Saturday, May 26, 2012

Upon updating the office hockey pool....

Upon updating the office hockey pool and sending it out, I came to a realisation:




 In fact,

Even better,



:-)

Though to be honest, with a Los Angeles-New Jersey final, I do indeed feel cheated. LA's a good team and all, I would have preferred St. Louis but LA's a good bunch of kids....

But if NJ's truly the best that the East has to offer, well that's just sad.


some uninformed comment on India for you

I don't know much about India, just what I get from (mostly) Kiron Sarkar at Ritholz's blog. But here's what I'm operating on:

1. India's a clusterfuck, but it always has been. Never forget that. The country will never become as politically competent as (say) Peru or Brazil.

2. India does have some severe balance-of-payments problems right now. The gold tax was meant to help address that - much of India's trade deficit is due to the rabid consumption of gold.

3. India's biggest problem is that they have massive producer subsidies, to help out poor farmers - as well as consumer subsidies for poor consumers. Problem is, when you have a third-world economy that begins economic expansion, those subsidies hurt the state's coffers more and more. Especially consumer subsidies, when in a commodity-inflationary environment. Eliminating them is political suicide, and continuing them is economic suicide.

Point 2 might get fixed with continued rupee devaluation. Or something, I dunno. But point 3 only ever gets fixed by economic collapse and broad hardship.

So goldbugs better fucking hope that China continues to produce more demand for gold, because India's becoming dangerous and it'll be bad for the POG when that 25% of total demand takes a multiyear holiday.

I'd be very interested in finding out about gold demand trends in the broader Indochina world - I was under the impression that Indonesia, southeast Asia, and so on are heavily influenced by Indian tradition, and maybe they can take up India's slack entirely. But I don't know that. So there's some research to do in future, I guess.

Friday, May 25, 2012

Firday videos: the only other Sarah McLachan song I like

Here's the other Sarah McLachlan song that I like.



I'm sorry, but I think it's a really pretty love song.


There are some fitting lyrics in this for goldbugs too:

"Though this world I stumble, so many times betrayed - trying to find an honest word, to find the truth enslaved...."

Thursday, May 24, 2012

Why anything to do with Russians is a bad idea


Yeah. Something must be making this stock go down.

Maybe it's the fact that their mine in Val d'Or can't dig gold out of the ground at a profit, maybe because among other things the company failed to pay the bills for the workers' health plan; or maybe it's because they're selling their only profitable mine, a tiny 19th-century operation in Peru; or maybe it's because now that the company's out of money it has to sign up for loans from companies that happen to be connected to management; or maybe it's because they're headquartered in the British Virgin Islands, which apparently is a red flag for any "publicly listed company"; or maybe it's that the TSX has put them under review, with threat of a de-list.

Or maybe cos it's run by Russians.

Rule of thumb: never invest in a company with Russians in it. In any way shape or form whatsoever.

Wednesday, May 23, 2012

further market comment - goldbugs took a bong hit today

And later that same day, with the broad markets down, copper still looks horrible, China still looks horrible, PMs are still down... but the GDX is painting a bullish outside day candle.

If this can stay til the end of the day, then I will be very hopeful that last week was a bottom. Because by all rational expectation it's not supposed to be doing this, and yet it is. It's above the 20-day mean and RSI is over 50, and that's not happened in recent memory either.

GDXJ still kinda sucks though, as do COPX and SIL.

But I hold out hope.

market comment - desperate people in hopeless straits find solace in small mercies edition

Despite the broad market collapsing, industrial commodities collapsing, the emerging markets collapsing, and gold and silver inexplicably collapsing, the GDX is failing to puke its own ass out into an endless pit of everlasting oblivion.

Yet.

In fact, it's not even collapsed below its own EMA(8) either.

Yet.

NASDAQ is sticky around 2800 and S&P 500 is sticky around 1300.

A continued liquidity flush beyond this point shouldn't be good for the miners. So let's see what happens in the real world... I'm open to GDX doing the stupid thing on the upside.

Tuesday, May 22, 2012

I never said Peter Grandich wasn't a prick

I do respect Grandich's ability to pick the tops and bottoms of markets. After all, in the old days, he was a really good trader.

But, of course, he is still a prick. A good illustration of this is today's little poem:

Occupy Golf

You could try to persuade him that the point of the Occupy Movement is not to confiscate wealth, but instead to get rid of the plutocratic sysem where Wall Street's screw-ups force the honest workers out of work and into poverty - and then Wall Street picks their pockets to get paid back for their stupid losses. It's not that rich people are rich: it's that they've corrupted the system so that their wealth is stolen out of the pockets of the working class.

Then again, much of the Occupy Movement has certainly been taken over by real Marxists and Maoists anyway, so who's to say what they really are?

Still, the main problem I have with Grandich's cuntness is that he shows himself to be quite un-Christlike in his behaviour.

So, here's a little open letter to Grandich:

1. Proverbs 6:17,19: The Lord hates a proud look, and his soul detests him that sows discord among brethren. So quit being a prick.

