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The Futures markets in both stocks and commodities is telling us we’re in store for a candy-coated day tomorrow in the markets, all Yom Kippur expiations aside.   Many a times I’ve heard “Sell on The (Jewish) New Year and buy back on Yom Kippur” as tradition dictated that many of our Tribal brethren would be out of the market for that week.

I think that may be a bit of an old fashioned play (not many of my Hebraic trader pals took off for the entire week of “the Holidays” and Yom Kippur fell on Saturday this year anyway), but it’s still useful as a historical marker and perhaps an “excuse” for people to come out guns a blazing on that first day after All Sins Have Been Elided.

What better time to start stacking venalities up again for next year, nu?

Coincidentally or not, the current bullish outlook for the market synchs with some longer term market work I was updating this weekend.  For instance, this following SPX chart looks at the Fibonacci levels of the last four years, beginning with the October highs of 2007 as “the high Fib” and the March lows of 2009 as “the low Fib.”

Note how we launched all the way back to the 61.8% retrace in April ’10,  before selling off hard to the 38.2% fib line in July of that same year?  Then we had one more run to 61.8% before retracing briefly once more and finally breaking the bonds of the golden ratio (again, 61.8%) in November of ’10.

Note however, that we never bounced all the way back to the October ’07 highs?  That’s because we’re in a bear market cycle, my skepticons, and the bad news is we ain’t done yet.

But that doesn’t mean we can’t still have fun times, even if they grow increasingly scantier, right?  So let’s look at where this current selloff has based since this summer shall we?  Well, I’ll be kippered (no Hebrew) if it isn’t the 50% fib line providing support!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

And I think that given the current position of the weekly stochastics (i.e., “oversold”), we will likely get a nice “Euroliquidity” blast here, quite possibly taking us all the back to that 61.8% golden ratio one last time at $1227 on the above chart.

As a result, I plan to continue with my large QLD position and perhaps even “enhance” it with a little TNA, here.  I will skinny my SKFlles to a mere nominal position as I still do not trust the banks, but will also eschew all other negative-minded ETF’s for now.  I will likely also continue adding back to my silver and gold miner hordes, mostly through GDX, GDXJ and SIL, with opportunistic forays into SLW, EXK, AG and RGLD.

I reserve the right to change this direction on the turn of a dime, however, if things do not play out as Signor Fibonacci has directed.

In addition, later this week, I will attenuate this chart so you can see some more specific targets for the upcoming “deluge.”  And yes, folks, it’s still coming.  And time is growing short.

My best to you all.

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Sometimes I don’t know what’s wrong with you people.   Hootin’ and hollerin’ like a bunch of purple Kool-Aid grape apes, rooting on a man’s demise in slo-mo barely contained rage.

I speak, of course, of last night, when there were more than a few on these boards who were ready to spit on a broken wheelchair in their haste to condemn we beknighted silver bulls in our darkest hour (that dark hour being about 3 am last night).   What an ugly display… and most ungentlemanly.

But these ungainly thugs were left grasping at phantoms by an hour or so before the market open this morning, when silver had fought it’s way back to just under $30 and ounce.   More important, the silver trend line held today in AGQ.   Not, as I had thought, at first support, but rather exactly at the long term trend line.

Sometimes when these things work so perfectly, it’s almost like a thing of magick (sic).  This morning, right around 10:00 am, I stood in awe as the candle bottom stopped right at the rising trend line that’s marked this bull since the ’09 Recovery, hovered there for about fifteen minutes, and then slowly — inexorably — made it’s climb through second support, all the way to that first support line.   Note the change from yesterday’s AGQ weekly:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 The bounce off that uptrend line is very strong ju-ju, especially given that we are still extremely oversold in the PM and silver sectors specifically.  We might get some “stall” at that first support line we stopped at today, or we may not.  Silver is up this evening again, although we know from last night how great the overnight swings can be in this sport.

I do think that uptrend line will be tested at least once more, unless the dollar begins to break here significantly.   If it does, I will likely supplement by adding more EXK, SLW and AG to the port.   One thing is for sure… you have your line in the sand for all major stops, whether mental or fixed.

