Saturday, September 24, 2011

Grandich calls this a buy op for silver and gold

Grandich is saying that present gold and silver prices are a buy opportunity. That actually makes me feel better about dumping cash and having bought a bunch of stocks before the close Friday.

I doubt that the crash Friday was because of the margin raise BTW. I still think it would have been someone liquidating. And gold stocks seemed a bit overdone. We'll see what happens next week.

your source for dismal hellscapes

I checked the stats on this blog today and found that one of today's most popular search terms leading to my blog was "dismal hellscape".

That makes me proud.

blah de blah neutrinos blah de blah part ii: the legend continues

Or just go read XKCD.

Or read it here.

UPDATE: I was enough of an XKCD fan to note that panel 2 is a variation on #386:

How about you?

Blah de blah, neutrinos blah de blah

Otto had a post about Ritholtz posting about a bad CNN report on faster-than-light neutrinos.

He said this:

1) Scientists confirm that neutrinos do indeed travel faster than light
2) They then find a way of controlling a flow of neutrinos.
3) This controlled flow is then used to design a messaging system (it can be pretty simple, e.g. one burst of neutrinos is a 1, a double burst is a zero, binary computer systems take it from there)
4) As soon as the messaging system is understood it's used by somebody in, let's say, 2025, to send a message back to the person who invented the neutrino-control-and-messaging service on, let's say, May 23rd 2012.
5) The message sent back in time alerts us to a pending catastrophic event in, let's say, 2018 and how to avoid it.
6) We in 2012 take the necessary measures to avoid the event, thus it never happens.
7) This then negates the need for the message sent in the year 2025 to the year 2012.
8) Which means the message is never sent.
9) Which means the catastrophe is not avoided and it happens.
10) Wait a minute.....

Unfortunately, there's a mistake made in step 7. Here's the corrected version:

1) Scientists confirm that neutrinos do indeed travel faster than light
2) They then find a way of controlling a flow of neutrinos.
3) This controlled flow is then used to design a messaging system (it can be pretty simple, e.g. one burst of neutrinos is a 1, a double burst is a zero, binary computer systems take it from there)
4) As soon as the messaging system is understood it's used by somebody in, let's say, 2025, to send a message back to the person who invented the neutrino-control-and-messaging service on, let's say, May 23rd 2012.
5) The message sent back in time alerts us to a pending catastrophic event in, let's say, 2018 and how to avoid it.
6) We in 2012 take the necessary measures to avoid the event, thus it never happens.
7) This creates a 2025 Version B that replaces the 2025 Version A that sent the message.
8) The 2025 Version B now will not send the message to 2012, but that's okay because 2012 got the message from 2025 Version A.

I never thought I'd say this... but the solution is easy to see if you'd only have watched more Star Trek.

But it doesn't matter anyway because the neutrinos aren't actually travelling faster than light. From the little I've bothered to read about it, what's happening is analogous to a waveform travelling faster than light, which happens all the time believe it or not. I.e., it doesn't seem to me that they're measuring the speed of a single neutrino... um, nor could they, I guess.

Also, they're supposedly travelling only a fraction faster than c, and as anyone will tell you, "science ain't an exact science with these bozos". Even if the accuracy of the experiments can't be questioned, there are still possibly all sorts of ways and places where c may be found to be vaguely variable. I personally think we'll someday find enough variability in c to explain away the various measurements that have led scientists to believe in all that silly "dark matter" and "dark energy" chickenshit.

Don't call me old-fashioned for disbelieving "dark matter", a form of matter that doesn't really interact with normal matter, is made of some strange kind of matter we haven't figured out yet, and which no scientist seems even remotely able to explain in layman's terms; blame the scientists for being old-fashioned, pining for the days of the "luminiferous aether".

Personally I prefer John Moffat's variation of MOND as a way to explain away all that dark matter bullshit, because he can actually explain it to a layman in a book.

Anyway... as for the story itself, it's easy to assume that the media got it all horribly wrong and are presenting a childishly oversimplified version of the story for an audience that they assume failed fucking grade 6 physics. Not that the masses really are stupid, but rather that the media always treats them that way.

Because - and while this is the 4th law of the internet, it can be applied to older media - it's always the most stupid people who complain the loudest about things they misunderstand. Blame it on the democratization of society. Used to be stupid people would keep their fucking mouths shut in polite society. But the media cater to complainers, and the complainers are always the most stupid. You know what I'm talking about if you've ever been on a bulletin board system.