2. Ezekiel 33:31: My people come to you, as they usually do, and sit before you to listen to your words, but they do not put them into practice. With their mouths they express devotion, but their hearts are greedy for unjust gain. So don't be a prick.

3. Luke 12:15: Then he said to them, "Watch out! Be on your guard against all kinds of greed; a man's life does not consist in the abundance of his possessions. So stop being a prick."

4. First Corinthians 5:11: But now I am writing you that you must not associate with anyone who calls himself a brother but is sexually immoral or greedy, an idolater or a slanderer, a drunkard or a swindler. With such a man do not even eat. Because he's a prick.

5. Matthew 19:21-23: Jesus answered, "If you want to be perfect, go, sell your possessions and give to the poor, and you will have treasure in heaven. Then come, follow me." When the young man heard this, he went away sad, because he had great wealth. Then Jesus said to his disciples, "I tell you the truth, it is hard for a rich man to enter the kingdom of heaven. Especially if he's a prick."

6. Revelation 3:17: You say, 'I am rich; I have acquired wealth and do not need a thing.' But you do not realize that you are wretched, pitiful, poor, blind and naked. And quite a prick.

So, Peter, I know you'd never actually come across this little post, and even if you would you'd probably never slander it with a response; but just so you know, no matter how many pseudo-Christian platitudes you might respond with in an attempt to fake some pretend humility, the fact remains that whenever you post anything on moral and political topics, you slander Christ by associating yourself with him - and reveal yourself to be truly in the thrall of Satan.

Monday, May 21, 2012

Afternoon comment

OK, so it's after 3PM eastern, GDX is up over 3%, it's over its EMA(16). That's good, I'm satisfied that you might be able to think at some point in the future about investing in shitty gold miners.

S&P is up far too strongly, same with the NASDAQ - did someone pass out a bowl of crack or something? Copper's up, coal's up, steel's up. China ETFs are up. This all despite $USD and Treasurys not going down by much at all.

So, what? Where's all this money coming from to pile into all the risk assets? Or is it just that last week the hedge funds were all naked short, and now this week the hedge funds are all naked long?

So at the very least this is a bounce out of the oversold mania.

Frankly, I don't think there's a reason for the market to collapse until after the next Greek election. What do you say?

Adrian Day still likes copper

Adrian Day gave a talk at the New York Hardass Ets Conference and reiterated what he's been saying.

Here's a writeup.

Legitimate technical analysis for you



Three black crows candlestick pattern, target of $21.

I know I promised, no more on this topic... and if only other people would quit posting about Facebook I'd stop posting about it too.

PS, my post was more witty cos it makes fun of chart analysis.


EEM, FXI, UUP, IEF - bored with the old hairdo




EEM and FXI both look like they have gotten a little tired of down and now want to give "up" a try. Considering they have recently printed RSI(8)s of under 10, that's probably a good idea. Still, again, they're both way the fuck below any EMA you might care to draw.






At the same time, the 2 reservoirs of fear money, the US dollar and the US treasury, look to be saying "meh" right now.

Dunno... I'll fall back on psychology and say that both these charts might begin to indicate that the present macro situation of the markets is played out, and the masses are now trying to discern what they should do next: keep panicking? Or latch onto some new fad?

Market comment - first impression

Firstly, we're celebrating the Queen's birthday today, so I don't really care what happens except as a setup to later on this week.*

But I find it interesting that gold and silver drifted down all night, yet GDX and GDXJ are up over 1%.

Yet I don't find it too interesting because it's still retail hour, and it seems morans are the people most likely to buy before 10AM.

Still, GDX at this moment is at $42.38. It's above EMA(8). EMA(16) is just above at $42.69, and the Bollinger mean is at $43.52. Gold and silver are trending vaguely upwards this morning, and while the PMs are still only at Thursday's close price, the miners are above their own Thursday's close. Positive bias to the underlying, that's nice.

Oh, and here's some noise and radar-jamming from the Lamestream Media for you:

1. Some fellow in China (think his name is Wen?) was apparently giving a whole raft of interviews this weekend where he was coming out in favour of Chinese QE.

2. The commie is losing support in Greece. Elections are about peaking too early, and it looks like the commies have indeed peaked, and now the old corrupt cronies are winning votes back. Incidentally, after reading that Vanity Fair piece, I am now permanently convinced that Greece must leave the Euro, so I'll be voting for the commie.

3. Meanwhile Spain's banks are going bankrupt. And someone in France. By the way, add a "u" to "France" and you can spell "Furnace". Clever, eh?

4. Bespoke Investment Group had a great weekend subscriber-only wrap-up, where they pointed out that broad sentiment is suicidal.

5. Oh, and you're seeing a massive short-squeeze in wheat right now. Supply/demand fundamentals be damned, as the great commodity traders will say: the problem is, everyone was on one side of the boat, shorting wheat, and now that the supply news is out, that boat is going to rock like fuck as everyone has to either bail or shift sides.

