Saturday, June 4, 2011

EPU

Boy, am I frickin' happy I didn't buy any EPU this week! Humala wins, the stock market collapses, rag-tag bands of upper-class Peruvians flee over the border to Ecua... um, Boliv... uh, Uruguay, carrying their bags of gold.

I guess if EPU can barf all the way down to 30-35, it's a screaming buy. And that's just where it was last fall, with nice visual resistance, so it should probably get back down there at least. Like the smart guy says, buy Humala and sell Keiko, right?

RIO should still be a slam-dunk, eventually, and I don't see why FVI should tank much if it's not cross-listed in Lima (tell me, it's not listed in Lima, right?... oh crap, FVI's listed in Lima too); but boy am I happy to not own any DNT or SUE.

Ha ha! Oh well, the best laid schemes of mice and Otto do indeed sometimes gang aft agley.

Your prediction sucked, Otto! :-)

Movie review - Zombieland

Zombieland Sucks. It's no Shaun of the Dead, nor 28 Days Later.

#1: realism. Why, in a post-apocalyptic America ruled by zombies, is there still electricity?

#2: Bill Murray doing a cameo totally jumped the shark.

Don't waste your time with it.

James West on BNN

Hey! James West made everyone so much money with SFF and GNH. Truly Wagnerian picks there. Let's see what he's recommending this time?

Friday, June 3, 2011

onion news

Aw heck, here's some more Onion News.

















meanwhile, some bullshit

The Onion is always a fantastic source of hilarity.

Watching this clip has forever destroyed my enjoyment of TV news. Now all I'm going to do is watch it over and over again for the same result.

I was looking for some Star Wars footage on Yooboob to illustrate my having brought another foolish investor to the Dark Side (i.e. actually making money instead of dumping his dough into dead-money pennycrappers like GNH), when I came across a large number of fairly okay Star Wars spoofs.











Market Oracle

I was just poking through Barry Ritholtz's blogroll and think I might have found a real gem - Market Oracle.

It's a .co.uk site, so isn't nearly as full of gloom-and-doom Weimar Zimbabwe von Mises bullshit as most American blogs. It carries a whole load of articles every day, and has a free newsletter apparently.

I'm liking what I'm seeing there so far. I need to get away from idiot American analysis (which is almost all written by cryptofascist libertopians with an axe to grind) and into more mild-mannered Western analysis.

Now all I need is to buy a Blackberry Torch, and get it set up with RSS, and I'll have a 24-hour-a-day newsfeed right in my hand.

PVG

Well, Pretium flew up from $8.50 pretty quickly, eh? You're welcome.

Sunward looks good on some hitting of the asks. Seems people want in, even on a bad market day.

And what about that market? Hm? Here's the bad news:

  • jobs report sucked

  • what if China slows down OMGWTFBRB?

  • commodities are collapsing, supposedly!


And yet the market opens at 1% down and starts crawling back up? The market is not reacting sufficiently negatively to supposedly negative news. And that is why I'm not expecting an S&P print below 1250 at this point.

Here's some RIPs for you: Macusani Yellowcake, 25.5 cents. Opportunity yes/no? Dynasty Mining, $2.70 for crying out loud! Stick a fork in that one.

So any opportunities in this market? GUY is moving back down strongly... maybe you want buy some at $8 or so? $8.40 would be a safe entry with probably less than 5% max possible drawdown. But you don't know about the $HUI yet.

FVI? I dumped half my BTO for a small profit to buy some more FVI at $4.75 or so... dunno if it'll fill, don't mind anyway. Grabbed some USA at 0.50, which is a no-brainer move really. BTW, I think the one thing USA has going for it, from a day-trader's perspective, is the weekly 10% up and down moves. And seemingly solid support at 50 cents. As long as silver doesn't collapse on us....

mwahahahaa!

The H&S is showing up in the $HUI.

Funny though that it seems to always struggle back to the SMA(200).

PVG (Pretium is it?) looks like a good short-term trading deal at $8.50 - lowest price was $8.30 before, and it tends to spring back up to $10 pretty well.

But me personally, I have under $20k left in cash, and woul like to hold that money to average down either my FVI position or my US Silver position in case of extreme weakness upcoming. There's really nothing left for me to sell. Even BTO looks good today.

AMM (Almaden) also looks very weak. But I wonder if that big price dive on May 17 was Brent Cook calling a sell on the stock? See, I don't subscribe to him so I have no way of knowing why it dove so bad. Right now AMM is in a pretty brutal downward channel, and has already broken its prior March low. So, with previous personal experience as a guide, it's not something I'd buy.

TSE:U is always a good by at $6.30, it seems.