And as for the "sending messages back in time" bit. It really seems like all the vaguely-possible methods for doing this sort of thing (wormholes, etc.) require a whole load of energy, far more than we can ever find. Basically, you're trying to violate the 4-dimensional structure of the universe, by sending a message into a light cone from outside of it. That sort of thing really can't be done - the light cone's edge can be fuzzy (if light has variable speeds), it can maybe even be bent a bit (depending on what gravity's doing around the area and how you're rotating, if I remember), but a light cone is still pretty much an inviolate thing. This goes way beyond applied physics, to basic causality and stuff.

Anyway... I'd rather go play some more Civ 4. Just wanted to vent about the stupid mass media and their poor reporting of stories.

As if you didn't already know that they get shit wrong all the time.

Friday, September 23, 2011

OK I don't get this

Assuming that the world is going to end, silver is going to $0.01, and the commodities are done for....

Why the fuck to traders still get to go home early on Friday afternoon?

Seriously dude. Was there no action on Friday afternoons in the last market crash? Cos I wasn't around then.

I'm seriously beginning to doubt this whole thing.

interesting factoid

Hm.... silver is down 15% as of this moment, yet FVI is only down 10%. Normally FVI gets beaten down harder than silver, at least temporarily. Is this a clue that the silver selloff is perceived as being overdone?

I had sold off the rest of my RIO yesterday around $2.95 or so. I bought back some RIO today at $2.75 - why not? I assume Gold Fields would call off the buyout in this environment, but then again, RIO's still worth more than today's share price, according to my old-price-of-gld calculations.

Otto loves FVI to death. Well, my own fave is RIO. Happy to have a bit back in the fold.

Art Cashin: involuntary liquidation?

Go read this.

Here's the interesting bit for me:

"I have been lucky enough to build a mildly successful career by seeing and relating the various causes and effects that move markets. Yesterday had many contributors. European banks tottered amid more rumors and, there was a sense that in the U.S. solutions were slipping away as political acrimony grows. Even the old reliable China growth story got dinged. Chinese manufacturing numbers hinted a slowdown if not recession. FedEx added to the China worries by noting a sharp drop-off in Asian technology shipments. There were also reports that folks were having a tough time getting paid by Chinese counterparties.

"All of that had a quick and discernible negative impact on markets. But, the selling was far more pervasive and dramatic than simply a conscious adjustment of positions based upon new data. Thursday’s action screamed liquidation - and not all of it voluntary."

Yeah... maybe these moves are happening because of something the media hasn't told you about yet? I'm going to venture this:

If the base metals are collapsing and gold is collapsing but SPY is maintaining support, it's not about Euro banking collapse.

And if the base metals are collapsing but SPY is maintaining support, it's not about a US recession.

Chew on that.

only one comment to make

Here's an observation you might find interesting.

Silver is broken, you can see that. Base metals are broken, you see that. The $HUI is also broken, you've seen that.

But the S&P 500 is still within its consolidation trend. I.e. it's not broken down below 1100 yet.

I dunno, I find that interesting.

Thursday, September 22, 2011

market comment

My real concern is what's up with the base metals. Go look it up.

What happens this time when the S&P 500 closes below 1200? Up to you to figure out.

In half cash now. Some few things I can't sell right now. Want to be the type of fellow who stands at the sidelines until he sees a chance to act. Dunno if I can do it.
S&P 1119 is going to be an area I want to watch.

The most interesting time will be right around 2:30; I wanna see if we get a waterfall decline as margin traders get liquidated.

Two kinds of stocks I'm still holding:

  1. Miners who actually pull gold out of the actual ground and actually sell it. Gold is not doing badly.

  2. Explorecos who don't actually mine anything; REG is an example. Who cares if copper drops to $3? They don't have any yet. The best they have is dirt with a slightly orange tinge.

what I suspect....

Copper below $3.50. Nickel below $8.50.

In the past 2 months: SLX drops from $70 to $44; KOL $50 to $32; JJT $67 to $46; ALUM $15 to $10; but PALL's not so bad.

Maybe I'm hallucinating, but it seems like these numbers are predicting an emerging economy crash, not a Europe crash.

As for copper, I tend not to listen to anyone named "Doctor"; they're usually self-important twats who don't think they have to give the world anything anymore because the university's given them tenure. But master's students like steel, coal, tin, and aluminium probably still have something valuable to say.


Buletin: God is shitty Excel programmer, mistakenly divides by zero, #REF result destroys universe

Yeah, and then I sold FVI and KGN. Made some money back there.

I'm expecting another wave down in silver, as the commodity traders will have just been wiped out with a 7% fall. Margin call time will be fun. Lotta corpses getting carried out tonight.

Bulletin: machines arise, destroy all life

Yeah, I'm really thinking today's not the apocalypse, and we just had some robots freak out over the UST 10-yr yield dropping.

So I bought some really beaten-down stocks. $20k FVI @6.24, $20k LCC @6.15, $10K AR @5.70, $10K KGN at an amazing $6.50 (wonder what caused that).

