Friday, August 12, 2011

Friday videos, late edition

Go easy on me. Work is a fucking bitch right now. Boy I can't wait til RIO skyrockets to $20 and I can tell the people at work, all of them, to fuck themselves.

I wanted to post a topical video. So here's Genesis with "Battle of Epping Forest".

quick market comment

Can't stay long, I'm presently duelling the People's Republic of China over my right to log into a secure server with an RSA fob.

$HUI looks a bit weak, GLDX backed down from its EMA(7). Look at the top formation in $HUI in April; we might just be at the tail end of another of those. I guess the positive might be that we could spiral back into a commodity collapse with advancing gold price.

Because of the uncertainty, and the newfound profits in my account, I've cashed up a tiny bit... as promised, the $10K of RIO that I bought a few days ago for $1.99 has been sold back to the overemotional bozo on the BVL for $2.27.

Estrella is terribly weak today, with a fair number of iceberg orders under 0.80. That stock is supposed to be worth something, right? If you feel that way, now seems a better time to load up than when a certain rogue blogger called it a buy and it shot up to $1.10.

US Silver indeed is back over 0.58. Hope you're all loaded up for its skyrocket to $1! :-)

Thursday, August 11, 2011

Automatic Earth blog is good.

Sorry, was busy at work.

Also, I RSSed Reuters yesterday and got rid of the shitty "business feed" that comes with Android. Problem with RSSing Reuters is that there are so many damn articles.

Check to the right of my page. Automatic Earth is another finance/markets blog. Only 1 post a day, but it's in great detail.

As for the markets:

$HUI retained its EMA(7), that's positive. GDXJ just popped above the EMA(7) too, a day after GDX/$HUI did. However the exploreco ETF, GLDX, is still under its EMA(7), so maybe that means that nobody wants chickenshit explorecos in their portfolios right now?

Think I might check Sulliden's chart tomorrow for something to do.

Wednesday, August 10, 2011

Some images to contemplate tonight

When I learned how to do Tarot, I used a deck called "The Enchanted Tarot". Each card had about 100 different images and symbols on it, and when your layout was done, you could just stare at the cards, and with the layout meaning and numerology in mind, see what images tied together into a story.

That's what I do with the markets. I really just look at 100 different things and see how I can tie all the data points into a story. It's holistic thinking, and it's probably wrong (note how I haven't mentioned XIV or S&P 1120 today) until you've made enough mistakes to be able to do it right.

Anyway. I want to present you with a photo montage tonight. Just look at the pretty pictures, and see if an interesting theme comes into your head:

UPDATE 2 - message for LedZepSteve

Gold close $1795. Is that close enough to $1800, or should we wait til about 15 minutes after Globex open and make it official? I really am a stickler for perfection. :-)

EDIT: Yup. $1800 at 18:15EST. Boo-yah! So what do I win? :-)

Or does it have to hold $1800 til Friday night?

EDIT 2: Oops! Just saw a $1799.50. We'll leave this as a "must be $1800 at the weekend" instead, okay?

On the topic of grand narratives...

Gary Tanashian had a good post today about gold stocks. I heartily comprehend him. Uh, and agree.

Also, Ritholtz has a good article about the underlying social changes that are happening as we speak. Go read it.

I've been saying for months now that we have re-entered the 1970s. Go look up the Rote Armee Fraktion, Red Brigades, SDS, Weather Underground, FLQ and so on. Now some of their success was due to the whole free love free drugs hippie bullshit from that era, and another contributor to their success was secret funding from the Soviet Union; but still, they rose up and resonated with people who were pissed off.

Oh, there was also the Iranian Revolution.

Oh - and also an oil crisis. And, um, gold went up in price. History repeats itself because people keep making the same mistakes.

Daytrading, Make Otto Jealous edition

Bought FVI $4.90 sold FVI $5.56 book $1690 in 24 hours say goodnight Gracie goodnight Gracie.