Lots of good deals out there. But we have to figure out what's happening with mining stocks, where the S&P and Nasdaq are going (down 1% this morning), and if the summer correction will be minor (say S&P 1250) or major (say S&P some small nonrepeating decimal).

Just because I make fun of the gloom brigade doesn't mean I completely ignore them. Hey, once every few years they're right.

Thursday, June 2, 2011

Friday video cavalcade

I was going to do a lot of things, but then settled on the idea of mellow music.

Here's the Cowboy Junkies, a Canadian band who at the height of punk slowed down the tempo tremendously. Honestly, when they played, you really were allowed to bring in a beanbag chair.

Unfortunately either I can't find any of their videos that are slow enough to really get their idea across, or maybe it only seemed slow back then in the hectic age of the 80s. But here they are covering Neil Young's "Powderfinger", which is a great song in itself.



Part of the reason I might not be able to correctly remember Cowboy Junkies' slowness is that they started a powerful trend - slowcore really began there. It kinda reached its apotheosis with Mazzy Star.



Which, for pretty much no reason, because they're not slowcore in any way, leads me on to Cerys Mathews and Catatonia, and a song that's good for anyone in Canada who's just suffered through 8 months of howling winter....



Ha! For the heck of it all I did a search for Antenne, a very obscure Danish duo - Kim Hansen does most of the music and electronics, and Marie-Louise Munch the vocals, and they really distilled ultra-slow to a brand-hew artform. And know what? Someone did a fan-made video for their song "Whispering", which is nothing but 9 minutes of what the European sissies call a snowstorm, or as we in Canada call it, "a pleasant light snowfall". Very fitting, actually.



Which led me to an actual video for something off their 3rd CD.



As is typical for any band doing anything really good and striking and original, they probably don't play live, or even record anymore, since Kim probably makes a load more money working for Danish radio.

Back to Canada, and this last is not even a video - just an mp3 with a still shot of the album cover. But to me, this is one of Canada's greatest and most underrated acts, Courage of Lassie. I loved this song 20 years ago and would do anything to get a copy - but unfortunately, even the record label, which was Canada's greatest and most underrated, went under something like 20 years ago.

But the song is really beautiful and a must-hear.

ideas for stocks to watch

Here's some stocks that might provide a profit on the short-term fear trade.

KAM - Kaminak gold. Is it possible to get some at $3.20 soon?
PGM - Peregrine Metals. Do you thnk .90 is possible?
GPM - Guyana Precious Metals. Very little L2 support to .14.

Of course all this depends on the $HUI H&S not continuing past this weekend.

FVI back down

Silver's dropping scarily. So now FVI's back down to $4.81.

Hey, I bought FVI at $4.81! Then sold at $5.07. Now I can buy it back below $4.81? Hm. That sounds like a good idea... let's just let the $HUI keep painting that head & shoulders pattern though, so's I can get max return on the fear.

I should put up a chart first to see if it's even a good idea to buy now.... there's horizontal support at 4.80 or so, which we're going to bust through if the $HUI and silver keep looking bad. Then there's a local low at $4.50. Maybe I should wait for that? I doubt silver will stop dropping before $35 at least. Pft, that's less than $1 away. HZD might be a good play right now.

But what am I going to sell to free up all the money I need to buy back a good position in FVI?

I'm not denying FVI's a good stock to own at any non-specific moment - but at this very moment in time, I feel the only good stocks to own are RIO and SWD. And maybe USA for coming earnings announcement, possibly BTO since it doesn't seem to want to drop any more, and there's no point in dumping AUU.

RIO going back up?

RIO's moved 350,000 shares in the first 20 minutes, moving back up towards $2.30. Looks like someone's desperate to add it back in very large quantities.

If I've lost my opportunity to add RIO, I'm fine with that. I don't need more shares than I have - the darn thing's 1/3rd of my portfolio already! - and I'm okay holding 20% cash while awaiting an opportunity either to add USA below .55 on silver weakness, or BTO below $3 if it continues to drop.

$HUI's retracing upwards a bit today. I care very little about $HUI's direction in the first half hour of the day - that's usually its strongest time.

We'll see what opportunities Friday brings!

Wednesday, June 1, 2011

Educational mining videos... or are they?

I was poking around Youtube looking for cute kitty videos, when I decided to go look for more educational stuff on mineral exploration.

I came across this set of educational videos titled "Mining 101". Nothing much I don't know, but still thought I might post them.

Then I saw that this one was the first in the series.

Hey Otto! Your buddy is edjamacatin'!



Here's the rest for the hell of it all.