Wanna make up for my hasty dumping of FR, MFL and BTO.

I'm still a happy holder of REG and RIO. REG was slaughtered because of poor liquidity and is coming back nicely. RIO still looks very strong.

The old trader's motto "don't just do something, stand there!" probably should have been applied this morning.

Bulletin: asteroid hits earth, destroys all life

Yeah, I don't need to tell you what's happening today.

I've made a list of support points for stocks. Some have already been broken.

BTO $3.82, $3.45.
FR $18, $16.
FVI $6.05, $5.27.
GUY $8.80, $8.55, $8.10.
GOZ $.80, $.72, $.70.
BCM $4.50, $3.80.
GPR $3.00, $2.70.
YRI $14.50, $12.50, $111.20.
AR $5.20, $5, $4.60.
PVG $11, $9.50, $8.50.

I took some vicious losses today dumping some liquid stocks over the side - not the illiquid stuff like GOZ or REG. But that's okay, as I already took big profits on RIO, and luckily sold FVI yesterday before close (and bought back today at $6.20 cos I felt the selling was overdone as usual).

Taken a few heavy short positions, though I think most of the short money has already been made.

What caused this? Fear of a Chinese contraction? That's the only data I can see. That, or maybe all the robots have freaked out over the drop in the 10-year yield and predicted the apocalypse on faulty data.

Who cares. Let's ride the rollercoaster, shall we?

$HUI is a disaster, as are the other miner ETFs. Copper and silver are "shot out of the shy like clay pigeons", as Gary says - which is untrue, really, since clay pigeons fragment. Only real pigeons fall when you shoot them.

Wednesday, September 21, 2011

Short interest in RIO

Rio Alto Mining Limited ( RIO )

As of Short Volume Change In Volume
15/Sep/2011 481,376 315,826 +
31/Aug/2011 165,550 -260,350 -

So... a bunch of people are/were short RIO at $2.80 and below....

So... all that stock I just sold at $3.25, I may soon be able to buy back at $2.50-$2.70, eh?

I always love getting yet another chance to make money on the same stock. And here I thought RIO was going to be off my radar in another few days.

Even Canaccord is coo-coo for cocoa puffs

From today's letter:

"The Canaccord Genuity Precious Metals team continues to believe that equities are inexpensive relative to the gold price and to historical trading multiples. Canaccord Genuity Portfolio Strategist (and former bruising Canadiens forward) Mario Roberge adds investors should scale into any price weakness in gold equities as this may be the last pause before a phase of accelerated relative price appreciation or mania begins."

Is that a good thing?

Obama quote of the day

Nice quote from Obama, re: raising taxes on the rich: "This is not class warfare. It's math."

Too bad he was born without a pair of balls, or he might have been a half-decent President.

Interesting article on Bloomberg

Here's an interesting Bloomberg article:

Bullion Vaults Run Out of Space on Gold Rally

The pessimistic interpretation: contrarianism, see also spoiling everything, see also being wrong until you're right.

The optimistic interpretation: to da moon Alice!

Investors shift into gold miner ETFs

ETF Trends has a neat article today:

Investors Shift Into Gold Miner ETFs

The pessimistic interpretation: whatever a contrarian would say.

The optimistic interpretation: gold miner ETFs buy gold miner shares. Self-fulfilling prophecy. As well, maybe they're right?

Gold vs miners

Otto brings up a good point.

I've been following $HUI, GDXJ, and SIL, but also been following the metals, and adjusting my risk (i.e. how far into the miners market I am) based on all that.

However, if the miners are now outperforming the metals, I should be worrying less about the actual metals, and instead I should simply watch the miner indices/ETFs.

Speaking of which... GDXJ and SIL are still below the EMA(8)s, but are threatening to break above. So watch those today.

Tuesday, September 20, 2011

Brent Cook is expecting a European liquidity problem?

GT notes on his blog today that Brent Cook is expecting a European liquidity problem.

I'm sorry, but I'm starting to think that everyone and his fucking brother is expecting a European liquidity problem.

They can all expect a European liquidity problem and get it right, I agree. But to me a fantastic contrary indicator is when an economic geologist starts strategizing his buy/sell thesis on a macroeconomic condition.

I've started to give up on the idea that a European liquidity problem is actionable trading data right now. Yes, Greece will default; yes the French banks are so undercapitalized that they're essentially insolvent; yes it will take a fortune in money to fix it.

I frankly think that it'll all get fixed the Karl Denninger/Iceland way, by fucking the capitalists in the ass as they exactly deserve. This is because the US solution, if tried in Europe, will probably mean another Paris Commune style revolt, but continent-wide. There's no way the European citizenry will allow their money to be handed over to banks to "recapitalize" them. They're not stupid fucking retarded sheep over there, like we are over here.

