Friday, August 26, 2011

Century Mining

OK, fine. Otto wants this. I'll keep it short.

Century Mining just put out their Q2.

Here is a fictional portrayal of the market reaction:


Tea Party idiots = the decline of America

Lovely little slideshow here. The author probably assembled it to illustrate the stupidity of the Tea Party.

I think, instead, it illustrates more generally why America is no longer a superpower. Frankly, you gotta wonder who's still got 2 brain cells to rub together, down there.

Monkeys talk about religion

Everything that has transpired has done so according to my design

Oh look. Gold up 3% silver up 1%. $HUI is back above the 580 support and EMA(7), it's printed a golden cross, Sil is up GDXJ is up.

This despite the industrials also being up: SLX up 3% KOL up 2% tin up nickel up zinc over $1 copper at $4.09.

So... industrials going up means people think the growth scare is over. But yet people are still bidding up silver and gold.

One story is wrong and the other is right.

Look up XLF, the financials spider, and tell me which story it supports.

No further comment necessary. I still feel that I'm right and everyone else is wrong, except those people who largely agree with me.

Friday videos - who knows what's going to happen edition

I've put this "Friday videos" post together on Wednesday night, just to get it out of the way.

Problem is, I try to be topical.

What's the topic going to be on Friday? Well, I decided to pick some Portishead. That way, if it's a really horrible day on the market, you get to listen to Beth Gibbons singing lyrics like "the time that I will suffer less is when I never have to wake" and "the blackness of darkness forever" and "dreams and belief have gone, time, life itself goes on".

Um... and if it's a good day?

Aw fuck it, I'm sure the market will be a dismal hellscape of putrefying infinite doom.

So listen to some Portishead.

Aw, that bummed you out? OK, go watch some kittens play with a roll of toilet paper and you'll feel better.

Thursday, August 25, 2011

New York City blub blub blub

Here's what NYC has to look forward to this weekend:

And - you know what? I even beat ZeroHedge to the punch with that video! You'd think they'd have posted it by now. Dumb fucks. Too wound up whining about HFTs and Warren Buffett - who, of course, they're calling an evil Jew who's out to destroy America by making the rich pay taxes.

You gotta wonder how many Goldman Sachs/Lizard People plants are posting at ZH, eh?

What y'all have to say 'bout that, boy?

Here's shakespeare for you

Shakespeare this!

Bloody English types thinking they can just reply to anything with Shakespeare....

Don't take your eye off the target

What's that? What's that you're saying? It's all different now? Gold was a bubble, now it's burst? And Friday will be all about Bernanke? He's going to hand out free candy?

So... that means tomorrow morning's Q2 GDP revision is going to turn out alright?

European banks' credit default swaps and overnight lending rates have already started coming down?

Warren Buffett extending a $5B perpetual loan at 6% to BofA with a 5% break premium, with another $5M in warrants at $7.14 attached just in case the price ever goes up, was a vote of confidence for a company that didn't actually need any cash? Did their shares rocket back up to $15? How about $9.50, which was the top of the recent cliff? Hm?

Well, all I know is, Kitco says gold is at $1769 as I write. I translate that as "fuck you". Kitco says silver is at $40.78 as I write. I translate that as "and your little dog Toto too". $HUI ended the day up. I translate that as "where the sun don't shine".

Oh... and also, just to outdo ZeroHedge, I guess that the hurricane about to flood New York will be a good thing too? Uh... yeah, the mayor is telling people to evacuate low-lying areas. Like... Manhattan is a low-lying area.

Maybe nothing happens this weekend. But it will be very instructive - and possibly game-changing for the US political system - if a hurricane hits another city, but this time destroys the homes of hundreds of thousands of rich white people.

Oh look!

Oh look! $HUI's back at support. Silver's up. GDXJ and SIL are up.

Boy, those guys giving interviews calling $1900 the top and gold a bubble better have enjoyed their 15 minutes of fame.

fear is the mind-killer!

Apparently the Euro banks are still failing, CDSes are still high, someone drew down over 200 billion Euros in overnight funding from the Euro authorities, gold's quit falling, silver's quit falling, and some market participants are actually positioning themselves for a "no free candy" announcement from Bernanke.

