Many ah-paulgies, but when I’m undah stress, my Lawn Guyland ax-sent stahts comin’ out.  Fugheddaboudit, right?  Anyways, youse can awl see dat we’re still pullin’ back ovah heah, in an egregious mannah if I may say it is so.   Sweah ta Gawd, I dint think it was gonna happen this fast and furious, like a pissed off gindaloon lookin foah his “oily developed” little sistah, but hey — dat’s dah bawl game, no? 

Anyways, I trew dat same $HUI weekly chart from last night togeddah and whaddaya’s know?  We went and hit dat top of the consolidatin’ box dere just like I said.   Here’s dah trouble.  I ain’t so shooah we’s done heah.   In fac’ — as a mattah uh fack — I tink dere’s a damn good chance we’s go to dat second line (#2) right dere at aboud $347-48 -ish.  

So tink of it as a vacation for a day or two heah, and maybe add some names you still don’t have.   But I wouldn’t sell any cawls at dis point.   Just hang on.  Weah still 21.5% up since May dah foist, so whattaya want ovah heah?   A fuggin’ Yankee Miracle, or somethin’?   Have some damn patience.

Onna mattah of [[TSO]], that motherless whooah:  She is on my last noive, ovah heah.   I don’t feel good tellin’ youse ta accumulate her, heah, and so’s I tink maybe dat means “she’s out.”   But she’s only down 5.25% since May 1st, and I figgah we oughtta give her til 8%.    If she can’t pull outta dat tailspin, den we send her packin’.  Agreed?    Let me know what youse tink aboud mebbe replacin’ her with [[PTM]].   [[GG]] and [[AUY]] ah also on dat ray-dah screen, but NOT CRAAPL, ya heah, wiseasses?

Note dah notes, and have yahself a nice beeah and a good night.

_________________________________________________________

		3-Jun	% Change		Comments
ANDE		$    26.51	-1.23%		Lightest pullback in the portfolio
EGO		9.54	-5.82%		Got some more today @ $9.35
GDX		42.16	-5.36%		$HUI retreated to $370 today, target #1
GLD		94.41	-2.02%		Gold now $35 away from $1k
IAG		10.39	-7.23%		Watch for Friday’s gap ($10.04) tomorrow!
MON		81.50	-1.45%		Not killed today, still lagging.
NRP		23.34	-3.95%		$22 very possible (38.2% fib line)
PAAS		22.33	-6.41%		Filled Friday’s gap, I bot more @$22.05
RGLD		45.58	-4.56%		Known for volatility, trend line @$44.90
SLV		15.14	-3.87%		POS dropped 60 cents today
SLW		10.56	-2.85%		Impressive rebound today. Has not filled gap yet
SSRI		23.04	-6.61%		Pulled back to top of cup, TL@ $22.10
TBT		53.99	-1.84%		Continuing struggle with the 10-year
TC		9.34	-10.11%		Should’ve sold the calls, dammit! Support @ $9-
TSO		15.17	-13.31%		Down 5.25% since 5/1 – close to tossed
AVG	AVG		-5.11%

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[youtube:http://www.youtube.com/watch?v=G1Qvnixz1TE 450 300]

Not so bright, but a good guy to have around when the Fox is in the hen house!  (No really, that’s a metaphor… really!)

The Amex Gold Bugs Index (AMEX: $HUI) is one of my touchstone index’s for my precious metal portfolio.    The $HUI contains mostly unhedged gold mining companies and a couple of crappy silver miners (CDE and HL) , who don’t really serve as good representatives for the silver mining community (unlike Jacksonians SLW, PAAS, and SSRI). Jacksonians Core gold holdings [[EGO]] and IAG are members, however, along with “possible” new entrants GG and AUY.  The full fifteen components are listed here.

Because of it’s silver component, I find the $HUI even more useful than the ETF GDX as a precious metal miner index.   So let’s have a look at the daily and weekly charts to see where we are:

As you can see from the chart, the current daily is showing signs of a pullback, likely to the 20-day EMA at $323 to $325.   This is perfectly healthy — and in fact welcome — given the recent drive to the long term resistance line pictured.   I expect it won’t be long before we are above that line and into the free air described in the “breakout zone.”

As for the weekly:

You can see we have broken above the long term downtrend line on the weekly chart, and are also seeing a bullish cross on the 13-34 week EMA’s.   The midweek doji indicates we may test lower, but again, it looks like we are headed out of the consolidation zone soon.

