Friday, February 7, 2014

GDXJ exploding to end the week


shows GDXJ up 4.5% today. Meanwhile gold is up less than 1%.

So is this just a short-covering thing? Someone was hoping the juniors would punch thru support, and it turned out not to happen? And they're stuck buying back junior miner stocks at 2:30 Friday afternoon?

That'd be a case of really stupid planning if it were true.

Strangely, Rio Alto is holding up with GDXJ, while B2Clive is the laggard today.

A quiz on the legend of Brent Cook

I wonder what Cookie has to say about Anglo Ashanti's new reef boring technology?

Anyway, he's making a lot of appearances doing the old "intro to explorecos" thing again. It must be the beginning of a new cycle. For example:

Mineweb - Brent Cook on what to look for ahead of a bull market in 2015.

Also, according to this article, Cookie is now legendary. I knew this already, but did you? Here's a short quiz on the Brent Cook legend for y'all:

Question 1. In whose people's legends does Brent Cook appear?

(A) the Ulch people of the Russian far east
(B) the Dja Dja Wurrung people of southeastern Australia
(C) the Mbanderu people of Namibia
(D) the Soda Springs people of Idaho

Question 2. For what is Brent Cook legendary?

(A) successfully protecting a village from an army of wolves possessed by evil spirits
(B) spending a thousand years walking through the outback aiding lost children
(C) composing spiritual music for noseflute and xylophone
(D) spending a fortune on snooty foreign whiskey

Question 3. how does Brent Cook typically appear in the legends?

(A) wearing a full outfit of white caribou furs
(B) wearing a kangaroo-skin loincloth and carrying a shining gold boomerang
(C) butt nekkid, wearing blue body paint, and carrying a ten foot long spear
(D) butt nekkid and throwing up in an alley behind the strip club

Question 4. What is Brent Cook's legendary power?

(A) the ability to summon and command grizzly bears
(B) the knowledge of all stories ever told since the beginning of time
(C) full and absolute control of time, space, matter and energy
(D) the ability to spend a fortune on snooty foreign whiskey in Soda Springs and always somehow end up butt nekkid and throwing up in an alley behind the strip club

No cheating, now. I'll give you the answers tomorrow.

Noon news

Here's some reading for you:

Bespoke - the bulls left the building (yesterday). AAII sentiment dropped pretty low.

Liz Ann Sonders - pullback (as of yesterday) could become a correction. Eesh, Liz. You fell for it, eh?

Bonddad - bonddad thinks the Japan trade is over. EWJ had six failed attempts to break $12 in the past year. You could probably argue that this indicates too much money was chasing Japan all last year, pushing their market too far above what's justified giving the boots-on-the-ground data.

Reformed Borker (Bork Bork Bork!) - fatty thinks the Japan trade isn't over. He looks at the entire 1989-2013 trend to arrive at his opinion. Now that's charting, bitch!

Reuters - BOJ's Iwata thinks Japan can withstand tax hike pain. This probably inspires selling by the market til there's data showing the tax hike didn't destroy their economic revival. In other news, former Cub bassist and I Am Spoonbender member Robynn Iwata now heads the Bank of Japan.

Yahoo Finacne - Netco Silver drops to single-A ball, renames themselves Brisio Innovations or something. Apparently their new business is smartphone apps or something. Who was the guy who was calling this stock a buy last year?

Mineweb - new technology will revolutionize gold mining sector. Uh-oh. I don't know anything about this, but if this makes waste mineable, there's your ten year bear market in gold right there. 170MPa concrete is half the strength of steel, so assuming you can place it properly, this does indeed turn pillars into ore. Quote from another article:
SA’s mines are enormously labour intensive and half of mines’ costs are wages. This technology will take some years to develop and the costs have to make financial sense — something Mr Newberry declines to be drawn on as the work is still in the testing phase. Mining companies are notoriously averse to rushing into new technology, so it will take years to phase it in.

"If we don’t find a new mining method there will be no jobs in 30 years from now. This process creates jobs. You can’t just switch off the labour-intensive drill-and-blast type mining we do now," Mr Newberry says.

"We will be able to open ore bodies that we are not mining because they’re not viable. It will create a technical and financial model to convert more resources into reserves which means more mining over a longer period of time," he says.
Mazel tov to Anglogold Ashanti for apparently inventing this. And as for you goldbugs: you better fucking pray that this new technology doesn't work, because the last time miners invented something useful (leach pads) you had a ten-year bear market in gold.

Krebs on Security - Adobe pushes update for Flash player zero-day attack. Update your Flash.

Bad jobs report means market goes up

Ritholtz already pointed out this morning that the BLS is generally a worthless piece of data, at least when taken in isolation. And I'm sure people have spun the numbers this way and that in the media so far this morning.