US silver unfortunately can't claw above $0.58.

interesting tidbit from the blog stats department

Funny. Whenever I mention ZeroHedge, I get a lot of traffic from Russia.

That suggests to me that ZeroHedge is just another Kremlinist disinformation portal, in service to Vladimir Putin, just like Max Keiser is.

oh and also....

Silver just spiked to an over 5% gain on the day, and $HUI's up to 564 as I write.

However, copper's down about 5%.

Wonder if US Silver's above 58 cents yet.... :-)

noon HUI

The good:

$HUI seems to be maintaining its position above EMA(7). In fact it's been going up during the day, even as the S&P 500 has been fighting the War of 1130.

Green line #1, top panel. RSI painting a higher high. That is attractive.

Green line #2, main panel. Resistance line for the recent downward trend. Puncturing it to the upside could be considered confirmation of the EMA(7)'s uptrend signal.

Yellow spot, third panel. MACD about to turn positive. Weeeird.

The bad:

Bottom panel. CCI(40) hasn't gone sufficiently negative. Could mean this short-term strength is but a few days of fakeout before things crash out badly. But on the other hand, CCI(4) should only go below zero when we're in a short-term downtrend within a medium term uptrend, like we were in mid-March.

The ugly:

ZeroHedge reports three European banks are about to go bankrupt.

Then again, Bespoke Investment Group (who really are awesome, seriously, give 'em $300 and get the truth for a year instead of political posturing) note that bank CDs aren't as bad today as they were in last spring's market correction.


OMG Glenn Beck is still alive.

Better close and restart Explorer, it seems to have stopped workig properly. :-)


$HUI started above the EMA(7), fell and bounced off it and is now green for the day. Remember, $HUI above the EMA(7) is short-term bullish.

S&P 500 started a bit down, but is moving back upwards towards yesterday's 1170.

$VIX is still a small tiny candle at 39.

I conclude people are sitting and wathcing which way the market blows. They want to get in but not until everyone else does. This is a very tricky moment right now. But $HUI is making me think it will resolve positive.

Then again, $HUI is always strongest at Retail Hour. We'll see if it can maintain strength.

Gold up 2.15% Silver up 2.7%. But copper is back down.

Tuesday, August 9, 2011

Friday videos, Tuesday edition, because I said so.

Tell me one person in the world who has a prettier voice than Katie Jane Garside.

In my meticulously constructed fantasy world, she's my girlfriend.

And so what does ZeroHedge have to say about this?

And so what has ZeroHedge posted so far this afternoon about the bounceback in the markets?

In the article "'Price Stability': 10 Year Retraces Almost Entire Intraday Swing, As The S&P Surges By Over 60 Points In Minutes", all they do is fucking whine about how Ben Bernanke is a bad person who touches ZeroHedge in a bad place.

In the article "Russ Certo: 'The Fed Just Basically Announced Recession'", ZeroHedge accuses the Fed of raping their grandmas.

In "Must Read: UBS' Andy Lees On Why The US Economy Is, All Else Equal, Doomed", ZeroHedge accuses Das Fed of marching all the ZeroHedgers off to the deathcamps.

No, I won't give you links to those articles, because they're fucking worthless to read.

I just wanted to illustrate what a bunch of whining chickenshits ZeroHedge are. The market shoots up 7% in an hour and all they can do is fucking complain that now they have to wait longer for their racist neo-Nazi sissy-pretend-survivalist Pauldroid utopia to come. You would think the panic ending would be a reason to be happy, no? You think maybe these morans should have some money in the stock market, eh?

So, in the style of the renegade blogger from Peru, here's my little message to ZeroHedge:

About that last post....

The last post was a superfast comment, to the extent that I was convinced we've hit bottom and now it's going to be back to sunshine and bunnies for a while.

I had just remembered that ETF Trends (which is a great site, you should RSS it and read it every day) had recently featured an inverse-VIX etf from the US, called XIV. (I dunno if it's on the NYSE or the AMEX, don't care.)