6. Kitco is very slow this morning. I like that.

No links, I can't be bothered, go fuck yourself and then use Google.

So anyway, today if you're like me, you might want to watch GDX for a break of $42.7 and then $43.6 or so. Failure means I remain uninterested in miners. And a 2% pop first thing in the morning doesn't look like the type of slope that can continue all day. But we'll see.

Interestingly, Yamana's already broken above its Bollinger mean in US trading. And RGLD looks great too, almost threatening a breakout. Here - I'll give you some charts.




So either this new strength is a fakeout and these guys both have to fail their moving averages, or Yamana and Royal Gold are leading the pack in a new uptrend. Up to you to decide which is going on here. Me, I remain guardedly meh.
 
* - as an aside, I prefer the first Queen Elizabeth. She destroyed the Spanish Empire, built a navy that ruled the seas, hired pirates to circumnavigate the world, and also executed everyone who tried to piss her off. Now THAT is a monarch to like! If only today's Imperial Majesty had it in her to execute a few people! First on the chopping block would be Rupert Murdoch, of that you'd be guaranteed. That would mean no more Fox News... Sweet Mother of Jesus, that would make the world such a better place.

Why Greece has to be ejected from the Eurozone

Here's that big Vanity Fair article from a year and a half ago on why Greece is a clusterfuck and needs to be kicked out of the Eurozone.

Hint: it has nothing to do with government spending. It has to do with the fact that no Greeks pay taxes, so they expect Germany to pay for everything.

If you didn't read it when it first came out, please read it now.

Sunday, May 20, 2012

Hard commods - doooooom?

So how are commodities doing?

We'll ignore softs for now, since their supply-demand behaviour is a lot faster - price of wheat goes up, you plant more wheat next year - and also depends on weather - Australia's not having a drought this year.


Copper still doesn't look horrible, just yet. I mean, it's well within its range. But it better hold $40.



Coal has already broken below its neckline, if you believe there's a H&S here. Target? Um... $4? See, if you use a linear chart it does target $4.

Though apparently China's moving away from coal power. So your thermal coal should be going down. And a China slowdown should hit met coal. I dunno if this ETF is thermal coal, met coal, or both.



Steel has a strong downward bias, and again that same H&S. Big-time puke, something like 15% in two weeks. Fuck, you're lucky you're only in junior miners, boys!

I guess one upshot of this is, yet again, hundreds of thousands of steelworkers are about to be laid off. Thankfully, we don't have any in North America anymore.




Nickel, I guess, is a bullshit ETF. But over a weekly chart maybe there's still some sort of correspondence to the underlying. Anyway, this chart also isn't good.

So, basically, your China, emerging markets, and hard commods are all flirting with the idea of pretending the optimism of all 2010 is just an illusion. That's 2010 - that's the good year, the one where you made money. Now everyone except copper is negative over the past 2.5 years.

Smells to me like one great fucking rolling top. With dooooom on the far end, fast approaching us.

Emerging Markets - doooooom?

How are emerging markets doing?



Ouch. Still collapsing. RSI(8)=10.





Maybe on this chart, the technical analysts can be useful in setting a target? This certainly looks like a H&S, target of... $18? Seriously? You shitting me? Emerging markets go down a further 50% from here?

Well, if so, then there must be doom afoot, no?

Emerging Africa's puked bad, but still has a positive long-term bias. Neckline is what... $58, you think?



And Emerging LatAm also is puking, bad. Downward bias. Dunno where the neckline is, but this goes down to... what, $30? Again, are you shitting me?

Maybe you can take solace in the fact there are too many shoulders in these charts? I mean, can it be a H&S pattern with 2 shoulders on each side?

China end of week - is this the problem with the ETFs?

So how's China doing?






It all looks pretty hideous. I guess at this point, a technical analyst would try to find a place where this carnage stops. Me, I don't see the reason why you wouldn't just wait til they bottom and then start talking about them.

And how do you know when they have bottomed? Well, criterion #1 would be that they've stopped going down.




Cos otherwise you'd be left grasping at straws here. What's the next target? Horizontal resistance at $28.50? Meaningless. Fucking meaningless. Wait til it stops dropping.




And y'know, the funny thing I pointed out a while ago was that the Shanghai index wasn't caving the way the above ETFs were.

Is it maybe because the $SSEC is not an ETF?

I guess if someone less lazy than me were to do the math, I might figure out that the stocks that make up the ETFs were trading at a higher multiple than the $SSEC because they're a lot more exposed to foreign capital. Is that so? You go figure it out.

If it is so, then maybe at the beginning of May, the foreign capital began draining out of China, hitting the ETF-exposed stocks harder than the broader index? So they go down 15-20%, but the less-exposed broad only loses 4%.

In which case, the clobbering you're seeing has a cause external to China.

And it started in the beginning of April, not in May. Compare $SSEC versus the ETFs over that period, again. ETFs began underperforming in April.

Anyway, that's just my theory. You can go ahead and do the math, I'm a big picture guy and leave the grunt-work to my TAs.