Anyway... yes, the liquidity event may still come. But I'm getting awfully fucking tired of waiting for it and would rather make some money in the meantime.

quick status update

$HUI has bust above the EMA(8). However, SIL, GDXJ and GLDX aren't so great.

I grabbed some FR on Biiwii's reccy, and also bought back some GPR and GOZ. But then at the end of the day, stupidly, I had to chase 20,000 shares of REG that got offered at $1.12.

I guess it's not stupid since I'm expecting their met and 43-101 to be good. Then again, I'm more "hoping" than "expecting". Oh well.

I sold a fair bit of RIO at $3.20 and up to lock in some profit. But I'm still lower on cash than I want to be. I guess I have to trust $HUI to print a higher high this week to actually PROVE that it's going somewhere.

Monday, September 19, 2011

Yarr, this be thy market comment, lads.

Arr, mateys! Ye liquidity be shirkin' away like a scurvy dog be told to pay the devil.

COPX be havin' 'is hide thrashed, by over 5% today, me lads. An' silver, that accursed metal of the foul Spanish dogs, also be losin' its gumption. European market be spinnin' in a maelstrom, afear'd o' plummetin' down to Davey Jones' locker, so they are.

An' yet our fine vessel the $HUI is startin' the day with good stren'th. Keep a weather eye on the EMA(8), and we'll see soon whe'r our course be true.

Yarr, etc., etc.

Sunday, September 18, 2011

Paul Zweng on Gold Report

Otto's best bud Paul Zweng is interviewed on the Gold Report this week. Even gives Otto a pump.

Regulus Resources

Been reading up on REG's Rio Grande Cu-Au-Ag project in Argentina.

Their September corporate presentation is on their website right now. Presently it asserts there will be a metallurgy report due in September, as well as a 43-101 on whatever holes had been drilled before this year. (I say "asserts" because every NR keeps pushing these dates back. As if, y'know, there's something wrong with them.) There was also a new drill program begun in July, expanding their inventory of data by about a third.

I prefer seeing things in pictures. So here's a couple straight from their corporate factsheet:

(What's very sexy about these pictures is the scale bar. I work in civil engineering, so the first thing I look at is the scale bar. Look at the fucking scale bar!)

Now, what follows for the rest of this post may all be completely and utterly wrong, since while I've worked in engineering I know nothing about economic geology. But it seems like these pictures show a 2500m x 200m x 200m deposit, with leftovers. That'd be about 200m tonnes of ore...?!? Yeah, maybe that's just for the "0.1% Cu outline"? I guess nobody mines 0.1% Cu. So okay, that's misleading.

Looks like about a 3:1 strip if you mined the low-grade, but probably a fuck of a lot more strip waste if you were only going after the high-grade zones, assuming they're subvertical as the picture shows. I guess the high-grade areas yield minimum 0.4% Cu, 0.5g/t Au, by REG's own admission. Then again, hole 34 yields 189m at mineable grade, and the cross-section above shows it cutting thru both high- and low-grade zones.

I guess anyone looking at this should (surprise surprise) ignore the stupid corporate presentations and go searching Sedar for each individual hole, eh? And I guess you'd have to look them up under Antares, not Regulus.

I'm sorry, but looking at that last paragraph, I don't think Casey would bother digging that deep, so they won't be pumping this anytime soon. (Explanation: someone on Stockhouse suggested REG was about to be a Casey pump.)

Seriously though. Gee, I wish I could study economic geology somehow, cos I'd love to resource-model this. Honestly, I think that would be fun. I guess the quantity of truly mineable "ore" is going to be entirely dependent on economics: I mean, are you only going after the stuff that's 0.5% Cu & 0.5g/t Au? Then what if you bring it down to 0.3% Cu & 0.3g/t Au? How much more ore do you get then? What's the lowest grade that's ever mined? It is simply dependent on economics?

Well, I guess if your economic cutoff shrinks this down to only 20Mt of ore, that's still $2/t for a $40M FD market cap company. Gross value of ore pre-strip pre-anything, at $1700/oz Au and $4/lb Cu, would be around $130/t... how much do majors pay for ore? I really doubt it works that way. But if the net value of the ore after costs were $10/t, giving 50% to Pachamama, that still leaves upside for REG, no? How much does Cu/Au oxide cost to mine, per ton? I should really look that up.

Oh well.... One for my handy-dandy rogue Peruvian analyst to do the math on, for me, someday.

It's nice I can finally buy it for much less than $1.40.

Also: You can read the Dundee PDAC write-up on Regulus at this link.

Friday video, Sunday edition.

Some Neil Young, just for the heck of it all.