My read of today's action led me to believe the VIX will go down from here. The fearpanic is over. For now. That's my prediction, which is good until the market disproves me.

Let's look at the proof I had.

1. Yesterday the VIX painted a huge long white candle. But today's VIX was very tight, staying within a narrow range that (til the afternoon) was about 1/3rd the size of Monday's VIX range. That made me think that everyone was waiting for the FOMC minutes - the world was on hold.

2. ZeroHedge (oh god not again) commented that there was no volume today. Specifically, their tone was "oh look it's a zero volume melt-up, sell sell sell because we're going to crash, vote Ron Paul buy silver Heil Hitler and so on". The low volume confirmed my suspicion that everyone was waiting.

3. Just after noon. S&P had been curving down in the afternoon as people got scared and quit waiting for the FOMC minutes. I actually got scared too.

4. 2:25. S&P pukes down to 1100.

5. But then it drew a strong V, and started going back up. Once it was back above the clifftop at 1120, I began to get interested. I read the FOMC and it was boring to me.

6. I saw on ZeroHedge (oh fuck make me stop please) that the 10-yr Ts were at 2.17%. I had just listened to a Credit Suisse analyst (I think) saying a day or two ago that their target for the 10 was 2.25%. That is, we were already past target on the bond.

6. I noted to you all, publicly, on my blog, that the $HUI popped above its EMA(7). I said that was "actionable". Then I went and bought back my FVI and BCM positions that had been dumped before, at a strong profit. (Seems kinda stupid to buy that silver garbage instead of gold miners... well, we'll see if silver recovers, eh?)

7. I saw Los Retardados De San Isidro were still operating under the assumption that the S&P was still puking below 1100. Specifically, they were throwing away all their RIO shares. It was down to $2.00. (I had just sold 5K shares in the morning for $2.12, ha ha.) So I said "fuck it, I got $20K in cash left, gimme ten thousand shares of my favourite miner in the whole world who has never brought me anything but consistent trading profits so that I can sell them back to your stupid asses next week for $2.40."

8. I went and checked back. In the few minutes it took me to do all this, the S&P was scaling a fucking wall. Last I saw was 1150.

9. I was going to buy XIV. Seriously I was. I was logged in and had filled out the buy order. At 3:56 I could have bought all the XIV in the world for $10.59. But I only had CAN$8K. And the way my unsheltered account is structured, I have to first buy the $USD I need for the US exchange stock transaction, or else I get a nasty phonecall saying "you better buy USD to cover that or we'll sell all your positions and cover it for you."

Basically, it was too much of a pain in the ass to properly execute that trade. And I have no idea how XIV acts. I haven't watched it in a market bottom. I don't even know if it's long-volatility or short-volatility (which matters here because of the backwardation in the premiums right now). And I don't even have an idea of whether this really was a bottom. Though S&P did close at 1172 tonight.

So, dear readers:

Please, let's just pretend that tonight I bought 10K shares of XIV at $10.59. OK? And we'll see what it's at tomorrow. OK? I really would love to see if XIV is the bottom-caller's killshot ETF, where if you call the bottom you can triple your money in a day or two. Because this is exactly what I'm going to want to do next time I call a bottom. This is very useful info for me to file away for future use.

Oh... and by the way....

I just remembered that the way my account is structured, despite the stupid currency exchange crap I mentioned above, I already learned a year ago that I can overdraw it all to hell - just as long as I close out the transaction and cash my US dollars back up above zero before settlement! All they do then is charge me 4.75%/yr interest, as if it were a loan! Ha! What a pain in the ass, I just remembered that! Arrrgh!!!! I coulda been a millionaire on borrowed money!!!!

Anyway. Wish me luck on my pretend $100K XIV trade. At least there's no real money on the table so I can sleep at night. :-)

And if it does work out in my favour... okay, then you can start saying I have "balls of steel". If it doesn't work out, I'm just another dumbass with more money than wisdom.

before close buy XIV

Buy NYSE:XIV $10.59 before close.