With all the Ernst & Young trusses people are wearing, it looks like these were shot at PDAC.









But if you prefer, a certain evil Swedish hacker website has a 30-part video lecture series by The Teaching Company, titled "Nature of Earth: an Introduction to Geology". It's about 4GB.

And National Resources Canada has a whole stack of videos freely available to download, courtesy of us the Canadian taxpayer. Here's the whole list.

I haven't watched them yet, but if it's anything like the famous Canadian Film Board production titled Hinterland Who's Who....



And, by the way, the band Boards of Canada was formed by 2 electronic musicians from someplace dismal like Scotland who spent a few years living in someplace yet more dismal like Alberta. They were inspired by the music from Hinterland Who's Who to make electronic/IDM music that was warbled and muffled just like the Canada Film Board movies they'd see on public TV.

Like you can hear in this YouTube upload of Disengage. Just let it roll for the whole 55 minutes, it's an adventure in music.



BTW, Boards of Canada basically decided to dump the muffled incomprehensible music after their album Music Has the Right to Children. I.e., after that album they became nothing more than a Legion of Green Men tribute band:

RIO

Funny thing.

RIGHT at 3:59:59, about 10,000 lots worth of new bids came up for RIO in the L2.

Dunno what that means. Is someone betting it stops going down tomorrow?

I've got my order in for some more shares at a much lower price... I was kinda hoping we'd see RIO collapse Friday afternoon as all the rich of Peru prepare to flee in the dark of night across the border to Uruguay, carrying their bags of gold, to escape the coming brutal Maoist dictatorship.

I'd buy RIO Friday afternoon without a care who wins the election, because I know even under a high tax regime it's worth way more than $3 even. Because I did the math. And posted it on this blog.

Speaking of things I posted on this blog... see $HUI's action? Hm? So now does it fall to the EMA(10), or to the SMA(200)? Not much diff between the two. I actually think it should hit the latter, and go a bit lower, just so that all the newsletter writers who rely on the $HUI can tell everyone to get the heck out of mining stocks because an ominous H&S is appearing.

As for manufacturing & unemployment numbers - why is it the only people who care are the doomsayers? The big boys all say "ho hum".

Post #100

So, RIO's dropped all the way below $2.20. And $HUI is finally starting to go down. The broad markets are down over 1% right now.

I unloaded all my FVI, as nobody seems to give a crap about their news today, and also because it looks like silver will be going weak for a bit, and also because it looks like $HUI's finally rolling over, and also maybe there's dumping due to the Peru question? Oh, and also because it was at a 5% profit and right now I'd rather have the extra cash.

RIO's dumpage is completely unreasonable, which maybe means I can get more for extra cheap soon. If $1.80 was a good price before, maybe I'll try for $2 this time around so my average is still under $2.

So, new plans.


  • Forget about buying more BTO for now.

  • Opportunities to watch for will be USA at .50, and RIO at $2. I'll be all over those two like bad smell on a fart. My first choice is RIO at $2, because silver weakness might negate any positive punch USA gets from a good quarterly.

  • Second-best situations would be FVI back at $4.80 or so, or BTO at $2.80. Though I doubt I'll get a chance at either.

My portfolio's down heavily but mostly that's caused by RIO's big huge dump. Oh, if only I'd dumped half my shares at $2.70! Idiot. Got too greedy.


Tuesday, May 31, 2011

OH AND BY THE WAY

Just checked in with Turd Ferguson.

So go look at USD.

Go look at oil.

Deflation impulse feh.

BTO chart


Again, a chart of BTO. The green is what I predicted in my infinite genius, just on Sunday, and it's on record here for everyone to see.

The yellow is what frightens me.

Actually, the lack of volume this time round also frightens me.

The red is a lower trend line, but an even shallower one is the SMA(120).

Why did I put the EMA(20) in there? I dunno. It should have been the 10 or something. Oh well, last time we hit the EMA(20) in the green highlighting, that was about the extent of the decline. Sadly, that came with a decline in the $HUI as you see on the bottom. I'm assuming we're not going to see a $HUI decline this time around.

Any reason why chart patterns should reproduce? Probably not, in fact that pattern's just there to screw me out of money. Any reason BTO should fall below $3, maybe even hit $2.70? I dunno, but it was there in March, when the $HUI was higher than today.

Probably was a very dumb idea to buy at $3.20 when I could have waited. See, this is why I should remember to keep some cash on hand, not but the first thing that pops into my head.

RIO chart update


So RIO didn't like going parabolic and settled back down.

the straight red line is where I'm happy, the yellow dots are what frighten me, and the green highlighting is where some guy bought 4 million shares over 2 days sending the price way beyond support.