But the chart is the chart, and all this blather in the media is meant to do nothing but explain why the chart is doing what it's doing. So let's ignore the media for a sec and just look at the chart:

At the very least, the SPY is moving back to the top of a downward channel. anything better than 1786 by the end of today is bullish. Even better, if this situation holds, the weekly chart will show a fakeout at the weekly supporting EMA, which invalidates this entire week's selling.

Oh look, the MACD is crossing up too. TAs seem to think that means something.

And here's the Nasdaq 100:

It's already opened above its short-term EMA, and the weekly chart fakeout candle thing still applies.

Meanwhile the $VIX is at this second down to 15.80, which is at the Bollinger mean and below its own EMA(16), so it looks like buying downside protection is so yesterday.

So it doesn't matter what the BLS said. What matters is that people are buying the market back up.

We'll see if it holds. But while it's fresh in your mind, perhaps you should go right now and make a list of the people who've spent this entire week warning you that a 20% correction is imminent and 2014 will be a wash and you should get out of the market. Because quite plainly, the chart is the chart, and the chart is starting to suggest they were all wrong, no?

Friday videos: if you wanna get with me, there's some things you gotta know.

Dev says that associating with her requires your understanding of the following: she prefers her percussion speedy, and the low end frequencies excessive.

She would also like to know why your spouse is attempting to place his hand coverings in her stove. Or something.

Thursday, February 6, 2014

no posting

I was in training all day so there was no posting.

I'll give you some news to read tonight, probably.

I'm also going to be unavailable on Monday thru Wednesday next week in the daytime, so get used to it.'

Wednesday, February 5, 2014

Daniela Daniela Daniela! and Jeffrey Christian

We haven't seen much of Daniela Cambone around here recently, so here she is interviewing Jeff Christian, who seems like a rather sensible person and not the type to talk to goldbugs:

Comments on two Bonddad posts

New Deal Democrat - the oil choke collar is gone. Gas prices used to choke off the US economy whenever it tried to pick up. Now? Not anymore.

By the way, that sounds vaguely like a Jim Rogers bear/bull cycle datapoint. In a DM bull, commodity prices don't manage to choke off growth, and DM economies manage to produce goods for cheaper because they don't have to deal with inflation in raw materials prices.

How would that happen? Well, you can kill off some commodity demand in EMs by making the prices of commodities skyrocket in the local EM currencies - which is what happens when EM currencies collapse. Kill off some demand and the price (in USD) goes down.

Reducing the change in demand y-o-y by reducing EM GDP growth to slower than commodity supply growth would reduce prices too.

And maybe in some cases the EMs continue to produce commodities, or even try to increase production because it means more and more dollars that they can bring in to their economies. So that'll boost supply. Heck, some countries will probably begin to subsidize commodity production, since it's (or at least seems to me to be) an easy way to attack a current account deficit.

It all seems to support my secular DM bull/EM bear thesis.

And for story #2,

Bonddad - emerging markets all have inflation in common. That especially sucks for them, cos the easy way to fight inflation is to jack up interest rates: but in a rising-US-rates world, that just strangles their economies by choking off credit.

Again, that makes the case for a secular EM bear.

Note btw that I don't consider China an "emerging market", as far as thinking about their place in these scenarios. I think they're more like 1990s Korea, frankly, and I think Korea left the EM world decades ago.

The EM/DM semantic construct is too arbitrary and not responsive enough to differences in the details. A heuristic is not reality.

Now here is an interesting junior miner chart

Take a look at this:

I know nothing whatsoever about them. With that in mind, I find it interesting that this stock is at its high from 2 years ago, instead of down 90% like a proper junior would be.

Also, I wonder what the fuck kind of target you would put on a breakout of $2.80? On a linear chart, I guess the target would be $4.60. But I thought you're supposed to do targets logarithmically, and in that case this would go to $10.

I have no clue and am not recommending this stock. It's just nice to see one junior that is looking up.

B2Clive breaks out?

Brodrick pointed out recently that gold isn't doing what it's supposed to. Maybe that's now filtering thru to the miners?

Here's B2's chart in the US:

I guess that thingy in the end of January was a pennant, and now it's broken out to the upside?

Here's the Canadian chart, where you can see the volume better:

Well, it wasn't much volume breaking it out.

I guess by the Canaddian chart, this thing targets $3.40? I dunno. Bot some this morning with money I took out of the US market, where that little post yesterday about a broken H&S formation convinced me to go to the sidelines for a while.

We'll see how this goes.

Tuesday, February 4, 2014

some evening news

Bespoke - market is extremely oversold. 3-sigma down is just silly.

Bonddad - yes it's a correction, quit freaking out. He considers it a reactionary sell-off after December's window-dressing.

Bespoke - don't blame earnings. Stocks have on average gone up on earnings reports this month, despite the whole month being down. So the market is not concerned about earnings.

And Michael Shaoul's not concerned about the January ISM, because inventories went down. So either you can believe him, or believe some dumbass with a blog somewhere.

Probably no more posting today

I just had a scintillating scotoma over lunch, which made it impossible to read and stuff.