I didn't. Let's see what happens to it tomorrow.

Actionable HUI data I think

$HUI just broke above its EMA(7) and its SMA(200). Silver is still brutally weak, but copper's up over 1%. S&P painted a V-bottom to 1100 and back - it would have to get back to 1180 to be bullish by my EMA(7) theory, but what I take away from this is that the miners are still outperforming S&P 500, and are now close to turning bullish.

On a $HUI close above 545 I'd be tempted to go all-in.

And I have done, actually. Added FVI at $4.89 and RIO at $1.99 (them silly panicky Peruvian capitalists) and BHV at .45 and BCM at $3.98.

We'll see if this was a very stupid idea.

But still, as Gary Tanashian would probably say, "at least the $HUI has now been well de-risked".

Back in May...

...before anyone started reading this blog, I posted a Discounted NAVPS calc for Rio Alto that gave me a price target of $3.49.

I just wanted to check back on that today... and... yup! It's right. I calculated that target price based on gold being $1500.

If gold is $1700 now, assuming $500/oz cash costs, I guess the price target would now be $4 or so.

Pretty good deal, eh? $2 for a $4 stock?

EPU (Peruvian ETF) is down to $36 - I guess the Peruvian "investors", hot-blooded emotional Latinos that they are, have been dumping stock like crazy this past week or so. And RIO trades very heavily on the BVL, so I've seen. In fact, I emailed Alex Black a few days ago and he told me that he felt all the RIO price weakness we've been seeing was just Peruvians dumping shares because the world is ending or something.

Oh and by the way, Alex Black says RIO's doing very well thank you.

So... to me, any RIO at $2 is a steal.

So that's where I'm aiming to stick all my money.

Bespoke overbought/oversold numbers

I just opened today's daily update from Bespoke and found something interesting.

As of today's preopen, they're counting 96.8% of S&P 500 stocks oversold, 0.0% overbought. We never get that high. That's sillyworld.

All sectors except healthcare are "extreme oversold".

Gold very overbought, silver high neutral.

Dispassionate math says things need to take a rest here.

Zerohedge of course says that we're seeing zero volume cos everyone's on the sidelines except the robots. But you also see zero volume after a capitulation.

Measure your H&S target for the S&P 500 and tell me where the target should have been. I get 1149.

So... there you go.

No matter what the FOMC says today, how the market reacts will tell you where it's going to move next. So says I.

Vix sums up today's market perfectly

$VIX is painting a teeny tiny 300%-or-so engulfed candle right now. In other words, it still hasn't decided whether to shit or get off the pot, as we like to say up here.

That's telling me the entire rest of the investing world is sitting right with me, on the sidelines, waiting for 2:15 when they get to hear from the FOMC whether or not they will get some free candy again to make themselves feel better after they fell off their trike and got a nasty little boo boo.

Oh, funny 'nuff - that EMA(7) seems to tell you when the fear has receded.

Oh, by the way - the Vix is in backwardation right now. That only happens when there's doom, i.e. more fear of tomorrow than fear of next month.

I'm sitting on more cash right now. Not touhing gold or anything, sorry.

Ritholtz reposts Rosie

David Rosenberg's Monday morning breakfast was upchucked all over the Ritholtz blog.

He makes some good points. He's also fixated on the ChiFed Agg, which says we're on the edge of a recession. So go have a read.

quick comment

Bought TCC yesterday for 0.395 sold today at .44 made $340 bought HBU yesterday sold today made $200 say goodnight Gracie goodnight Gracie.

The $HUI's inability to force its way above the EMA(7) tells me this is a fantastic opportunity to short gold miners. HIUI is at 533 now; if it just gets up to 539, you cancel and take a small loss. But it might be likely to drop here, at least back to 520 support. 13 versus 6 is good odds.

Gold is dropping, by the way.

BCM is still circling the drain. Actual silver producers like FVI also going down. BTO strongish but unconvincing.

Still think $HUI's next move is down unless it grows some balls.