That green bit makes me happy.

Anyway, RIO bounced off heavy resistance around $2.70. So I guess we can't hope for >$3 in the next week....

HUI?

Funny, looks like HUI ended the day pretty strong.

Anyway, further to last weekend:


I had said gee, that descent from Dec 2010 looked a lot like what we just went through in May. The MACD(12,26,9) (to the extent a completely arbitrary technical indicator means anything) looks the same too. Even hit the same bottom. So did the RSI(14).

When $HUI started to go back up in January, it first got through the EMA(10), which was resistance on the downmove - then it bounced off the resisting SMA(50), magically printing a red dot on my chart. Then it went back down to the EMA(10), which acted as support, and also gave it another magical red dot. Then it bounced back up and crossed the SMA(50).

I don't have the foggiest why an index of a bunch of miners should care about manmade moving averages.

I also understand that patterns shouldn't repeat in something like this, because then any old fool could make money on the markets. But hey, those 2 descent patterns look the same to me. If things act the same this time around, $HUI very well could in the next couple days advance to 562 or so intraday, then spend a few days diving to the EMA(10) which by that point would probably already be at 545 or so. Probably dive a bit under just to frighten everyone, maybe even print a really bad Friday to give the newsletter writers something to mull over while putting together their weeklies.

Maybe it doesn't do this. The advance from the May 15th bottom is a lot more orderly this time around - the Feb advance seems to have been a lot of heavy up and heavy down days. We've had a lot more small candles.

And then again, maybe it does move back down to the EMA(10), and then plunge down horribly to some scary number?


This "head and shoulders to disaster" would be the favoured scenario of, say, bloggers who think that just because the US debt-to-GDP ratio has reached 26% that of Japan, 58% that of Singapore, 75% that of Germany (!!!) or 83% that of Austria (Austria for crying out loud! land of Austrian economists!) that therefore the S&P must crash to some small decimal number, and we'll have to load up on .22 ammo and silver rounds as if you'll find it easy at all to trade precious metals for boots and electric motors and soy meal and... sigh, that's a rant for another time.

Thing is, what's supposed to be the reason for PM miners to do a head and shoulders collapse? Hm? A broad market disaster? I thought we're not supposed to see major corrections (i.e. bigger than 20%) in a bull market. In fact we already saw the bull's 10% correction, and there's only supposed to be one. I think Ritholtz said that.

So, then what? Gold and silver collapse in price? That'd hurt the miners for sure, but why should that happen? Cuz real interest rates start increasing? Not in the US.

Cost inputs skyrocketing? I dunno, maybe. A skyrocketing oil price would mean we're back in the 1970s, and that's my own inkling of where the future's taking us. But... come on, this summer?!? I think we have a while to wait before stagflation really kicks in.

I feel so professional... I've given 3 different scenarios for the $HUI over the upcoming short term. Committing to absolutely nothing. But at least now I have some idea about a possible near-term downside, and I know not to be scared til I see that magical EMA(10) support get failed with a capital Feh.

HUI about to turn down?

Yamana, Minefinders, Guyana Goldfields and B2Gold all looking weakish today, despite the broader indices looking positive, gold flat and silver up over 1%.

So, with the $HUI having almost approached the SMA(50) and turning back down to possibly close lower today, maybe we'll see the $HUI drop all the way down to its EMA(10) sometime this week. Which won't be far, but it'll be one slightly negative period where maybe stocks can be bought for a few pennies cheaper.

This sort of near future meshes with the idea from that weekend chart post that I might be able to get BTO for $3 (or less, probably not less though) in the next few days.

I still say its intermediate trend is up, but I'm in no rush to buy any more gold stocks today with the money I made from dumping EST into the bid.

brieflemmings

A certain fantastic fellow with a nonzero following of impatient investors just put out a call on (yet again) a brutally illiquid stock. So today I sell to the impatient people at .95 and buy back over the next week or two at .85.

I actually didn't have much of a reason to hold this stock, or at least I was wondering the past few days why I was holding it. If I don't know why I'm holding a stock at any moment in time and I get a chance to liquidate for a 4-figure profit, I'll take my opportunity and move to another stock that's more impressive to me.

This actually reduces risk! That's because, on a bad market day (like yesterday), I will be less likely to dump a stock that I like when it shows a drawdown. That means when the stock goes up (like it's guaranteed to eventually do, esp. with BTO or RIO), I don't lose out on possible profit by getting scared out of the market.

Your own psychology is a major component of your portfolio risk. Too bad more economists don't study proper psychology or sociology, otherwise they'd know this. Portfolio risk is largely dependent on the characteristics of the portfolio holder.

