I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.

Thomas Jefferson, – “O.J.” — the Original Jackson (Attributed)
3rd president of US (1743 – 1826)

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With this quote in mind, I want to again call to your attention that we are approaching the “August to Christmas” gold run, which generally includes a concurrent run in the gold and silver miners, as represented by the [[HUI]] index.   Almost every year in the oughts since 2000 has reflected this run, save of course last year, when we experienced a 28% loss due to a mass liquidation of all assets.

As reflected in the 2007 portion of the following chart, you can see the $HUI broke over 67% in the August to December period.   Note that a return to the old highs ($525) would only require a 44% run from these levels.

____________________
 
I believe we should see a relatively rapid progression when this thing gets moving — from $375 to the June highs (about $405) and then very possibly back to our pre-crash ’08 old highs in the $525 area.  That kind of progression in the $HUI should mean good things for all of our precious Jacksons, including Eldorado Gold Corporation (USA) [[EGO]] ,IAMGOLD Corporation (USA) [[IAG]] , our leveraged royalty play in Royal Gold, Inc. [[RGLD]] and our gold ETF [[GDX]] whose $34 strike options I purchased last week for September expiry.

A strong $HUI will mean even better things for the silver Jacksons, as the price of gold is still well over the historic 40x silver “norm” at nearly 65x today.   Silver Wheaton Corp. (USA) [[SLW]] is my number one pick in this space, but  [[PAAS]] and even relative laggard Silver Standard Resources Inc. (USA) [[SSRI]] should be strong in this coming period.

As for non-Jacksons, I still like Allied Nevada Gold Corp. [[ANV]] despite the recent dilution, and Rubicon Minerals Corp. (USA) [[RBY]] , Golden Star Resources Ltd. (USA) [[GSS]] and [[BAA]] all look good from the junior gold side, and of course [[EXK]]   and [[CDE]] on the silver side.   I will also throw Hecla Mining Company [[HL]] out as a possibility because it tends to jump in “hot” precious markets.   Be warned, however, this last is a “trade only” position, and not one to keep even one day past its expiration date. 

If you want to buy and hold, stick with the Jacksons and a well diversified pool of juniors… one or two of those will be “lotto tickets” and the rest will be largely crap, but you will be happy for the lotto wins nonetheless. 

No excuses, ladies and gents.  It’s “sarious” (sic) time.  See you at the finish line.
_________________________________________

I know I haven’t given you a Jacksonian update in a while, so here’s last week’s results.  Note the bludgeoning in Thompson Creek Metals Company, Inc. [[TC]] due to the UBS (curse them) “bought deal” which means a “sold short” deal to those who are already holders.  No matter, once this overhead is sopped up, TC will move again, as will Teck Cominco Limited (USA) [[TCK]] .  Get these while they are cheap.

Name/			%		Portfolio	Portfolio
Ticker	21-Aug	28-Aug	Change		Value	Impact		Comments
ANDE	$        28.20	$      32.92	16.74%		$             9,940	1.00%		Big volume leap Friday. $33 is break.
EGO	11.02	10.56	-4.17%		$             9,895	-0.25%		Riding 20-day (10.49) on coil now.
GDX	39.30	40.18	2.24%		$           12,161	0.16%		Moving out of consolidation zone (>$40)
GLD	93.65	93.87	0.23%		$           10,796	0.02%		Coming out of coil as well, needs $95.50
IAG	11.93	12.02	0.75%		$           14,821	0.07%		Looks to test new highs (12.36+) this wk.
MON	83.78	83.00	-0.93%		$           13,168	-0.07%		Stuck between 20 and 200 day EMA’s.
PAAS	19.52	19.99	2.41%		$           12,006	0.17%		Breaking out of EMA coils (20/50/200)
RGLD	39.50	39.95	1.14%		$           11,039	0.08%		Closed above 200 day but lagging peers.
SLV	13.92	14.50	4.17%		$           11,779	0.29%		Nice leap on volume Friday, targ: $16.04
SLW	9.37	10.45	11.53%		$           10,150	0.70%		Nice move Friday, over $11 = free air.
SSRI	18.24	18.28	0.22%		$           10,634	0.01%		Still lagging all MA’s, and peers.
TBT	49.55	46.74	-5.67%		$             9,311	-0.32%		Broke below 38.2% fib @ 47.20, 44.90 target
TC	14.29	11.98	-16.17%		$             9,861	-0.96%		Massive dilution effect from secondary
TCK	26.73	25.20	-5.72%		$           24,315	-0.83%		RSI turning back up again, could be time.
Cash (000)	$        8.63	$    12.64	0.01%		$         12,644	0.00%		Added another $4k+ with final NRP sale
AVG (weekly)			0.40%		$       182,520	0.07%
AVG (monthly)			9.91%		Actual cash
AVG (inception)			25.14%		on cash return	21.68%