But wait til after the FOMC statement this afternoon. I doubt we'll get a surprise but you never know how much effect the political pressure from the investor class could have.

BTW, investor class: take a look at the panic on the streets of London. That's your future.

comment and Grandich

I'm happy to have put $10K into HGU overnight... though gold is being beaten back down in London trading right now.

Grandich today is reducing gold exposure from 50% to 40%... but at the same time is doubling miner exposure from 20% to 40%. He thinks gold miners are the most compelling that they have been in his 27 years.

When he decides to trade something on conviction I tend to listen. As long as it's not some crappy exploreco, of course....

He also thinks we're due for a strong violent rally. But the overall long-term trend is down.

I'll be selling my HGU this morning, don't want to stay in gold during the FOMC meeting or whatever it is.

Monday, August 8, 2011

oh and as for the metals....

Copper $3.92, there's your sub-$4 warning Otto.

Zinc 0.93, hope that zinc trade's workin' out for ya too.... :-)

And my favourite, lead, of which Jim Rogers says "it's the best metal to be long in - nobody wants to mine it and everybody needs it" - still just a shade over $1.

Yeah, I'm a heavy metal lover!

(Sorry, Gaga's not put her own video out yet for it, this was the best I could find.)

wild kittens at work

A feral cat had a litter of kittens in the planter at work. In this photo, I guess they're about 1 week old.

We decided to start leaving food out for the mother cat, because she probably wouldn't find enough snakes and mice and rabbits and birds to stay healthy enough to nurse them.

Here's a few of them about 3 weeks later, now relocated to a pile of wood pallets in the yard of the roofers next door.

They're already very skittish and timid, and generally run and hide when I get within 10 feet of them.

I'd like to try to catch them, get them used to people, and then adopt them out. Unfortunately work is a little too busy right now, so I wouldn't have the time to take care of them for another week or two. And I only maybe have another 2 weeks to catch them before they go completely feral, at which point it'd take a professional to get them tame.

Here's the crazy black kitten. (Look under the armour stone's carrying handle.) He already hisses at me when I get close. He's my favourite.

Proof that when you look deep into the abyss, sometimes the abyss is a kitten.

Way out beyond the fringe

I don't want to start reposting the bulletins that I get from Bespoke Investment Group, because I really do like their service and don't want to lose access to it. Their daily pre-open update is something i hardly read anymore, but they regularly put out fun statistical analyses of the various occurrences in the markets. I highly recommend subscribing to their service - it's Otto-level cost, and it's completely dry, unpolitical, nonpartisan analysis from a purely mathy standpoint. It gives me a level head, which I need before poking my nose in at ZeroHedge to get the real doom news.

Anyway. Bespoke points out that today the S&P closed 4.3 standard deviations below mean. That is just a shade worse than October 28 or 29, 1929 (Black Monday and Swarthy Tuesday).

October 19, 1987 was -5.5 SD. The news of the Nazi invasion of France gave a -5.0 day and a -5.4 day, followed by a -4.0 day.

Importantly, the only times that multiple -4SD or worse days happened one after the other were during the fall of France and Black Monday. Otherwise they only occur once.

So if we were, say, to get a -800 SP day on Tuesday, you'd be well advised to write down what you were doing so you can tell your grandkids about the Great Buttrape of 2011.

Notably, though, after every such -4SD or worse day, over the following 6 months the market has always turned out positive. Anywhere from 2% to 21% higher... average 8.2% higher.

So... this may not be the bottom, but we've gotta be much more than halfway there.

Unless this time it's different, of course. I try to keep an open mind.

The Francis Dolarhyde scene from Red Dragon

Fair warning ahead of time: don't watch this if you don't like mangled body slideshows.

Below is what I'm always referencing with my "Do you see?" comments. In this scene, Francis Dolarhyde, the psychotic serial killer, has kidnapped a journalist who wrote mean things about him, and uses a slideshow in an attempt to explain what/who he really is.