Monday, May 30, 2011

yesterday's charts

Well well well. Yesterday's chartie prediction post has come back to haunt me. RIO dumped a fair bit, back into its previous ascending channel. BTO looks like it's rolling over. And SWD pretty much had no volume.

If I were any more clever I'd have actually sold them.

But to tell you the truth, I want to see what the action looks like on Tuesday, when the US is open for business again. For example, the stupid Peruvian BVL lemmings puked a million shares of RIO into the market on a day when only Canadians were there to catch them. What would have happened if the Americans were around to buy?

As for BTO, well, again, there was no buying volume, and selling volume was also pretty miniscule.

It certainly would have been nice to have dumped my RIO at $2.70 though. That's what I woulda done last year. Oh well. Buy and hold means it's easier to do my taxes at the end of the year.

Sunday, May 29, 2011

DMM chart

Here's one more chart:


I look at this and think "Gee, $3.15 seems like pretty good strong support."

Then I look at February and think "Gee, $3.60 also seemed like pretty good support: but then look what happened."

Still. Any reason why this should collapse below $3.15?

I guess DMM's been a dead money stock for so long, it'd make the whole market piddle themselves if they finally put out positive newsflow. Nobody'd be expecting that from this black hole.

some charts



I'm only posting these to see if my charting is good enough to make predictions for the next week or two. Let's see if I'm mister fantastic chartie predictor! I've been at it for a whole year! How good will my predictions be?


RIO went parabolic for a couple days this week. Punched thru some resistance, bounced off an all-time high. I'd get worried if it dropped back below $2.50, or even fell below the former ascending resistance trendline thingie that I pulled out my ass and put on the chart there.

Of course it could just move along horizontally til it gets back into the ascending channel. The lack of volume Friday was fine, since it's memorial day weekend and I'd also assume Peruvians wouldn't be in the mood for buying until they got their last poll results (which, um, don't look good for Peru stocks come Monday - we might see a fast decline, and worse, we Canadians will be expecting the Peruvians to hand us a fast decline).

So expect the possibility that RIO collapses Monday. If you don't see a stampede for the exits on BVL open, things immediately look better.

Conversely: look at the late December price action, versus this week's. Back then, there was an mid-December topping/petering-out, but it was followed by a very fast 50% pop as the organized crime syndicates (i.e. investment funds) padded their portfolios with RIO. This month, we had another petering-out, followed by a skyrocket again. Perhaps the institutions are padding their portfolios with RIO yet again?

When you look at that formation, it might mean not just a skyrocketing to $2.70, but maybe a 50% move off the base of 2.25 - that'd target $3.38, and Otto'd get most of his target price in the space of a month or two.

So, who the hell knows?

RIO's also finally begun outperforming EPU, the Peru ETF. Hopefully this disconnect continues. I'd get worried if RIO all of a sudden crashed back to following the EPU. That'd mean a collapse to $2.20 or worse. No way am I giving back all that money I've made! I'd dump if I saw RIO begin to underperform - which it would do with a vengeance I expect.

Hm. reading all that, really, my best-case is a quick flash to $3.35 and I'm out on a near double in a few months, my mild-mannered case is RIO skims along $2.70 forever, and my worst-case is a 20% dump or more. Frankly, without a convincing breakout above $2.70, there's no reason to hold this thing at this very moment.


I'd like to see BTO challenge $3.50 again. Push the top of that triangle up. I've highlighted that hump in March, because the downside scenario might be that BTO draws something similar, back to the bottom of the triangle anyway, or at least a flop back down to the SMA(50). Now, if that happens, can we get another March-to-April type rise afterwards? Could we get that amount of oomph from their pending drill results, do you think?

Hm. No real chartie reason to hold BTO, either, unless it can hold ground and then bust thru $3.50. If it goes weak I might be able to buy it back at $3. We'll see.

SWD up to Wednesday actually looks like crap warmed over, then cooled down and solidified into a muck that takes hours to scrape from the pavement. But the downward channel, caused by insider selling, has been broken to the upside as of end of this week. The bottom, $1.20 or so, is also where it was 5 months ago, which is nice, that'd probably be the absolute bottom which is just a few percent below my buy-in price.

Actually, if I were a bottom-feeder, or even prescient enough to actually look at the damn chart before buying a stock!, then I'd still never have touched this stinker.

Is $1.60 resistance, or can we see $2.10 again? Then again, it's been rising on no volume. Then again again, if we can see December 2010 volume again (500k shares per day), this thing could take off pretty quick. Would the expected impressive Titiribi results create that much volume?