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[youtube:http://www.youtube.com/watch?v=W0qlOEKkBWA 450 300]

I was just off reading some other blogs and I’m finding that there’s quite a bit of misery out there.  You might imagine from where that misery stems, if you are wont to read more “misery oriented” blogs than this one.

In one particular meloncholy review,  I even started to feel sorry for my friend Tim, The Enchanter.   He’s a little bit down in the jowls these days because the world hasn’t fallen off a cliff as properly prescribed quite yet.   It’s a monetary phenomenon, I says.  It’s a conspiracy of Owls and black flutes, he says.   Whatever.

I’m here for some solace for the bearish and perhaps an idea or two.   My friends, we are coming to an exciting time of year and I hope you will bear with me.  September, you see, is a traditional crap pile for all that is Equity.   Something to do with the Medieval harvest payments, or the rise of the Mayan Moon, but it’s always been our worst month for stocks since your grandmother can remember.  That should make some of our Ursines, happy, no?

The good news for we Jacksons is that August comes before it, and August marks the start of the precious metal bull season on into it’s tumescent end in Happy Claus.  In other words, it’s a good idea to buy gold and silver here in Jewelry’s Worst Month because it only gets better as everyone picks out their silver pumpkins brooches, gold encrusted turkey lame dresses and platinum filigreed Christmas chokers in the coming crispiness.

And don’t even get me started about back to school.  

Let’s have a look at our friend Baby Huey ($HUI) shall we ?  Here’s a triangle you’re going to love by next month:

You’ll note we’ll be “do or die” by mid-September.  Want to make a wager on whether we break out before then? 

Now a specific pick that I really like, and have for a while, Non-Jackson though it may be.   Here’s the old chart of New Gold Inc. (USA) [[NGD]] I gave you back on May 21st, 2009:

Now here we are three months and 45.5% higher at $3.49, but don’t thank me just yet.   I think we’re getting ready to rock the Casbah in an unctious and lugubrious manner.  Checkout what chart analysis number two brings forth:

Yeah, it’s pulled back a little on Friday, but that may mark your opportunity.  Frankly, I’d be surprised if  they bludgeoned this little junior miss back to $3.25, but if “they” did, that would be a magnificent place to throw in an order.   I know I will be looking to add here on Monday, or maybe Tuesday if we do get  second day of pullback, and I will keep you updated.  

These juniors can really move with this gold bull, so make sure you keep an eye on Rubicon Minerals Corp. (USA) [[RBY]] , Allied Nevada Gold Corp. [[ANV]] , [[BAA]] and their brethren, even as you line your portfolio with sturdy Jacksons for the coming Fall (possible pun intended). 

Best to you all.

_______________

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Make no mistake, we’re still in the midst of a full out Horatio Nelson-type naval battle, here, with the combined cannonades of inflation and deflation, public & private sector debt, multi-headed “government assistance,” increasing taxation, shrinking consumption and worsening unemployment all being fired in unison at Her Majesty’s Portfolio Cruiser, the H.M.S Winship.

Luckily her sides are reinforced with a near-impenatrable alloy of silver, gold, molybdenum and all the various metallic crap that Teck Cominco Limited (USA) [[TCK]] pulls out of the earth.   For weapons systems, she’s got the finest grain elevator launchers of the fleet, courtesy of  The Andersons, Inc. [[ANDE]] , which are in turn able to switch over to ethanol firing nozzles ready to inebriate the various Treasury pirates swinging off their black ships in boarding party fashion.  It doesn’t take much.

