Friday, November 11, 2011

Friday video - Stereolab

By far my favourite Stereolab song, "Jenny Ondioline".

Or the single version anyway.

You only really need one chord as long as you have 3 guitars and a keyboard to play it on.

Wednesday, November 9, 2011

Short interest - contrary indicator?

Oh, I almost forgot.

This chart, from ZeroHedge, also gives me confidence. When everyone goes short expecting the apocalypse, chances are the dumbasses just missed it. And recently they were short to an April 2009 extent.

Now all this doesn't mean the $HUI doesn't lose 30 points by week end. It just means tomorrow's probably not the apocalypse.

and here's the payoff....

Those 3 previous posts were entirely in service to this fourth one.

Here's $HUI at end of day. Look at it.

The green is meant to illustrate that $HUI has often fallen to touch the EMA(8) before recovering. We're there right now. That's why I went to big cash a few days ago... I was no longer interested in chasing anything way beyond the EMA(8), up in the 2nd standard deviation, so I decided to let it come to me.

So today I bought $10K FR, $10K MFL, $10K SBB, and another $5K of AR. All at the end of the day. That's only 1/3 of my cash. That's in case we get a bounce tomorrow. After all, $HUI has only fallen to the EMA(8). It tends to recover from that quite a bit. And today it fell because the doom that nobody gave a shit about yesterday has suddenly hit everyone's minds today.

Note that I'd probably like to hold a few small amounts of those 4 stocks in any case. So I bought them today cos they were a fair bit cheaper than they were yesterday.

The yellow is where $HUI actually falls all the way to the EMA(40). That still could happen - target of maybe 570, tomorrow or Friday. I'd probably add there, again as much - $30-$35K. Cos it can recover from there. Double down and at least you can sell at a wash when it recovers to a lower high, if that's all you end up getting for a bounce.

I'm feeling confident-ish in this because the orange in the chart shows that RSI(8) hasn't become overbought enough yet. As long as RSI stays above 50, it has the potential to go to 80, which then would be a prime time to sell I'd think. (I say this because I tune my RSI period to the actual data instead of using 14 for everything.)

And the magenta (or for those who don't work in CAD, light purple) is just a notice that standard MACD isn't particularly triggering anything yet.

Of course there's pol risk at play here, so we could still see staggering gap-downs tomorrow.

In which case I'll be happy to watch as the more illiquid stocks, which spiked 25-35% earlier this week on newsletter & analyst pumps, collapse right down to their previous week's prices - or worse. Then maybe I might buy them. If the carnage is bad enough.

(I guess maybe a clever thing to do, if I were some newsletter publisher or bank analyst, is to publish not just a reccy but also a trade set-up that the buyer can use to get in without leaving his pants down to a potential market collapse 2 days later? After all, it's almost never a rush to buy in, and the buyout/payoff is almost never tomorrow.)

Anyway, I wouldn't be doing even that small amount of buying that I did at end of day today without a few things giving me confidence here.

1) If Italy really tanks, the dark-horse possibility then is the inflationary-printing scenario. It's really the only way to rescue the Eurozone at that point. Thus gold skyrockets, and maybe miners catch a bid. After all, Einhorn and the Chinese can't be wrong, can they? BTW: go read this post from (I-can't-believe-it-was-only) yesterday, where I was trying to think of reasons why the market wasn't collapsing the way I expected it to when I sold everything off on Monday.

2) Alternately, if Italy really tanks and doom spreads its dusty cloak over the countryside and "Satan laughing spreads his wings", and they don't print money, then you'll see bank runs aplenty - uh, and gold will skyrocket again. And maybe miners catch a bid. Um... not the explorecos, or even the more illiquid juniors, but certainly the major gold miners. (Wonder then why I bought crappy silver miners? Yeah... I don't get that either.)

3) In any case, I made $9K last week (triple my quota) and another $4K this week. So I can easily write off $1000 in losses this week and still feel fine. I can actually write off $4K in losses and still feel okay since last week was a 3-bagger. The idea with dipping my toes back in at end of day today is to take a chance to stretch a double into a triple. Odds are in my favour right now, I'd think.

4) Besides, GT was confident that we'd see $HUI go beyond 610. I've learned to just shut the fuck up and do what he says. To some extent, anyway. I'll do that here - again, because I have a bit of a cushion, per my quota as in point (3) above.

And after all, the $HUI chart doesn't suck right now. It won't til it loses the EMA(40), at least. Maybe til it loses the EMA(200), since that still gives us a 550, which ain't a bad place to bail if really the world is going to end tomorrow.