I think if I see it drop below $1.45, or worse drop back below that very frickin' sharply descending channel line, I'll consider dumping what I have. But thankfully, the L2 for the past few days has shown that some people are indeed in a rush to buy; they just aren't desperate enough to hit the asks, generally. Yet.

IN SUMMARY

Frankly, out of the 3 charts, SWD's the one that holds the most promise for a short-terming momo pennyflipper like me. I could see BTO going back to $3 easily, and RIO falling hard if the volume collapses - at worst, drifting along the ceiling. I doubt we fly up to mid-$3 on RIO, but I won't be surprised now either after seeing that December structure hinting at a repeat in the chart.

Though I guess BTO has less risk than RIO (if your fear is baby-eating Bolivaran Communists). And SWD looks like it could easily give me a 60% return in the space of a month. Sometimes you have to buy a shitty chart to smack a home run, and this one both looks shitty and has the fundie potential for a home run.

The importance of international viewpoints

The importance of international viewpoints (as opposed to US-centric viewpoints) can't be understated. This is obvious when it comes to things like world news; much less obvious when it comes to investing.

American populists (and by extension, economics bloggers, who are no better than bald populists) have a tremendous love of conspiracy theories and impending apocalypse, and hatred of intellectuals. Unfortunately,
  1. Once you get into conspiracy theory, you accept ways of thinking that permanently disconnect yourself from reality. The nature of conspiracy thinking also gives you a fuck of a huge ego, as you suddenly think you're actually so fucking important that your beliefs (and by extension your portfolio) actually mean something or the world is out to get you (see Ron Paul criticism from earlier today, or any random post on ZeroHedge).
  2. It's never the apocalypse. Unless, of course, it is. But, from a market standpoint, just as a basic rule of thumb, if the S&P didn't drop 500 points today, and/or if your (well-balanced) portfolio didn't just drop in value by 10%, then it's probably not the fucking apocalypse today. Calm the fuck down.
  3. The intellectuals are the ones with intellect. By extension, don't ever bother even reading one single word written by anyone who can't fucking spell.
Unfortunately, the internet is full of American populism. Gotta get the hell away from it. Reading real worthwhile publications like Barron's, WSJ or Financial Times will give you a slightly more balanced view, as long as you stay away from the "opinion" and "editorial" columns which are all written by John Birchers and Neo-Nazis anyway; reading international, not American-based, bloggers will at least give you a viewpoint corrupted by foreign, non-American narratives, which at least is a little more balance.

Plus you'll learn that a large part of the world economy isn't American, which is very important when it comes to things like future world consumption of commodities. It sure was nice to just concentrate on the US economy (and politics) when making your investment decisions way back in grampa's day, I bet; unfortunately, since Y2K, demography and economics finally hooked up in the developing world, and the US really no longer matters too much for commodities.

Sure, another US recession (and remember, it's never the apocalypse) will probably tank oil, platinum and palladium, and maybe base metals. But not by as much as the apocalyptic nutbags suggest. After all, as certain people love to note, the US doesn't actually produce anything other than derivative financial instruments anymore anyhow.

I really do pity the poor dumb fools who live in the USA. As a Canadian, I should be well able to make one heck of a lot more money on the markets than them, provided I simply avoid their idiotic populist thinking. That means avoiding tinfoil-hatters, anyone who buys silver coins by mail, people who accuse JP Morgan of being part of a secret Jewish conspiracy or something, people who actually believe evildoers are shorting their shitty favourite stock and that's why it's tanking, or people who can't spell.

And, by the way, re: recession: another kind of thinking to avoid is binary thinking. If it's not a strong growth period, it doesn't mean it's a recession; the market can grind along going nowhere for years, without going up or down.

kitty videos part 2

They're just like Aura Silver stockholders trying to get information from Robert Boaz.

Except in the end they actually get something for their effort.

BTW - why I'm an asshole

In case I come across as an asshole, let me point out the following:

  1. Culturally, I'm descended from North English, Irish and Scots.
  2. I've also grown up in a town full of North English, Irish and Scots generational-welfare-and-menial-factory-worker types, so my whole life has been based around the survival strategy of picking fights to prove my masculinity as Malcolm Gladwell notes these people have always done.
  3. Even worse, I'm also 3/4 German, which means I also have an innate genetic tendency to be certain that I'm a superhuman genius and everyone who disagrees with me is an idiot. And don't get me started on Poland.
In reality though I'm not a bad guy. I just can't fight genetics. I'm not a lover, I'm not a fighter, I'm just an internet crank.

Response to GT

Today's biiwii was (yet again) doomy and gloomy.