Speaking of those Treasury pirates, Lt. Commander Montgomery Scott himself would trade all his dilithium crystals for a shot at the defense shields provided by [[TBT]] , the “un-Treasuries” which will keep our ship sound and well-tarred in the coming T-Bond puke, courtesy of our trading partners, formerly known as “Barnum’s Finest.”  Looks like I should’ve grabbed a couple more of those on Friday as they bounced right off the pullback, but I was remiss.  Maybe Monday.

In the meantime, I’m feeling increasingly good about the prospects of the overall market (at least short term), and of my gold & silver plays.  Let’s take the latter first:

That monster stick on the weekly off the channel bottom, and through the 50% fib line is giving me the warm and fuzzies.  The outrageously cautious may wish to wait until we break that downtrend line, and guess what?  You’ll still be better off than those who bought at the end of May, early June.  

 Here’s the other reason I really like the sound money plays here:

 

I don’t know about you, but I think the cards are pointing to a less expensive dollar again.  Odd, no?

For my part, I will be collecting more juniors here, including Rubicon Minerals Corp. (USA) [[RBY]] , [[BAA]] , [[EXK]] , Allied Nevada Gold Corp. [[ANV]] , and my new favourite (sic) Sir Walter’s Scott’s knight in shining armor — Ivanhoe Mines Ltd. (USA) [[IVN]] .    Of course all the Jackson’s are great as well, but especially the silvers — Silver Wheaton Corp. (USA) [[SLW]] , Silver Standard Resources Inc. (USA) [[SSRI]] , and [[PAAS]] .

Last, I think it’s imperative to realize why the dollar is getting skunked here.  Part of it is the deficits and debt we’ve already pledged to fund with the help of our suckers, er, trading partners.

 Part of it is a result of the promise of even more ridiculous legislation being rammed through Congress right now by feckless Congresscritters who are not even reading these bills.   Take a look at some of the yeoman’s  work done by retired Marine Peter Fleckenstein on the first 400 pages of the House health care monstrosity.   Really, if you were just thinking that they could get this through without it having any effect on you and your family — well, you’ll see that you’ve had your head in the sand.  

This is nothing less than the largest freedom grab in our country’s history — bar nothing, zero zip.   Try and read Peter’s parsing without getting a chill down your spine.

Last, I’ve included the Jackson Review.   I really should have allocated more cash last week.  I will do so for sure this week, so as not to continue lagging the performance of the straight stocks.

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Name/		%		%		Portfolio	Portfolio
Ticker	16-Jul	Change	17-Jul	Change		Value	Impact		Comments
ANDE	$    29.30		$     28.47	-2.83%		$              8,596	-0.15%		50 day still not out of question ($26.40)
EGO	9.20		9.21	0.11%		$              8,630	0.01%		Could be due for a little more pullback
GDX	38.33		38.64	0.81%		$            11,695	0.06%		Consolidating
GLD	91.98		91.93	-0.05%		$            10,573	0.00%		Over 20 & 50 days, but consolidating
IAG	10.05		10.22	1.69%		$            12,602	0.13%		10.60’s next resistance
MON	75.74		75.41	-0.44%		$              4,423	-0.01%		Pulled back, as expected.
NRP	22.89		23.12	1.00%		$              4,799	0.03%		Overbot, but still strong
PAAS	19.12		19.24	0.63%		$            11,556	0.04%		200 day @ 19.27
RGLD	40.59		40.67	0.20%		$            11,238	0.01%		Still under 20 & 50 day.
SLV	13.09		13.17	0.61%		$            10,699	0.04%		Back over 200 day, but overbot/.
SLW	8.39		8.48	1.07%		$              8,237	0.05%		$8.50 major resistance.
SSRI	18.76		19.15	2.08%		$            11,140	0.14%		Needs back over $19.
TBT	52.00		53.56	3.00%		$            10,669	0.19%		Will likely buy tomorrow on this pullback
TC	11.81		12.36	4.66%		$              5,798	0.16%		Getting ready to crank one out
TCK	20.03		21.06	5.14%		$            14,003	0.43%		JUST BTFO.  Likely consolidate now.
TZA	20.35		20.64	1.44%		$              4,159	0.04%		Prolly get some strength tomorrow
Cash (000)	$  26.42		$   26.42	0.01%		26,420.79	0.00%		Same
AVG (daily)				1.13%		$       175,236	1.17%
AVG (monthly)				4.03%		Actual
AVG (inception)				17.50%		Return	16.82%

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Well, in the least, it’s a bounce. And it’s off two significant indicators, which gives me comfort. The more indicators, the better I feel about taking the trade.