But as the sage says, "tomorrow is never the apocalypse".

Good idea to use the zoom function in your chart program once in a while dumbass

If you've opened up ZeroHedge or Business Insider today, you have likely heard by now that the world stock markets were assraped by an angry silverback gorilla with a rusty chainsaw.

Here's the chart to prove it:

Apparently, Italian yields busting over 7% today was what foretold an imminent apocalypse.

As opposed to... y'know... Italian yields busting over 6.7% yesterday, which foretold bunnies and cuddles for everyone.

So. Just how bad was it?

OMGZORZ! We lost a whole 7-8 days' worth of gains! O teh horrerz!!1!

Hint to people who still read ZeroHedge: the inability to recall what happened more than a few hours or days ago is a sign of exceptionally low intelligence. Often it's brain damage. Thankfully it's almost always ultimately fatal.

Print me a lower low and I'll be scared. We are topping, I do think; but I'm not expecting to be cliff-diving by the weekend.

So does $VIX scare you or not?

On a higher high, following the already-printed higher low, $VIX might scare me. Gotta watch that going forward. But it's still not broken through 36, which is funny as the world just ended.

But please read my next article....

longer-term, it might just be DOOOOOM

ETF Trends, a site you need at the top of your RSS list for its analysis (not just of ETFs but of the market generally), had another Investors Intelligence article today.

Here's a chart that they ran, from II, with my own pretty lines added:

Longer term, it might be we're in a pause before another cascade down. We'll have to follow the bull-bear figures going forward.

At the same time... the recency effect has to be kept at the front of your mind. This might be a chance for a wondrous headfake. I'm suspicious when the chart coincidentally prints out a picture that we've already seen before. Everyone's looking for the 2008 play... so why can't something else happen?

After all, if Europe prints money to buy up Italian debt - uh, and French debt too, within a month or so - then I assume we get inflation like crazy and GT's happy-time gold-and-silver to-da-moon-Alice scenario.

If shit gets fixed, then I'm sorry, GT, you don't get your inflation anymore, gold and silver die, and you'll have to move to the minefield of picking tech stocks and emerging market ETFs.

And sorry, but debt defaults count as "shit getting fixed".

comment - waiting for a shoe to fall or something

Some individual miners, like FR, have fallen to touch their EMA(8). Others like MFL have fallen through. But the $HUI still hasn't hit its own EMA(8) (which would be around 587 or so). EMA(8) is a fixation of mine, see.

In any case, at a top the $HUI has recently behaved by bunging a high, then backing down to or below EMA(8), then retesting the high a few times before failing. So I guess there's no reason to return bullish on miners til $HUI goes beyond 611 or so.

Will that happen? I read this morning that the Italy bond blowup has now begun to spread to France.

A good endgame for Europe would be for the EFSF to lay a heavy smackdown through bond purchases. Buy enough Italy to knock the Bund spread down to 2-3%, and then make it known they'll be making it stay there. This is, for example, how Switzerland killed the speculators - they burned their own currency overnight and the bodies piled up.

And where does the EFSF get the money? They print it. That also provides an effetive technical default, without really being a default. Just like the US has done for years already.

Anyway. I'll still be spending the next few days trying to hone the advaned trader's craft of knowing when not to play the market. I.e. I'm out til some direction is decided upon. I think it'll be a downish direction, but I'm not willing to lay bets just yet.

Tuesday, November 8, 2011

Tengo el pene Candente!

Here are 5 search strings that found my blog today:

candente copper buyout

candente copper rumours

kghm bid for candente

kghm candente copper

kghm lumina copper news

Interesting, no?

Of course it could just be 5 people from Stockhouse trying to find an explanation for why this shitty stock suddenly rose today.

Still, happy to kick myself for not owning any right now.

Would like to buy 150,000 shares of REG tomorrow, but might leave it til the market dives so I can get a discount.

muy muy Candente!

Dunno why it shot up to $1.35 at the close here, on 3-4x normal volume. And I no longer own any, tisk tisk. But wowsers, eh? Who's the guy who said Candente was a screaming buy, eh?

Spanners in the works

Several things putting a spanner in the works, making it difficult to read what's going on.

1. Apparently some shitty Chinese gold miner is thinking of buying other shitty gold miners round the world. I think we heard such bullshit last year as well, except maybe that time it was all about shitty Chinese copper miners wanting to buy other shitty copper miners... but the rumour is still enough to float the miners even when silver's down and markets look toppy. Maybe we can get to $HUI 630 after all.