Best to you all, and try not to let the hatahs hate too much on you.  It’s hateful.  😉

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Save That Schit For the Morning After

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A funny thing happened whilst I was away from the office today (for the second day)... I got murdered.   Usually when I’m out and about the market is pretty accommodating, like an Edwardian butler in white gloves and tails.   He  may give me a light workout, just enough to suffuse my brow with a light patina of salty perspiration, nothing more.   Even then, he’s there to hand me my plush towel and smoking jacket at the bell.

But today I was accosted by a gang of wiry Cockney longshoremen in baggy jodhpurs and nail-soled leather jackboots.   Reviewing my 50% position in gold stocks like ANV and silver stocks like — you name it, but SLW was down almost 15% today — they proceeded to bash me about the shoulder and ribs with brickbats and lengthy cords of hard salami.  They said something about leaving my face “intact” so there’d be no questions at work tomorrow.

Nevertheless, I speak to you from traction after suffering a near 7% bullshit beating today (don’t believe me? Check out XRA’s action today, and GFYS!), and am lying here in my linament-soaked bandages, waiting for a bounce to get out of some of these damaged names, as per the plan of yesterday.

A bounce, you say?  Jake, you addled fucker, you were thrown down one too many escalators today! How say you “bounce,” pray tell?  Well, here’s clue # 1 on the $SILVER commodity chart.  It’s been almost 15 months since we last hit the 200-day EMA, and yet we hit it today.  The RSI is oversold egregiously as well:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As for the $HUI today… well, you know the sad sad end of that story.  Like Brad Pitt’s relocated Northern Irish Provisional Army man, Frankie McGuire, said to Harrison Ford’s NYPD sergeant, Tom O’Meara  in the 1997  IRA potboiler, The Devil’s Own —

“Don’t expect no hoppy endin’, Tom.  It’s not an American story, it’s an Oirish one.”

Yes, and it appear’s our Baby $HUI ended up just as perforated as young Frankie did at the end of that movie.   What’s more, it looks like there’s still some room to travel even closer to Hell:

But don’t cry for me, Argentinians.   I am getting up and hitting back twice as hard, Chicago Politician-style.  In fact, I swung a haymaker at a bunch of AGQ this afternoon a little too early, at $175 and got stopped out.   I may grab some more on the open tomorrow though.   Also, respecting The PPT and it’s historically oversold levels, I dumped out of half of my TZA hedge and loaded up on a very large dollop of TNA at the close.   I may even add to that if we have a last blow off tomorrow morning.

Don’t let the Man get you down, folks.   Let’s hang together, as we sure don’t want to hang separately.

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Not to be overBEARing, but it looks like the US Banquing sector is going to have a rough time of it in the next couple of days.  Why not take advantage of that turmoil by setting aside some silver and gold for your posterity?

Besides, who wouldn’t want to kick “JP Morgue” in the teeth by buying silver, or so the old wives tell it?
I’m not going to tell you to do anything I wouldn’t do, so I’m not imploring you to go out and swamp your local numismatic dealer with pleas for hard bullion and coin.  I think this should be a part of your overall portfolio, but I think there are adequate substitutes still available under our current very liquid market system.   Unlike our fellows above, I don’t believe SLV and GLD are “false flag” operations designed to trick one out of one’s natural incentive to purchase physical.

I could be incredibly naive, but I trust the current rule of law enough to believe the audits of these depositories are valid.  Why?  Because the idea is too much of a moneymaker to allow it to be waylaid by a lack of credibility.  Both SLV’s iShares and State Street (GLD‘s parent) have too much invested in barriers to entry here to screw up a good thing with a fraudulent audit.   I like to use Occum’s Razor when analyzing these situations, and in this case, the easiest path to big money is to establish a creditable physical substitute.  Why screw w. that?

As you know, I also believe that another liquid path to trading gains is in the highly leveraged miners.  I don’t have to remind you that the most highly leveraged vehicles in that sector are the royalty financiers to those miners — namely RGLD and SLW of gold and silver concentration respectively.

After that there are many names, but if you want to act quickly, you are best throwing dough at GDX, GDXJ and SIL, which are the large cap gold, small cap gold and silver miner ETF’s, respectively.   I point you to these names because liquidity will be king here, and there will be volatility on top of volatility in the coming weeks.

Be ready to snatch opportunity with these vehicles and yes, by shorting the banks as opportunistically as possible through SKF, and even FAZ if you dare.  Remember to keep an extremely tight leash on both, however, for they will turn and snatch out your gizzard in the blink of an unsuspecting eye.