Go figger, eh?

Oh, and $HUI is still hanging in there.

Fear is the mind-killer!

Otto being all zen

Otto provides a calming voice in a maelstrom of activity....

Wednesday, August 24, 2011

No answers, only questions

Here's the good and the bad.

The good?

1) $HUI fought back hard today from the low around 560. This despite weak silver and gold prices. There was a fair bit of aggressive buying at the end of the day, at least in the stocks I watch. I find that a positive.
2) $HUI is still technically testing the 570-580 support (formerly resistance).
3) The SMA(50) is about to cross the SMA(200), and some people might think that's a good thing.
4) Look at the past month in $HUI, compared to the broader markets. We've gotten off easy compared to the "normals".
5) RSI(7) did break over 70, but not by much or for long. That suggests $HUI hasn't gotten sufficiently overbought yet, for a final uptrend peak. Look at late March. Same for the CCI(40) - didn't get overbought enough yet.
6) I like having that higher low at the beginning of August. It suggests to me that the medium-term trend is still up, and remains so til $HUI drops through 540 or so, which is where the trend line would have been if I'd bothered to draw it in for you.

The bad?

1) GDXJ and GLDX have both lost support in a bad way. They're still higher lows right now, but one or two more bad days and they'll be lower lows.
2) MACD is threatening to cross over and go negative the way it did in April.

So, do you want to ask me what to do?

Well, it either goes up from here, or down from here.

It probably depends on how the PMs react for the rest of the week. You've got OpEx tomorrow, which means more funny business in the PM markets. Then you've got Jackson Hole on Friday, where supposedly Bernanke will hand out free candy again.

We know PM prices go funny right before OpEx. And we know that a lot of money has fled PMs and gone to cash to wait for clarity from Jackson Hole - markets don't like uncertainty. Oh and also, the Comex has just hiked gold margins by 27% (and the selling today suggests some people were given advance notice, says Turd Ferguson). So I'm not worrying about PM prices right now - I'll tune back in on Monday and make my final decision about the near future for PMs.

Though some utter fools have been buying up the S&P in advance of J-Hole: or maybe it's only going up because it hit a bottom last week, and people are seeing that and saying "ah-ha, someone has inside info that we get free candy, better dump the PMs"?

Medium-term, I'm not concerned about gold til I hear that bank and sovereign CDSes are falling back to normal prices. For the time being, there is still bank default risk all over the place, and my theory up til now was that this was the explanation for gold's spike. People have just forgotten about bank bankruptcies today.

Long-term PM movement should still be up til we hear otherwise, right? It just got way above its trend, and now is trending back.

And who gives a shit about the price of gold? Don't get distracted by things that don't pertain to you. We want to hear about the price of miners. And we don't even want to hear about the price of miners as far as it pertains to $HUI, GDX, GDXJ or SIL; we want to hear about the price of those particular miners that we personally own. Again, don't get distracted by things that don't pertain to you.

So, me personally, I bought more BTO and FVI today, because I wanted to own more, and they were cheap, and some lunatic in Peru says they're going up from here. I already made double my quota on the market this week, and the other stocks I already own are either going up in price despite gold (RIO) or are already circling the drain and really have nowhere lower to go if you ask me (GOZ, BCM).

My explorecos are crapped out a bit, but I await drill results, so I can't exactly dump them. Although I have a tolerance for loss, which is mitigated by this week's already-booked profits; so I can dump one of them if the paper loss becomes too great, without wrecking this week's profit too much.

And I will dump them if they drop too far, because that was something I didn't do in the first half of the year when faced with large losses... and the losses kept piling up, getting larger and larger, because I didn't cut them short. I now no longer tolerate huge losses and will strangle the damn dog in its sleep if it falls farther, no matter what it is.

So, sorry. Not helpful for you. But as far as I'm concerned, this is my blog and it's here for me.

Feel free to go to Kitco and watch silver and gold on the Globex/Syndey/Hong Kong tonight for some illuminating information. I think my own theories are in jeopardy if gold continues to go down overnight. We'll see if people in Hong Kong still like gold, okay?

margin up... in Shanghai

Yeah, so apparently Shanghai upped its gold margins by something like 30% two days ago.