Last, I annotated the long term weekly chart of SLW just for shits and giggles, to show where it is in relation to the $HUI weekly above, and to point out some obvious (from a weekly prospective) target zones.    One thing I would point out is the long term fib lines show the 38.2% retracement line at $9.02, which we tested earlier this week.   Again, it’s perfectly natural to have the price level turn away at that important point.   Given the strength of the $HUI,  however, I expect that $9.02 will not hold twice.   Viz:

I will try to get back later tonight to update the Jacksonian Core performance stats, but I have to run to pick up one of the boys from lax practice.    You know, “the aerobic baseball?”

Best to you all.

_____________

Jacksonian Core’s Performance  for 5/14/09 was largely flat, with ten “down” positions keeping their losses in the pennies.  On the other hand, of the four stocks in the black today, two —ANDE and TSO– were up over 5%, making it a market neutral day overall.:

ANDE — $20.88 (+5.51%)

GDX — $38.05 (+0.29%)

GLD — $91.03 (-0.07%)

IAG — $9.78  (-0.91%)

PAAS — $19.20 (-0.31%)

RGLD — $40.56 (-0.10%)

SLV — $13.85  (+0.29%)

SLW — $8.84  (-0.11%)

SSRI — $19.89 (-0.22%)

TBT — $48.94(-0.71%)

TC — $7.63 (-0.90%)

TSO — $17.21 (+6.96%)

Have a nice evening, all.

_____________________________

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What the hell was going on with my silver and gold plays today?   Something sneaky I thinks, my preciousss, yes…. verrrrrry sneaky, it is, yessss! <Gollum>!

A lot of people who watch these things were commenting on the PPT and elsewhere about the noticeable surge in end of day trading on almost every major precious metal play, both gold and silver.   What people may not have noticed, however, was that a similar surge — of similar length (timewise) was going on in the 10 a.m. to 10:30 a.m timeframe in those same names.   Let’s take a gander at today’s [[SLW]] 5 minute daily chart as our first example:

First, let’s note that there are 78 5-minute periods in a trading day.   In most of these examples we are talking about only 8 or 9 of those periods, because of where this buying phenomenon was taking place.   What was notable for me was WHERE these buys were coming in.   Conventional trading wisdom tells us that “the big money”  — meaning the institutional traders– will generally make themselves known in the very beginning of the trading day and at the very end.  

The first period of activity here is right at the 10 a.m. hour which is not literally the very beginning of the trading day, but perhaps marks the period where most seasoned traders begin to take positions “after the morning shakeout.”    Given that this is a Monday, and we had a relatively large negative futures position trading at the open, this explanation of “wait and see” makes some logical sense.   The uniformity across the sector also gives some indication of a coordinated purchase here,  as there were very few large well traded names in the precious metal sector that did not see some kind of activity in the 10-10:30 area this morning.

Note also the last twenty minutes of the trading day.   We can ascribe some of this scramble to short covering, of course, but large late day purchases generally bode well for tomorrow’s trading in these instances.   I believe that is so because institutions are clearing the way here for more explosive action in the next few days.    Keep in mind that the four five-minute candles (or, 20 minutes in total) we see make up only 5.13% of the trading day, but are responsible for 10% of the shares traded.   Again, I think this is significant not only because of the volume, but because the rapid ascent and the sharp upturn of the A/D oscillator shown in these last twenty minutes also indicates that most of that volume was buying at the ask.

Let’s look next at fellow Jacksonian Silver pick  [[PAAS]] :

If anything, the two moves in PAAS are even more significant in both price and volume, compared to the rest of the day’s trading.  The four five minute candles from 10:10 to 10:30 a.m. comprised 13% of the day’s trading and reflect a large buying program, as the price ascended rapidly.    The rest of the day consisted of light volume pullback until again, the last tweny minutes gave way to almost 20% of the day’s trading, and another rapide ascent in price.   All tolled, those forty minutes (10% of the trading day) of buying accounted for one third of the daily trading, and again seemingly almost all “on the ask”  — figuratively, if not literally.  

