I immediately went down to see what’s been keeping Danny from blogging…
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Since I was experiencing a cataclysmic Vitamin-D overproduction cycle out here in SoCal, the last sunny place left in America, I decided to come inside and see what the heck was going on with this market. For one thing it closes at 1:00 out here, so the hippies have many hours with which to purchase pot and snugly pack their bongs before the 6 O’Clock news. Odd, no?
Well, it turns out that despite my hedging and raising large amounts of cash, my portfolio continues to metastisize. In fact, metaphorically, it looks like a large Engine No. 9 freight locomotive going down the slope of Mt. Pilot, with all it’s air and hand breaks on full stop. I’m showering enough sparks off the railbed to tetch a bonfire, but I’m still moving forward.
I don’t mind giving up some of that opportunity cost, however, because we’re trying to be responsible with our cash over here at the JakeGint Blog of Low(er) Grade Mental Disorders. Here, we go by the semi-paranoid thesis that Mr. Market is trying to steal your wallet every second of every day. So if that means we don’t partake in his reindeer games to the fullest extent allowed by California law, but we return home with all ten of our fingers attached and facing in the proper direction, then we’ve properly schooled you in the tenets of risk management.
Right now, reindeer games are accelerating already large wins in such Dogberts as FTK, QSURD, ENTR, and AVL. If you have not taken profits in any of these, I would at least recommend a relatively tight stop. As well, while the miners are beginning to stall (as predicted), other Jacksonians, like MON, ANDE, TCK and TC continue to push along oblivious to the divergences and breadth problems we’re seeing popping up all over.
And here’s my real problem… the Gold Bug Index $HUI has broken through some significant support here (the 20 and 50 day EMAs) and is now trying to rally back above those levels again. Here’s the thing… I don’t think it can until it tests the 200 day EMA again like it did in the last major cycle down, back in July. For those of you who are not as concerned about the PM market, a breakdown in the $HUI will usually give you 5 to 10 days to get the heck out of the rest of the market too.
How long will I hold to this thesis you axe (sic)? Until we clear that green line atop the circular bodies on the right in the above chart. Only then will I say, “You have passed the test, $HUI, well done!”
More live pics of Danny to come…. best to you all.
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