So either I'm about to get a migraine, or die of a stroke. Therefore no more posting from me til at least this evening. There's not much news worth reading anyway, you know everything that's going on.


Can't believe how frickin' busy I am at work.

Anyway, here's a thing I thought of last night:

Nice of you to come back from the brink, Alex, but your stock's chart has done nothing for a couple weeks now. It's not broken yet but it still isn't inspirational.

Then again, maybe Rio Alto's price has only hit a wall because Peru is down 10% (it being an emerging market and all) and Rio Alto is listed on the BVL.

OK, it outperformed Peru since mid-December, and now for the past couple weeks it's just been doing whatever Peru is doing.

I'm not worried anymore.

Monday, February 3, 2014

Some evening news

Here's some reading:

Bespoke - ISM ruins the week already. I suspect it's a big outlier on bad data, and by March the US will look fine again. Til then, though, the market has been given a good reason to sell some more.

Calculated Risk - Goldman and Merrill agree with me that the weather's fucked all the data.

BI - Citi economic surprise index tanks. So people are selling stuff.

Bespoke - Vix at upper end of range. So either it goes higher, or it turns back down. Personally, I think it has to go higher, if only because I think the market really wants to complete that head and shoulders pattern it's drawing right now.

Ritholtz - the January barometer is bullshit. A lot of stuff in this article about fallacies in thinking. For example:
What we want to know is whether there is a rational explanation that could explain the causality. Is there some ongoing and repeatable force that is resulting in the correlation that we see? Alternatively, is it merely a coincidence, like having good trading days when you wear lucky socks?

This is where we run into some trouble with the January Barometer: No one has identified a reason why a negative first month of the year would be so significant to returns. Does it follow a change in investor attitudes, or perhaps a shift in risk appetite, or maybe new legislation for taxes that takes place on Jan. 1? Without some rational explanatory basis, we cannot conclude this is anything other than coincidence -- a mere correlation without any underlying reason. Like other such random past events, the correlation could simply fade over time.
In 2010, markets fell about 3.7 percent in January, but the S&P 500 had a full-year gain of 14.8 percent. If you followed the January Barometer that year and avoided U.S. equities, you left money on the table. However, you would have missed even more the prior year. In 2009, the S&P 500 fell about 6.3 percent in January and gained almost 26 percent, not including dividends, for the full year.

We also see false positives the other way -- when a positive January leads to a negative year.
But this is his most devastating point against the January barometer:
There are no guarantees that the median of all prior years will be the most likely outcome.

Reformed Borker (Bork Bork Bork!) - professors to EM countries - harden the fuck up! Seems the link is broken right now but it worked earlier today.

Chronicles of Brodrick - why isn't gold collapsing? Cuz China's on holiday, so why shouldn't gold go down? I mean, gold is a useless metal, right?

BI - bitcoin meetups are full of molesters and Neanderthals. Some chick goes to a bitcoin meetup and gets groped, then gets a lecture on why women are too stupid to understand bitcoin. Quote:
Entirely uninvited, and before I even have a chance to react, one guy proceeds to grab me by the waist and pull me into an awkward, grope-y side hug next to him on the bench. To reiterate, I’ve never met this man in my life. I try giving him the benefit of the doubt and make some quip about his being a friendly sort, but it gets uncomfortable pretty quickly when he puts his hand on my leg and leaves it there until I squirm uncomfortably.
 Later on,
Undeterred, I try to sidestep it and go on with my argument, concluding that what I am describing is “much more effective and efficient” than the current system. “Well,” he says looking at me knowingly, “Women don’t usually think in terms of efficiency and effectiveness”.
She should go to a goldbug conference.

Anyone in the Lamestream Media talking about the H&S in the SPY yet?

Here's a bad chart:

It's a proper H&S top because there's more volume on the right-hand side, and as a result the right shoulder is misshapen and steep.

So I guess the target is $169? I guess that would wipe out all the bullishness that the whiners have been complaining about since October, so a drop to $169 makes sense. Plus that makes for a near 10% correction, which is what all the Lamestream Media clowns have been clamoring for, so now they'll get what they want.

And it'll reduce the P/E ratios to a level that will go some way towards addressing the misinformed complaints of the CAPE-worshippers.

So, if the market is a self-fulfilling feedback mechanism, we should probably hit $169, and heck maybe if they're in enough of a hurry we can get there by Friday.

Ford chart looks simply hideous

Here's Ford's weekly candles:

Really looks like it's rolling over big-time. I have no idea why it should be going down, I'm totally ignorant about auto stocks, but maybe it's over fear that China's consumer spending will collapse or something? Or maybe people are scared the US economy will collapse and businesses won't be buying any F-150s?

Again, I'm ignorant, but Google Finance says its P/E is 10.3 right now. Stock price shouldn't be going down then, should it?

Oh well. I guess the present downtrend means that at some point in the future it'll be a screaming buy with loads of upside, right?