As you know I’m already ass deep in gold and gold miners, and the [[$HUI]] is a great indicator for the unhedged (ie, usually smaller) gold and silver miners. That said, I may try to take advantage of what I think will at least be a measured bounce here to pick up some $GDX calls. Again, the chart tells the tale:

I’m looking at the September $28’s now, as well as adding some more juniors. Best to you all.

_________

UPDATE:

I bot 20 Sept GDX 28 calls @ $8.00. Possible to add 20 more… developing. Allied Nevada Gold Corp. [[ANV]] and NovaGold Resources Inc. (USA) [[NG]] on fiah. Watch biotech grenades… [[OXGN]] stealing all the air from the room. Keep an eye on [[BIOS]] .

Second Update:

Bot 1500 of IRE @ $8.10. Probably late, but… I like the look of it.

Last, an enduring hat tip to my young friend CA for [[CAR]] .
__________

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Lot’s of comments,  and I’ve annotated some charts, but I don’t have time to fill in the commentary yet, so I’ll just throw the charts out for now.   Many of them are self explanatory… “developing…”

Markets via the Transports, daily:

And weekly, with the Fibs:

 

 

Now our $HUI— daily:

And the weekly $HUI:

Last, the Jacksonian Results as of Friday:

Name	18-Jun	19-Jun	% Change		Comments
ANDE	$   28.18	$    28.61	1.53%		Still in consolidation here. Break now $28.15
EGO	7.97	8.20	2.89%		Support @ 8, bizarre final 1/2 hour.
GDX	37.20	38.39	3.20%		Nice EOD action.
GLD	91.60	91.90	0.33%		POG flat, like all week.
IAG	9.10	9.36	2.86%		Never got below $9.  Odd last ten minutes
MON	82.30	80.73	-1.91%		A pox on Cramer. Nice final 45 min.
NRP	21.95	21.99	0.18%		Back above trend for now.
PAAS	18.59	18.93	1.83%		Nice volume today.
RGLD	41.98	43.08	2.62%		Still on trend.
SLV	13.97	13.99	0.14%		POSilver @14.23, inside day
SLW	8.30	8.63	3.98%		Triangle forming, up off the floor?
SSRI	18.13	18.92	4.36%		Nice move, but EOD red candles again.
TBT	55.76	54.34	-2.55%		Not yet filled gap @ 54.20 yet.
TC	10.50	10.54	0.38%		Flat again.   Watch for break.
TCK	16.28	16.54	1.60%		Consolidating.
AVG (daily)			1.43%
AVG (monthly)			-7.15%
AVG (inception)			15.55%
Cash ( 000’s)			$       4.61

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Adding to my [[NG]] horde here, with an additional 4k @ $4.94.  I like how it came back down and filled this morning’s gap and then proceeded to power on.    I think the junior miners may point us the way out of this recent pullback, so I will be keeping a close on them for all of us.

Note that recent Tim Knight short [[GLD]] also need to fill this morning’s gap at around $91.24.   A fill and bounce here would be very encouraging.  

Silver is also showing signs of an “inside day” candle formation , which would be good news for a possible end to this recent pullback as well.   As predicted, the $HUI is bouncing today, up about $2, off the trend line and the short term 50% retracement line.

All of these point to signs of a respite, as the dollar is off a bit as well.    Let’s be cautious, but judicious in our picks here.

Caveat: If you follow me into NG, your favorite poodle may be accidentally pepper sprayed in a police dog obedience class gone disasterously wrong.  And you may lose principle.

Update:   Even though I’m officially “full up” in the position, I just added another 2k of SLW at the lucky number of $8.88.   Serious (38.2%) fibonacci line here if it holds.    Thanks to whomever gave us the phrase “moth hands.”

Update:   New pick, bordered on the verge of Jacksonian, but too much geography risk, being located in South Africa with it’s “sorta” stable government and kooky neighbors.  Gold Fields International — [[GFI]].   Just bounced off it’s TEN YEAR 61.8% fibonacci retrace at $11.42 this morning.   That’s like a signal from above.   “Starter” position of 2k shares @ $11.67.

 

______________________________

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