So gold could be going down in profit-taking, as big boys cash up in advance of Jackson Hole. Want cash in the face of upcoming uncertainty. Not just Jackson Hole, but the imminent necessary margin ups in Chicago.

$HUI RSI(7) declining to 50 is okay if it goes up from here. Same for CCI(40) declining to around 50 - both are what happened in March.

However, if MACD crosses over, like it looks it's about to, we might see a further decline. Like I'm saying, hopefully no worse than 550. But we'll see.

For what it's worth I bought a bunch of BTO and FVI today. All-in, no cash left sorry. Hope this wasn't a dismal mistake on my part.

If you want to flip trade

FVI's cheap, USA's cheap. Both could go lower though if silver keeps diving. You could get USA at .56 if the destruction of silver continues.

AR and AMM are cheap. GOZ is cheap but could get to .78, who knows.

I'm thinking this is all happening because of Thursday OpEx and Friday's Jackson Hole free candy expectations. $HUI support at the imminent golden cross will be important to me.

today's comment

$HUI, GDXJ and GLDX have lost support. SIL looks okay though. So if you want to be a momo, sell now and buy back in a while.

RSI(7) and CCI(40) didn't get particularly overbought, so this might just be a small pause in an medium-term upward trend. The SMA(50) and SMA(200) in the $HUI are forming a golden cross around 550; I suspect we'll see support there.

Notably there's no such construction in the EMA(50) or EMA(200) because they're both in bullish positions and have been all along.

I feel fine because my miners aren't losing much money. In fact I just picked up a starter BTO position at $3.60 and will buy more on weakness. Maybe add to my FVI at below $5.40 too.

Tuesday, August 23, 2011

Like I just finished saying.

Oh look. Sydney's open and gold's back up to $1841, Bruce.

Oh, and silver's $42.19.

Hong Kong opens soon.

Biiwii on gold

Here's Gary Tanashian at sarcasm:

But but but... they told me the world was ending so I called 1-800-GOT-GOLD... I am protected I tell you! What the eff is going on here?? I GOT gold! Oh my god, what have I done?

Answer: You herded... and fell victim to emotion. That always sucks in the markets. Okay, time
to swing to the other pole. Bye!

I'd like to point out to his readers that there were some pretty nice intraday gaps in the chart - ones big enough for sarcasm.

The gaps aren't there due to everyone piling into GLD at 9:30AM every day on the NYSE.

The gaps are there because GLD is based on the price of gold, a metal which trades all night in many different countries of the world, and it's those countries that have been bidding the price up every day. Like maybe China.

I'm only sayin'.

Watch gold's overnight action on Kitco tonight for some positive reinforcement, I think.

Well, you came here cos you want my opinion.

If $HUI closes around 570 or worse today, that's probably going to mean at least a short pullback. Probably through OpEx. In the words of conspiracy theorists like Turd Ferguson, "it looks like they're going to massage the price down for Thursday."

Fantastically, Rio Alto is doing quite swell today, even on little-to-no volume. So I'm actually up on the day, despite broad markets being down and gold and silver suffering big smackdowns.


Silver took a big dump today, but it might have just been a raid on the $42 stops.

Yes, $HUI is down. But I invite you to look at the chart to see that it's still holding its EMA(7) so we're still happy.

Funny enough, GDXJ and GLDX and SIL have declined relatively less than $HUI... now go figure out what that means. I dunno, maybe the hedge funds who were heavy into gold majors have pulled out today, lured by the stunning prospect of... S&P 1150?!?!?

Everything still looks healthy, just back to the borderline.

Why FVI was up yesterday and down today

Fortuna was up yesterday as it got yet another pump from Nicholas Campbell at Canaccord.

It's down today because people stopped buying so much.

Yeah, I sold. Looking to add back at under $5.40 now, what with silver doing the waterfall collapse in preparation for OpEx.

Oh - and Charles Oliver from Sprott

Oh and by the way:

Charles Oliver from Sprott is interviewed in Gold Report, and he likes Yamana, Guyana Goldfields, and (erp - there we go again) Bear Creek Mining.

Is that what you meant by "smart money in Toronto", Otto? :-)

Watch the short gold ETFs

When silver popped at $50, you could see a premonition of the drop by looking at the short silver positions. A massive spike came the day before the dump.