Best to you all.

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I made good on my threats today, and took everything down to the 30% level on my personal accounts. 

I was up an average of almost 5% across a number of different portfolios and I finally said “enough is enough.”   I am keeping 30% invested, with the equal expectation that we could hit a precipitous downdraft in the precious metal sector at any time, just as we could shoot past $2,000 gold in an eye-blink.  

I care no more, as at this point risk avoidance has become very important to me.  If that means I miss the next $200 in gold on 70% of my portfolio, well so be it.   It’s very possible we could see a break past $50 in silver as well, and again, I’ll have no nonsense from any of you about it.   Really, I mean it.  Just shut up now.

And yes, that means I sold large chunks of AAU, AG, AUY, ANV, EGO, EXK, GDX, GDXJ, GG, MVG, NG, NGD, NXG, PAAS, RGLD, SIL and even beloved SLW.

And I blew out the rest of my NUGT as well.

And no, I am not abandoning the PM’s as a theme now, and won’t abandon them should they continue to skyrocket in flight to many more afternoon delights this late summer.   I am willing to wait for them, however, and to examine “other areas” whilst they frolic about like mad sturgeon on lady’s night at the Aquarium.

One of those “other areas” includes my old friend, Mr. Skiffles — SKF.  Along with his rebrobrate alchoholic brother, FAZ-tard, I believe Mr. Skiffles will be getting some nice exercise this second half of the year.  One of the reasons is the behavior of BAC, and now, most recently, the troubles of GS, and it’s Waspy rival MS.  

Another is the critical structural problems of Europe erupting again like plague boils on the carcass of its major banks.  This is a contagion that may yet again bolt across the Atlantic and may even explain the impolite selling vigor in some of our larger institutions.  Will the Fed be there to save their lying souls once again? 

Too big to fail, you say?   Maybe, but while “fail” might rhyme with “bail,” I wouldn’t be too sure equity holders won’t be left holding an empty bucket this time around.  Be warned, friends, storms approach.

Peace be upon you.

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[youtube:http://www.youtube.com/watch?v=7x60uLIfHJk 450 300]

Classic Dawg

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Beaten, bludgeoned, and swallowed by an African Rock Python (only to be regurgitated, and then beaten again), I stand before you gob-smacked and riven.  I’ve been selling off in drips and drabs this week, in anticipation of a pullback in the gold market, and a lesser refrain in the silvers.   I guess I should feel relieved I got rid of some exceptionally over-weighted positions in some super-volatiles like AAU and AG.

I had even  sold some RGLD yesterday — ever so reluctantly.   It’s a testament to the kind of day I had when my losses in RGLD were some of the lowest of the day at a mere 4.54%.   Many of my juniors were in the 10%+ loss range, with my beloved EXK leading the pack of ass-biters at a loss of over 14% by day’s end.  In the end, I guess I feel a bit lucky that — thanks to my increased cash proportions and my tiny hedges on SLW — I only lost a tad more than 7% for the day.

But let’s not kid ourselves, this was a shock and a murder, and I left myself vulnerable when I should have been hedging.   I know now that when my “Spider Senses” are tingling enough to make me want to cut back on some heavier positions, I should take that cue to hedge out more of the portfolio at the same time with at least sold calls.

Looking at the longer term charts in gold and silver it’s still difficult to say whether or not we are going to feel the great sucking sound again on the miners or whether we will bounce out of this dreadful day.  In some cases — RGLD for instance — we haven’t even filled gaps yet from earlier in this week.  What’s more, it looked like it could consolidate at these mid 60’s levels for a bit longer.

As for yesterday’s purchases, they were all unmitigated disasters — especially BWA — the Borg.   I’d thought I was a bit early there, and sure ‘n hell if I wasn’t. I was down well over 7% in that “toe dip” position, so I thank Jupiter’s Stone that I “went small” in the initial buy.  UPS was also down a bit over 3%, but I think the franchise name held that company up today.

Bollinger Crash Trade candidates were all over the decking today, but I think the tastiest may be the Emerging Market i-Shares play, EEM, whose twin, VWO, was the largest “buying on weakness” name today, according to the Wall Street Journal.   I believe I shall be taking advantage of that one tomorrow, for the pop play.

Off to go drown my sorrows in a half gallon jug of Hugh Hendry Blue Label Gin & Jooce (sic).

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