to the flight of both specie and intellectual capital to our shores.

What I mean is that governments unfriendly to capital, be they in Cuba, the Soviet Union, France, and for a time (ironically) Mainland China and India forced intellectual and physical capital off-shore into the arms of nations more friendly to its use and protection.   The most hallowed place, up until recently, was in our own  U.S.capital markets system.

Forget about “your tired and poor” — America became great on the backs of your innovative and rich, Asia and Europe.   Sorry, that’s just the way it’s been.   Thank our Constitution and integral respect for property rights for those wins.

The question each of us must ask, however, is can that win streak continue?  If the hard fought aspects of U.S. exceptionalism (not my term, but there it is) are gradually worn away, and we end up looking like just another 50% government oriented European state, will entrepreneurs, innovators and capital investors continue to be interested in our ability to create wealth?  Will that ability even remain a core competency in the 21st century?

Hard questions.   In the mean time, U.S. Congressmen dumber than even their mulish appearance would convey, are calling for the “freeing” of the Chinese currency.   This would be a disastrous turn of events, not just for us but for the Chinese themselves, who depend upon the artificial cheapness of their goods to feed the American consumer maw and thereby continue their growth in productivity and efficiency.   Break that equilibrium and the Chinese will suffer — temporarily… as they move from a Third to a First World country and begin becoming emboldened consumers in their own right.   Such an evolution for China — like post-war Japan’s — is all but inevitable.

As a result, the U.S. will be shorn not only of its cheap goods, but of its single most important financier — the Chinese Central Bank, who has been sterilizing our crap paper for years.   Soon that subsidization will end, and we will have to face the reality of our over-spending.   That day of reckoning will come all the sooner if we force the Chinese hand, as so many critically stupid Congressmen are now attempting to do.

The play this week (surprise, surprise) is the precious.   I bought another 2k of AGQ on Friday, and tried to add 2k more SLW, but I was busy that day and only got to call in the trade to my broker.   Unfortunately, I noted this evening there is no additional SLW in my account, so I will have to administer 40 lashes tomorrow morning to aforesaid sloth-like attendant.    My kingdom for competence!

Sigh.  

All the silvers and golds look good right now, but none more than my favourite (sic) gold ANV, which seems to be going to the stratos.    I continue to like EGO and also RGLD, especially after the recent Goldman capital raise.

Best to you all, and watch out for those rem-nem-bee’s.   They sting when aggravated.

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Yeah, the dollar is up, but so are the precious metals, so go figure.   It’s not often you see [[UUP]] riding an updraft right along with it’s mortal enemy, real money in the form of [[GLD]] and [[SLV]] .  

What’s going on?  Well, I’ll tell you what I think and it’s just a theory… but I believe the Euro is headed for a bad night with the Reaper, and all the printing presses in Frankfurt are better off producing saurkraut than Euro-denominated debt to back this Grecian salvage job we saw today.   

I’m getting major deja vu, ovah heah, and maybe you are all a tremble with it too.  Remember when the gov’t stepped in and demanded that Jamie Dimon save that piece of rat’s offal, the Bear Stearns Company?  And then soon after, it became impossible to save Lehman Brothers in turn, despite that latter bank’s greater importance to the capital markets’ zeitgeist?

Well, I’m thinking we are going to see the same here with Spain and maybe even Portugal and Italy lining up at the Eurotrough, if this most recent Moral Hazard Play works it’s way out in similar fashion to that of our own Wall Street bank collapse fiasco in 2008.  

 I mean, why stop at Greece?  That is, unless you have to?

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That said, there are havens of safety and they are in the leaders.   One such King Kong in the precious metal space is Allied Nevada Gold Corp. [[ANV]] , which I’ve loved since it was a little $6 stock, barely in knee pants. 

 For the love of Uncle Mike, why don’t you pay attention to my picks like this one?  Do I not provide enough excitement with these double and triple baggers over a 12 month period?  Ah well, it’s not like I haven’t been eating my own pudding, right?  My gosh, take a look at this weekly chart:

Yes, that’s pretty much “free air” you are seeing in these current climes… marked by very little resistance.   I’d love to see this beauty taken out by one of the acquisition-minded bigs, but I’m content to sit on my gains and allow them to continue to accumulate, no mattah (sic).