I respond to Gary Tanashian's doom and gloom with a funny kitty video - thus!



Seriously, since when do we use the 10-year chart for the $HUI:$GOLD ratio to determine level of risk in the market? Know what the 10-year $HUI:$GOLD tells me? We're not in 2006 yet.

And a deflationary target of $20 for silver, based (yet again) on a 10-year chart? I'm sorry, is there an apocalypse coming that I don't know about? Recency bias much?

Here, wanna know what $HUI tells me?


  1. HUI's in an upward sloping channel.
  2. HUI's upward sloping channel has 2 parallel lines.
  3. Those 2 parallel lines are defined, by the way, by the Dec-Jan HUI drop and the Apr-May HUI drop. The April HUI topping structure looked exactly like the December topping structure, and both fell by about the same amount. I thus say the two are valid for framing an upward channel.
  4. HUI touched the bottom of the upward sloping channel (thus creating this channel) on May 15th, which by curious accident was the weekend that GT told us it was only downhill from here and we should stock up on extra carbines and 50-gallon barrels of soy.
  5. When it touched the bottom of its channel, it seems the RSI(14) and MACD(12,26,9) also hit their downward channels, if you believe in those worthless and time-arbitrary momentum indicators, which sure some people do and that's about the only reason they're worth anything but that's a whole other topic of discussion.
  6. MACD(12,26,9) has also crossed positive. Caveat again per (4) above.
  7. HUI's also now crossed above the EMA(20), which if you look at the chart has always been supportive in advances and resistive in declines. I'd expect a retest of the EMA(20) during an advance, of course, it seems to happen a lot.
Now if you got out at $HUI's bottom on May 15th, instead of following the $HUI, you lost the chance for about 8% profit. If $HUI continues to advance to top of channel, let's say 620, then from here that's maybe another 12% you will not have earned.

Considering you're supposed to be in this to make money, then, not being in the miner market right now is as bad as painting a big red FAIL right on your forehead, or sticking your money in some shitty bank's mutual funds.

Now sure, $HUI could go to 575, then turn around and drop. That certainly can happen. Why would I expect that?
  1. It's a previous heavy resistance line.
  2. The last time $HUI broke above that was during a silver advance. Then $HUI diverged horribly and we still remember what happened then, though we refused to pay attention to the divergence at the time.
  3. The heavy resistance at 575 would, if successful in repelling the $HUI, draw a head and shoulders pattern with a target of - fuck, something horrible, 420, around the level off last August. That H&S would scare everyone, and I remember some smart market trader saying that you should expect the market to do what it must to cause the most pain to the most people.
  4. If it hit that bottom by the coming August, that would fit with your typical broad market summer weakness, and your typical miner stock March-to-August weakness, and also give the $HUI a zero net gain over twelve months which would also cause pain.
So what's supposed to happen in the summer that screws everything up?

Meh, probably has to be something we haven't expected. Won't be Mediterranean strife, US housing slowdown or unemployment, or US budget strife.

But in the meantime, I refer you to the $HUI chart again. Look at February. $HUI broke thru EMA(20), bounced off the SMA(50), found support at EMA(20), then surged up to 580. If we get a head and shoulders on the $HUI I'd still expect 580 before bad things come.

If any of that crap fails, I'll reconsider my macro position. But as Barry Ritholtz says, "when there's a fire, I'm expected to bring marshmallows". So when the miners are going up, I'm going to be in the market.

Go ahead and call me a "momo". That's the jealousy of a buy-and-holder talking.

And BTW: I'm not trying to insult GT with this post. Unfortunately, unlike Otto, GT doesn't post in a way which would indicate a wicked sense of humour and a tolerance for good-natured ribbing, so I have no way of knowing if I'm being bad.

I like reading him, he's taught me how to read charts, I'm really only using hyperbolic language to voice my disagreement, and I am certainly just a newbie, one who's carrying a 25% paper loss this year to boot. All I'm saying is
  1. I disagree with his read;
  2. a 10-year view is completely invalid unless you recognize that the chart does contain an absolute hysterical top and an absolute hysterical bottom, neither of which are imminent because today is never the apocalypse;
  3. if we have even just 2 weeks of good market with a possible 10% gain before a tank, I want to make money in that good market;
  4. enough with the recency bias. Japan did a post-2008 USA 20 years ago and it didn't result in a Turner Diaries apocalypse. There will be no Mad Max villains raping the country folk;
  5. sure, everything will down someday. But predicting that something will go down "someday" is absofuckinglutely worthless as fuck, as that twit Hussman proves through his inability to even come out of 2010 with a profit. And all a 10-year chart tells anyone is "someday".
  6. quit watching Ron Paul supporters. It's destroying your emotional clarity.