2. Apparently some hedgie with more money than brains says gold miners are a good deal right now, and so he's been buying since Nov 1st. Great, now the whole scene catches a bid. Fuck off hedgies.

3. If that ain't enough, the Swiss have threatened to yet again devalue the franc. Thus money leaves francs and into gold. I'm just shaking my head now.

Monday, November 7, 2011

been selling, not buying

Dumped a bit of GPM at a profit, now that Commander Sheridan has waded in and bought half a million shares to drive the price up. No, I don't know that; I'm just assuming it was him.

Also dumped some SOL to the Monday pump, but am keeping some in case the market doesn't tank this week to give me a back-in price.

Holy crud! I'm up to 40% cash. I'm never up this high. You should use me as a contrary indicator and assume that $HUI's going like a rocket to 888. Cos after all, I'm always wrong.

In fact, I saw $HUI at 606.66 today, and immediately thought that was the perfect time to go double-short the miners with HGD. We'll see... last Tuesday was brutal, so maybe tomorrow will be also? People seem to be concerned about those Italian bond yields.

I'm sorry I dumped XG but still made money. I'm happy I'm still holding my small positions in AR and GOZ.

I own far too much REG, and really want to know where the heck anyone could get the idea that the upcoming 43-101 will show 3 billion pounds copper equivalent. At the same time, if it's true that it's more than just a ring-shaped deposit, I'll be happy to follow the newsflow just to read about the geology.

It would really be cool to be a geologist... and seriously, I'd be happy just to apprentice with some dude somewhere. Frankly I doubt any pro geo would assert that anyone would have to go to school for 4 years to learn about rocks; the same as with engineering, you really don't need the schooling for anything except to provide a roadblock for entry into the field. Apprenticeship really should be the way that fields like that operate. Just like they did for the previous 2000 years.

Then again, I dunno how I could continue day-trading stocks if I was up in the Atacama collecting chip samples. Plus, if I happened to stumble across something that would make for a good news release, I'd definitely insider-trade the info all to heck, and I doubt people would like that.

Nah... better to retire on the money I have.

Though getting interviewed by some hot chick in a bar would be nice. I guess that's how you get Brent and Mickey to really open up... whiskey and babes.

Anyway... I'm sorely tempted to short the universe right now. I'm probably turning into Tanashian, as I said before.

brief market comment

Things look toppy.

Yeah, stuff can go up a bit from here. And I still like holding my (unfortunately too small as it turns out) positions in SBB, AR and GOZ. But I think things are a bit done-ish. The Q looks like it's printing a lower high, the $HUI has flown from 500 to 600 too fast (i.e. the slope is too high compared to previous advances), the $HUI's RSI(8) is inching into the overbought range....

And generally, people look too happy considering this market's advance has occurred while Italy's bond yield has flown up to 6.66%.

In fact, being a practicing Satanist, heneverI see the number "666" come up, I tend to pay attention.

GT's newsletter from this weekend outlined a bunch of bearish divergences. In fact, his first sentence began "it may be early to be looking forward to what comes next..." - and yet, this particular advance has been way too fast in my opinion. Maybe I'm turning into a Tanashian clone, uneasy when markets aqre good and happy when they're crashing.

I do certainly feel very happy when I see a stock trading at 20% less than what I'd recently sold it at. Then again I usually dump it after a 10% advance and take profits.

So anyway... I'm at 25% cash and willing to sell some more stocks. I feel sad that I dumped DPM before its advance was done... but then again, when you get handed a 10% win in one week, my philosophy is that you take it and move on. I don't like handing won money back to the market.

No point into shorting the $HUI til we see it fall below its EMA(8) - although really, some people might say we have a good short setup now with $HUI nearly 23 points above its EMA(8) and bouncing off 600-area resistance. After all, it does have to fall back to its EMA, at the very least. And why should it fly above 600 with gold lower than it was before?

Then again, when you look at the $HUI:$GOLD ratio, which is an ugly descending channel proving that indeed miners do suck relative to the metal, you see that it regularly bounces down from the EMA(40). But right now EMA(40) is at 5.31, and $HUI:GOLD is at only 5.08. So does $HUI truly have further to go before it collapses?

Then again - go chart the $HUI:$GOLD versus its EMA(8). It's in a descending channel, you'll see - and it almost NEVER has a daily close above its EMA(8). (If it were a stock you'd say it stinks.) Where is it at right now? Its EMA(8).

What to do, what to do....

I think I'll hold the cash I have right now. Be ready to sell my profitable positions when weakness strikes.