Again, fair warning: don't watch this if you dislike either mangled bodies or slideshows.

SPY vs financials

Here's SPY, the S&P ETF, versus XLF (US financials) and IXG (world financials).

This is one of the factoids that form the basis of my thesis re: what's coming.

Oh wow, the financials have been diving relative to the S&P since Thursday, huh?

Here's the financials YTD. Do you see?

Here's some selected banks, 5-day. Do you see?

Here's the same banks, year to date. Do you see?

Tune out all that debt ceiling chickenshit. Jesus fuck, that's the pablum that they feed the working class. Tune it out. There's something going on with the banks.

day trade success

Bought $10K BTO $2.94 sold BTO $3.09 say goodnight Gracie goodnight Gracie.

manic illiquidity spike

Holy geez. Rio Alto went up to $2.18 this afternoon. Then down to $2 in seconds. Then back up.

$HUI is back at the daily low. Does not look good for miners all of a sudden.

In the broader market, I wanna know WTF just happened but can't get onto ZeroHedge (oh God there it is again).

Francis Dolarhyde returns

Gold miners versus copper silver and explorecos. Do you see?

Gold miners versus US Canada and China. Do you see?

I'll come out right here and reveal my theory for all to see - and maybe mock within a week.

Everyone is fleeing to gold. The Europeans have been doing it for weeks. The story is, several Euro banks are on the verge of collapse. The Euro debt downgrades are a positive feedback - S&P is driving the countries to default.

I am not a goldbug but yeah, I'm seeing the "fiat is dead" argument now.

Now where do you get gold?

From gold miners.

Why are gold miners up so strongly on a terrible day like this? $HUI just took out the EMA(50). The EMA(7) is around 547, the $HUI is there already, and if it breaks above the EMA(7) and stays there then by this momo's definition you are in a short-term bull movement for gold miners.

People flee to gold the world over. Then gold goes up. Then people realize gold is the only thing that's up. Then they buy gold miners to own gold. They also buy gold miners to make money off the leverage to gold, and the advance in the price of gold (wanna recalc your miner's NAV at $1700 gold now? Better hurry - it could hit $2000 by fall) and make money off the collapse in the industrial commodities (gold versus CCI, thanks Gary Tanashian).

Gold becomes the only game in town.

Let's see if we can't screw this all up now. But that's my theory and I'm sticking to it.

One bad thing about this is the goldbugs will become positively frickin' obnoxious.

UPDATE: I emailed GT and apparently he agrees with me. Or something.

interesting divergence here


It's 10:25 EST. S&P down over 3% so the panic's still there. But at the same time, $HUI is strong. This while GDXJ (juniors), GLDX (explorecos) and SIL (silver miners) are collapsing.

Seems like people want gold. And are now willing to buy miners. Not stupid pennycrap explorecos with moose pasture, mind you - but actual gold miners.

Let's see how long this lasts. This is my suspected new paradigm.

Inspirational art for trading open

Sunday, August 7, 2011

Sunday night's alright for fighting


Gold woke up tonight at $1690. Silver's back above $39. Apparently futures are down and treasuries as well.

Is gold the last place to flee to?

And I wonder how the miners will do tomorrow morning?

I don't want to liquidate in the face of disaster. I certainly don't want to dump RIO. Other stocks that I'm still holding at a profit, though, I might dump if the miners go down while the metals go up.

And certainly if it's not a miner, I'd dump it in a heartbeat.

Been thinking about going into HGU, double-long gold ETF, instead of just cash. Gold might be going parabolic if this great worldwide capital flight continues. Certainly anyone reading Otto should have used at least GLD as cash instead of, y'know, cash.

Gold producers, not gold explorers

To the extent I can follow GT, he seems this week to agree with the idea that if you still want to hold any mining stocks right now, it should be gold producers - not gold explorers and certainly nothing to do with silver.

Actually... looking at the 5-day and YTD for gold versus miners, I really can't see why I'm holding any miners right now. At all.