Now ETF Trends has an interesting article:

ETFs that Bet Against Gold See Trading Volume Rise

So just watch out.

It might just be people trying to play a mean reversion; after all, silver popped in a channel-buster move, and then when the bubble popped it simply fell back into its channel. Maybe people are betting that something similar will happen with gold too? I'd do that if my pain threshold wasn't so low.

Maybe the easiest (for a Canadian) is to hedge with HBD, the Horizons bullion 2x short ETF. If you don't like to hedge, then maybe you just keep that in the back of your mind for future use if you see a major fall starting in gold.

If $HUI busts past 610, I'd expect a retest down to 600. If it falls back before 610, I'd expect a retest at 570-580. Either of those would back $HUI's RSI(7) and CCI(40) away from overbought without breaking the all-important EMA(7) short trend support. So those would be good things in the GT "I hate when markets get overheated" sense.

However, if the EMA(7) gets failed, HGD (Horizons goldminers 2x bear) is an option. If the miners fly up from here, well... hold everything you've got. Just make sure you also keep checking GLDX (shitty explorecos ETF), GDXJ (junior producers ETF), SIL (silver miners ETF), and SLV (silver ETF). Silver has to keep impersonating a flight-to-safety precious metal; the silver miners have to keep finding a bid; and you want to see breadth continue across all golds for this to be a sustained move. Failure in any of that means we junior miner investors don't get our free candy after all.

But remember we still will see gold margins on the commod exchange get boosted, and quite a bit - 50% at least. And remember there is OpEx on Thursday, so all sorts of fun things can happen to prices then.

In addition, flash PMIs from China and Germany aren't half bad, so you might see the PM play weaken in favour of the base metals play. Check out copper (JJC) and the copper miners ETF (COPX) today. They might start to look less horrid. How the PMs and PM miners react to base metals catching a bid might be instructive, too.

You can actually read Turd Ferguson's opinions on precious metals today without polluting your mind too much - just remember when reading him that "EE" stands for "Evil Empire", and "C/C/C" stands for "The Lizard People, JP Morgan and the Joos".

As Napoleon once said, "It is foolish to ascribe to a conspiracy that which is easier explained with reference to stupidity."

As I've said: "Today is almost always never the apocalypse."

Monday, August 22, 2011

meanwhile, back at home....

Here's the company I work at, names edited to protect the insolent.

Holy shit, I'm out of a job....

It dives in market crash panics like 2008/9, because it's an engineering company (most profits made in Canada, only a minority in the US though it's cross-listed on the NYSE), and it mostly works in long term care/urban land/light industrial, with infrastructure work in Canada.

I guess the idea is if the US economy looks like poop, people dump it. Seems to be the story on the 3-year chart. Then the poop smell goes away and people buy it back.

Their Q2 recently came out with some bad numbers - not horrid, just bad - and talk was that there had been insider selling on the report, which came public several days after it was internally available.

I hate the idea of owning stock in the company I work at. That is extreme risk to me. My paycheck comes from them. But really, I could buy this weekly chart:

1) I'd buy if it retook its weekly EMA(8), especially if it did so around $23-$24.
2) I'd buy it if it collapsed to $18-$19, since those are sillycheap panic lows and while I have no love for my company's management, they aren't utter fools - just overpaid managers. The company will still exist.

So... GT has Parker Hannifin, I've got my own company. Y'know, to prove I'm no goldbug.

Meanwhile, in foreign markets....

Gee, the whole world is falling off a cliff, eh?

Wait... Brazil's showing a 10% positive divergence to the SPY.

Wait! Thailand's looking positively hopeful.

Both might cross over their EMA(8) - if so, they will look bullish.

And thus is demonstrated the folly of following only the US and European news, then extrapolating it to the rest of the world.

What's Otto on about today?

Otto typically makes reccies on a Sunday that see the stock skyrocket 20% on the Monday morning. Mostly this happens when he's recommending a highly illiquid stock to his subscribers.