Speaking of charts that look like Cree, Inc. [[CREE]] look at CREE, again, and don’t forget about the monster move Veeco Instruments Inc. [[VECO]] made today.  Make no mistake, these companies are going to be the new tech leaders, much like the Microsoft Corporation [[MSFT]] ‘s and Dell Inc. [[DELL]] ‘s and eBay Inc. [[EBAY]] ‘s were in the techy past.   You should be content to accumulate these plays, along with such other long term targets like Royal Gold, Inc. [[RGLD]] and Monsanto Company [[MON]] .

That’s what I’m here for… the long term stuff and the stability.   Not overly exciting, but a great deal of solid companies, doing the best in their fields.   Now go on, get.  There’s probably some teevee on, or something…

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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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I don’t have a lot of time, as I’m “leaving on a jet plane” from Minnesota South, also known as Palm Beach County, Florida, to warmer climes in the Bluegrass region.   Also dealing with some family issues, not the least being my wife’s tolerance for “vacation” with our four kids — “not to exceed five days/nights” it read on the labelling.  Can you picture the look she’s giving me as I tap these words out whilst I should be loading the car with luggage?

Yet, it’s my devotion to my Docteur Le Fly, his magical engine in The PPT,  and my good bloggish friends that drives me like a grizzled veteran of the India campaign is driven to a brown ale at the end of a long day of patrol. 

Here’s what I’m seeing, and be sure to filter it through all my inveterate bias and natural cognitive dissonances.  I think the dollar is gasping it’s last for this time period.   It’s raging against the dying of the light in the most poetic way, but it’s punches north grow weaker and weaker, even despite all this news of imminent employment doom and Grecian tragedy.  [[UUP]] would need to stay north of $23.60 to remain convincing that the dollar possibility is still on, and DXY above $80.50.  

I think a weak employment number only weakens the dollar tomorrow, while a strong number (unlikely, as we’ve seen bruted) marches the market north.  Either way, I see “up” for our friends on the PM side.   Note how the [[HUI]] has broken out of it’s downtrend and is now looking to successfully touch both the downtrend and the 50-day EMA at $415?

I think this will be our signal to buy with both hands.

Here’s the stock I like most for those who are interested.  It’s gold, and it’s been golden to me and mine.  I don’t see why that shouldn’t continue.

Best to you all, and I’ll speak again with you after touch-down back north.

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We be coursin’ out o’ the far lip o’ the storm and here it tis at her strongest.    With the power o’ yon circlin’ vortex, it will try to drag ye to yer briny doom deep in the cold confines o’ Davey Jones’ Locker.   Take heed, lads!

Make an eye on yon dollar representative [[UUP]] — note how he’s strooglin’ and dancin’ like a half-mad murth’rous boocaneer at the end o’ a strip of fine English gallows hemp?    He’s tryin’ tah break ye lads, and his murth’rous brither, $DXY has shot all it’s grape over $81.00 as oirly as this morn!     They’re after ye traisure lads, as shore as I was born a palsied pain and boirnin’ boyle to the British Empire’s arse!

Aim yer guns down, lads, right below the waterline of yon King’s Federal Admiralty First Rater, the H.M.S. BernYankme, for her three decks are festooned with dollar cannon, ready to sink ye with all hands aboard, and yor sparkly traisure o’ silver and gold as well!   

But beware the storm that assists yon bewigged and brass-buttoned scurvy Federal Redcoats, blowin’ out of the South Mediterannean, and the Aegean Sea.   Tis driving the dollar to new highs against the warped and besotted Euro.   Fill the lifeboats with [[DRR]] and other provisions such as meat pasties and cane sugar.   Despite the dollar tide being up near a full 100 basis points, [[GLD]] and even [[SLV]] are riding the storm well, which gives me good cheer, even as my cutlass runs red down it’s fuller, and my beard sizzles with ball and gunpowder.

[[SVM]] and [[PAAS]] which were laggards last week, seem to be holding out the best in the silver circus.   [[EXK]] , Hecla Mining Company [[HL]] and [[CDE]] are next in line, with my favourite (sic) Silver Wheaton Corp. (USA) [[SLW]] taking the worst of the tsunami wave for the rest of her crew.   

The cautious among ye will await the drop o’ DXY below the $81.00 sea line.   At that point, I think even the Treasury Bane [[TBT]] will be boardable without fear of it becoming a Jonah.   Me three favourite golds, Allied Nevada Gold Corp. [[ANV]] , Eldorado Gold Corporation (USA) [[EGO]] and IAMGOLD Corporation (USA) [[IAG]] seem to be holding up in that order as well.

Hold hard mates, I see a calm horizon when this sqall be done.

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