Let’s look last at New Jacksonian Holding [[SSRI]] :

SSRI shows a full half hour of buying in the morning, again, starting at 10:10 and concluding at 10:40.   While this morning purchase was not market by the same volume as PAAS, it again shows the rapid ascent characteristics of a persistant buyer or buyers behind the bid.    That half hour comprised about 11.6% of the daily trading (in about 7.7% of the time) and the “afternoon session” was limited to a brief fifteen minute period that was marked by increased volume and another very rapid ascent.     In that fifteen minutes (less than 4% of the trading day) we saw over 12% of the daily buying.   Again, I think it’s clear we are talking about a concentrated interest here in this final burst.

In the interests of saving time and space, I won’t go through the Jacksonian gold positions that saw similar patterns today.   Interestingly, not all of the golds — particularly the smaller cap names (like [[EGO]] and [[ANV]] ) — saw the 10 a.m. buying, at least not in the same consistent fashion.   However, they all saw the late day surge in purchasing with ANV seeing a full 23.7%  of it’s daily buying (along with a 4.5% price move) in the final 15 minutes!

We find the same morning and afternoon program purchases that we saw in the silvers above in Jacksonian pick [[RGLD]], with 10% of the daily trading between 10 and 10:25 a.m. and another 15.5% in the final 20 minutes of trading.   [[GG]] shows a very similar pattern, as do many other of the “big golds” like [[AEM]].

I guess in conclusion I’d posit that there’s something afoot here, friends, and that you should be attending to your PM positions, as I think we may see a more significant move here in the coming days.   Of course, we may not, and all of this coincidental analysis could be the result of  my rampant apophenia due to excessive exposure to William Gibson novels.    Nevertheless, I believe this action bears consideration and careful attention.

Be well, friends and enemies.

______________

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A reader asked me about Silver Wheaton (SLW) on the pull-back today, so I figured I’d take a second to show you why I like silver here for the “secular bear run.”   Let’s start out with an interesting chart  {$SILVER:$SPX}  which plots silver against the S&P 500 since the start of the dot-com meltdown:

  As you can see, silver has been on a bull run since about April of 2002, when it crossed over the 200-week moving average.  Even through the subsequent four year bull cycle of 2003-2007, it continued to outperform the S&P 500 on a trending basis.   What’s more, this ratio has never become oversold on an RSI basis (below 30), with only two trips in that period below 40.  The ratio is also showing a possible turn (vs. the $SPX) on the slow stochastic as well.  Silver is also cheap compared to gold, with gold currently priced at 73 times the price of silver (as of 3:00 today).  The traditional “classic” gold/silver ratio was that held from the 17th to the 19th centuries was 16 times, and in 1980 the ratio at their respective heights was about 17 x, when silver spiked to $48 an oz, and gold to $850.   Inflation adjusted, we’d need to get back to $129  and $2,200 an oz. respectively to re-acquire those heights.     At double the 16 ratio (ie, 32x), however silver would still trade at almost $28 an oz. even with gold remaining at it’s current price! 

Now to a silver mining stock dear to my heart.   Let’s face it, most publicly traded silver mining companies are run by inbred families of feuding Romanian dwarves more interested in “Friday Night Rasslin'” and trading silver shaving for Natural Light 30-packs than they are those boring “balance sheets” and “income statements.”     As a result most silver mining companies tend to frustrate investors even in good times for precious metals.   

Silver Wheaton is different.  It’s run by the same cockney Canuckistanian cads that brought us Wheaton River Gold, the successful gold startup that eventually took over Goldcorp (GG).    The Wheaton River Gold guys have done what they’ve said they’d do now for almost ten years running, which in precious metal mining circles is the equivalent of a weekend full of “36, Winnah!”s on the roulette wheel in Vegas.   It so much doesn’t happen that I’m researching the theory that they are in fact, Raelians sent to make those of us worthy enough (and who purchase the proper sneakers), rich.    Ack! Ack! Ack-Ack!

See the annotated chart below — where SLW has finally filled that gap that’s been driving me crazy for weeks:

CAUTION!  Investing in Precious metal miners is NOT for the faint of heart.    While I think that SLW and PAAS are two of the best out there, that’s like saying I find the Phillipino black mamba and the South Rhodesian Stuttering Asp  the most appealing of deadly poisonous snakes.  I recommend a basket of miners in both gold and silver, as well as a core position in SLV and GLD, and the “fizzical” metals themselves.   These are shelters in the storm, but they must also be watched.   Build positions judiciously, and sloooowly.   I will go over additional miners as we move forward with the Silver Surfer.   Best to you all.

__________

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