Think about it: if he's only got retail like me following him, let's say 300 of them, and they're each taking a starter position (oh, let's say just a 2% position) in, let's say, a $100,000 account (cos that's the least money you can trade for reasonable fees at somewhere like Investorline, and anyone with more money than that is probably not crazy enough to put it all into junior miners and frickin' explorecos), that's still $600,000 trying to move into the stock. If only 10% of those people are dumb enough to put in 9:30AM buy orders with no limit, that's still $60K worth of bids at 9:30AM.

For a stock that only does $20K-$100K of trade in a day, like most of his highly-illiquid reccies (including last week's), that $60K pile-in is pure market-distorting action right there. So the price goes up 20%.

In some cases you can buy the stock 2 weeks later at the price it was before Otto reccied it.

I don't encourage him to lecture his readers, but I do write him emails asking him to mock the guys who (say) buy COP at 90 cents on the Monday morning, right about the time that I buy it a few weeks later at 70.

Now, I don't want to shame him for life, in front of the very people he regularly -er- highlights on his blog, by referring to the stock he recommended as a buy this weekend... but, let's just say that yes, I bought in at $3.15 today, so what.

In this case, though, he reccied a stock that does $2M/day in trade on the TSX. His followers couldn't have distorted that stock's price by piling in on a Monday morning - its regular volume swamps that out. Plus a lot of his readers are Americans who probably bought the crosslisted shares on the US exchanges, so they were swamped out even more.

Plus, just take a look at the chart - with certain names edited out to protect the insolent, of course:

When this was trading at $3.15 and up at the start of the day, the chart probably would have looked good. Standard MACD was probably about to trigger up, at that price. 8 and 60 seem to be the relevant intervals for RSI and CCI; both look good. And hey, it had crossed over its EMA(14) (in this case I use 14 cos the stock is so noisy and fakes out a lot). Plus, the other miners of this metal were moving up today, the metal itself was strongly up, $HUI was up and close to a breakthrough point... all the stars seemed to be aligned at 10AM.

So, yeah! I personally bought some at $3.15 this morning! Shame on me, Otto! Looked good at the time. Now, that was only a tiny starter position, just to keep track of it and have a foot in the door in case it exploded up to your target in one day. :-)

I doubled down with an equal serving at $3.01, which out of luck happened to be the bottom tick, yay me. I could double down again to $2.80 or so without being worried, as to me $2.60 looks like a good stop loss point and that'd be about my max position size. And since you call this an X% win in Y months (where X is some huge profit that you shouldn't rightly be able to make in Y months unless there was no god), and essentially told everyone to dump another, more reputable company, that mines the same metal, in order to buy this one, well... of course people will pile in.

Cos they trust you and stuff.

I'm sure it will all work out well.

Let's just hope that certain people don't find out about this reccy....

You don't say you want a revolution?

Read this article:

Consent is evaporating: The global crisis of institutional legitimacy

and forget that I have been harping on this same fucking point repeatedly over the past few weeks. Cos Felix Salmon is some sort of fucking genius and I'm just some working-class screaming lunatic with a blog and a fantasy of a dystopian future decorated with piles of human skulls.

Now go ahead and tell me what the collapse of institutional legitimacy means for, say... gold.

high noon

Well, now GDXJ and GLDX have made decent moves. Both are butting against SMAs, but nothing that looks particularly significant from the chart point of view.

This with the S&P 500 looking moribund.

$HUI is up to 604, but got as high as around 609. The RSI(7) and CCI(40), which are significant, are both in overbought territory, but can still get more overbought - RSI(7) can get up to 80 on a normal move, and CCI(40) can get up to 200 before feeling very toppy. And anyway, is this a normal move in $HUI that we're looking at?

So yeah, I wouldn't buy at this point... I would have bought this morning at 9:45-10:30, which wouldn't you know I did.

market comment

Otto's making me post stuff today.

$HUI is up strongly. It's beaten through the major horizontal resistance at 570-585, and is now attacking the 605 area that was the April high. GT considers 610 a vital point, but I feel the 605 resistance is insignificant compared to the major resistance we've had in the 580s area.

So is it off to the races already?

GDXJ looks good. GLDX has been looking like crap, meaning the explorecos weren't til now participating in $HUI's rally; now it looks a bit better. However, both of those have SMA resistance coming up soon. I suggest you chart them.

SIL, the silver miners ETF, looks decent right now. But I'd feel better were it to bust through $28.