Otto's caption contest - my best entry

I thought this one would win for sure. But I guess references to Wagnerian opera are wittier than candid observations of the unstoppable hypocrisy of the tinfoil-hatters....

libertopian internet cranks

Today GT has a video up about Ron Paul.

The video is a Rondroid* who, typical for all such Rondroids, took it upon himself to defend Ron Paul against the recent Mother Jones article "Ron Paul's 15 Most Extreme Positions".

The video is typical of libertopian internet cranks in the following ways:
  • he takes it upon himself to defend Ron Paul against all 15 accusations;
  • uh, and in detail;
  • in the first 10 seconds he identifies himself with Ron Paul and accuses mass media/liberal intellectuals of calling him & Ron enemies of society by labelling them "extreme";
  • At the 20 second mark he says "now, I like to keep these videos brief" - and then proceeds to prattle on in probably excruciating detail for another 26 minutes!!!
I'm sorry, I didn't listen to the rest of it. When a libertopian with an obvious persecution complex starts by promising to be brief and then prattles on for 26 minutes, especially when he's a Rondroid, I know exactly what to expect from that point onward. Fiat, Weimar, Zimbabwe, Ludwig von Mises, gold standard, as well as lots of technical crap intending to prove through cold, calculated logic that Ron is right and you're all wrong neener neener, now put us in charge, we're the saviours of America, why doesn't anyone listen to us?

What's more, he puts it all up on Youtube! Yeah! That'll teach the Lizard People and Bohemian Grove!

Fuck, thank pure unadulterated fuck for the internet. In the old days these guys would still be printing newsletters. Now entire forests can live and the US Postal Service isn't jammed up with crap.

Why do I feel so about Ron Paul? Well, go to the Ron Paul article on Wikipedia. Check it out. It is 127k in size. By comparison:

Wikipedia article on George Washington, first president of the US? 118k.
Wikipedia article on James Madison, father of the US Constitution and Bill of Rights? 78.9k.
Wikipedia article on Mark Twain, the US's greatest author? 93k.
Wikipedia article on The Simpsons, a stupid TV show with, like Ron, millions of rabid idiot fans who just don't know when the fuck to shut the fuck up and go the fuck away and leave Wikipedia the fuck alone? 110k.

See a trend? Ron Paul's article on Wikipedia is completely oversized compared to his actual importance to the world. Oh, plus: there are subarticles on his various political positions, all his books, and each of his political campaigns including the 2012 one that hasn't even started yet.

Rondroids are the most tiresome, most anal-retentive people on the planet, willing to prattle on at great lengths: even more tiresome and anal-retentive than Fundamentalist theologians (Christian Jewish and Muslim), Trekkies, creationists, and Ayn Rand worshippers. These guys will go on and on for MEGABYTES defending their messiah against all and sundry. They dedicate more time to Ron Paul than they do to sleep.

(Oh fuck - I just listened to the next ten seconds. It gets even more typical! After promising to be brief, he then says "at the end, I'll even refer you to a resource page"!~!!1!)

And by the way: extremist? Well, yes. He is. Among the Ron Paul positions which Mother Jones lists as proof he's an extremist are the following:
  • he wants to abolish social security, medicaid and medicare;
  • he wants to abolish half of all federal agencies;
  • he wants to legalize prostitution;
  • he wants to legalize all drugs;
  • he wants to revert to (...wait for it!... wait for it!...) a gold-backed currency (boo-yah!).
Now, hey, sure, a lot of the other positions MJ has a beef against aren't really extremist - States' rights, end warrantless wiretapping, bin Laden should have been arrested and put on trial. And others, like abolishing the EPA? - well, to me that's extremism, but Republicans since Reagan have always been in favour of that so by US standards that's not extremist.

But come on! Legalizing prostitution and drugs are extreme, in the US! Abolishing all entitlements and letting the poor or old die are extreme, even for the US!

And reverting to a gold-backed currency is insanely extreme, as well as extremely insane. Why? The value of all the gold ever mined, at today's spot price in US dollars, is only half of the forecast 2011 GDP of the United States.

How can you possibly move to a gold-backed currency, that I assume is going to have to be based on pieces of paper that are fully convertible to gold at all times, if all the gold ever mined, distributed throughout the entire world, can't represent the entire yearly domestic product of one country?

Anyway. I'm using too many italics and boldface - I'm turning into Karl Denninger. For my own sanity, I must end this now.

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*Rondroid (n): a brainwashed, rabid follower of Ron Paul. etym. < Randroid: a brainwashed, rabid follower of Ayn Rand.