Gold up silver up. COPX, the copper miners, still looks horrid.

So, again, this is the precious metals safety play, with the producing miners getting bought as proxy all of a sudden, and with silver strangely making money off the fear play instead of getting crippled in the greed play. I.e., right now, silver is gold. If that changes, get out, per Biiwii.

And again, go read Guy Lerner, cos he says broad market sentiment is so bad that the contrarian play is to buy the broad market.

It'll all change in a week.

Sunday, August 21, 2011

Mark Cuban: "Buy and Hold's a Crock of Shit"

Great quotes:
  • "All that asset management and diversification? That's for idiots."
  • "Unless you really have a commitment to something, just keep your money in cash."
  • "Having dry powder, when you see an opportunity, you're ready to take it."

Recession or not? Market crash continues or not?

Courtesy Ritholtz, it's uber-loser John Mauldin saying we're heading into a recession:

The Recession of 2011?

On the other hand, Guy Lerner at The Technical Take points out we're at sentiment lows that indicate a market bottom is at hand:

Investor Sentiment: The Rubber Band is Stretched

So which is it? On the one hand, the problem with Lerner's indicators is they can get higher and higher as a panic crash proceeds. They're like the $VIX: it doesn't tell you when it's hit a top. Lerner's indicators are contrarian sentiment indicators, and sentiment in a crash can always get worse before it gets better.

On the other hand, Mauldin's so good at predicting market crashes, he manages to do it every single quarter. For those of you who have a problem recognizing sarcasm, let me restate it: he's a fucking broken record. Knowing a crash will come someday is not actionable information.

Oh, Mauldin also likes Casey Research.

Anyway, perhaps this all means that we get a reprieve, and maybe a local higher high testing the H&S neckline, before things then turn around and get worse?

It's more useful to know that silver just went batshit on the Globex tonight - it popped a full $1 before Sydney opened and some selling came in. I had just been spending the weekend cursing myself for being so heavy in silver miners and so relatively light in non-Peruvian gold miners. Really, the only non-Peruvian gold I have is that Swedish thing of Otto's, and that's not been particularly responsive to the gold mining bull we've been seeing.

So maybe I can see some profits from silver in the next while? That'd be nice.

Ron Paul owns Mag Silver

Ron Paul: Über Bear ?
- from Ritholtz's blog.

It's like Natalie Portman and Mia Kirshner showing up at my front door wearing slave collars and carrying a bowl of Ecstasy

To me, $HUI looks toppy right now, because it has been stuck in a range for a week, and needs to break over 580 before it begins to look positive from here. Ritholtz says that stocks don't consolidate sideways - sideways motion is a top signal.

In fact, a broad market relief could be bad for gold miners as people quit the new fad of buying gold for hedging against fat tail risk. Conversely, a broad market collapse from here could also be bad for gold miners if people suddenly remember to irrationally dump gold miners like they've always done in past crashes.

But yeah, longer-term, I'd think the assumption probably is correct that $HUI's more likely to break above 610 than drop below 500.

What's scary is, goldbugs and gold-standard kooks are always wrong, to me; but in times like the present, they can begin to vaguely resemble someone who's right. Trust is the foundation of markets. When banks and governments utterly lose trust, like you can see in the equities & CDS & interbank lending in Europe right now, then money's going to go to something else. It's already been rushing into USTs. It's also been rushing into gold. I suspect it's also rushing into silver now too.

Um, gold miners essentially print free money, don't they?

A hedge fund guy manager I was reading/listening to last week (might have been on Marketwatch's or Bloomberg's morning podcast, dunno) said his response to the broad market collapse was to go long gold miners. My god, it felt so creepy hearing that on a mainstream podcast. And he's not one of the goldbug/Ron Paul/ZeroHedge crowd, he's a "normal"!

That tells me we're about to get our most evil and perverted fantasy come true: we'll make money on gold miners.

It's like Natalie Portman and Mia Kirshner showing up at my front door wearing slave collars and carrying a bowl of Ecstasy. It scares me. It's not right. I can't say no, but I know it's wrong and I even feel dirty. Miners are supposed to suck and PM investors are supposed to get screwed. We're not supposed to win.