Saturday, May 18, 2013

An interesting thing about the S&P P/E chart

I earlier reposted the Bespoke long-term S&P P/E chart. Here it is again:

It's kinda hard to tell, but it looks like the trailing 12-month P/E bottomed around August to October 2011 or so.

Would you agree with that? Sound about right to you?

OK, now check out these two charts:

Sometime around August to October 2011 was the bottom in the S&P's trailing 12-month P/E.

Since then SPY has gone up 50%.

Now look at $HUI:

Peaked in September 2011, now down 60% over the same period.

Now gold:

Peaked in August to September 2011, now gold is down over 30%.

Interesting, eh?

When did gold bottom, by the way? Around 2000? That was the S&P's bubble peak of 30 P/E.

Interesting, eh?

Basic Jim Rogers theory:
  • A secular S&P bull will be coincident with a commodity & EM bear.
  • A secular S&P bear will be coincident with a commodity & EM bull.
Even more basic shit:
  • A secular S&P bull sees rising P/E. 
Given all this, did the turn in P/E trend in September 2011 signify the beginning of a S&P bull market? In that case, gold (and commodities) is dead, since EMs are going into bear. And in that case, these two charts matching up should be no surprise at all.

Some weekend reading

Calculated Risk - preliminary May consumer sentiment is awesome. Quit listening to clowns who say the US is doooomed. They've been saying that since S&P 666.

Bespoke - S&P P/E ratio. Yes, in one year it's gone up from 14 to 16. But here's the long-term chart:

In a secular bear market the P/E trend is down. Good, we see that in the chart. But in a secular bull the P/E trend is up: In Jan 1998 it was 23, for example, and the US stock market was still very sensible and not at all bubbly in Jan 1998 (go look up some late-90s bubble stocks' charts if you don't believe me). So while a fundamental basis for a stock market advance requires that earnings to go up (and commodity input deflation will help there), the multiple still has far to go as well.

Ritholtz - give the market the benefit of the doubt. As he says,
one major reason stocks will continue to advance is the fact that there is an “enormous amount of professionals who are under-invested.” They will be “forced into the market” if they want to keep their jobs[.]
Idiot goldbug bloggers have no such luxury. They can stay being wrong forever, all they lose is their wife and kids and house... and self-respect... and eventually, sanity and hygeine.

Reformed Borker (Bork Bork Bork!) - In which Josh Brown destroys the clowns who took issue with him destroying the 1999 comparison. Great quote from him here, emphasis mine:
Most of the negativity has clearly come from those who've gotten the market wrong for years now and they are misinterpreting my post as though it's some kind of "buy" call. I understand the emotion, it's got to be tough to have such a rigidly negative outlook and to watch stocks day after day invalidate your core beliefs.
Now please read those underlined phrases again.

Does that sound like anyone you know? If so, here's the last time* I give this advice: Quit reading them.

* - no, it's probably not the last time. I care too much.

FT Alphaville - Shinzo Abe is like Superman or something. They note, though, that Japanese GDP figures tend to flop all over the place; this might mean that we'll see data in the next month or two that suddenly turns the market significantly less bullish on Japan. And since the Japanese market is flying up on US hedge fund inflows, it could just as easily puke 25% on hedge fund outflows when the cokeheads see one piece of nonconfirming data. So be warned.

FT Beyond Brics - emerging market consumers take a breather. I've been worrying about a TFP wall ending the EM bull; but maybe we should worry more about a credit wall? As in, when do we see the next Asian Tigers Crisis? Hey, maybe if the commodity collapse continues, it'll cause a banking crisis - like somewhere very commodity-focused, like South America.

Mineweb - Nevada to increase taxes on mines. Just in case you were thinking of throwing your money into NCU to avoid the gold & silver armageddon.

Mineweb - anti-gold campaign at play in India? Yes, obviously the government wants to decrease gold purchases, since that so strongly affects their balance of trade. However, I think the only way this could succeed is if the government magically created a banking industry that served the countryside, and also brainwashed the population into suddenly putting faith in the corrupt and incompetent plutocracy. And remember, this is a government that doesn't know how to build roads or predict monsoons: how can you expect them to alter the psychological basis of traditional Indian asset allocation? So, to me the bigger impacts on Indian gold demand will be (positive) a lot of upcoming marriages and (negative) their shitty stalling GDP.

BI - Caterpillar's CEO is a fucking cunt. And as Max Nisen says, good fucking luck finding qualified staff to work at your factory when you expect them to work for nothing. So fuck you, Doug Oberhelman, you fucking Nazi cunt.

Toronto Star - Rob Ford smokes crack. It's the fun story that's exploded across the internet, if it were true it'd certainly explain Rob Ford's behaviour, and I guarantee you the $200,000 will be raised to buy that video, whereupon anyone who still supports Ford will have to thereafter refer to him as "Fatty the Crackhead".

Most of the suburban twats who voted for him will be happy to re-elect Fatty the Crackhead in the next mayoral election, though. Because most of them smoke crack too.

Friday, May 17, 2013

Forma on ESP TV

There's apparently a cable access TV show in Manhattan called ESP TV Which is one of those shows you wish all cable access TV could be.

Here's a half hour of Forma playing live on it.

Money printing is good!

Such beautiful irony that people leave out for me to pick up.

Commenter said

Fed is printing and US economy is doing OK, BOJ has started printing and the Japanese economy is starting to recover and the ECB isn't printing (Germany won't let them) and the European economy is in the dumps.

So printing must be good.

Indeed! I replied.

Money printing is definitely good.

Unless, with the shimmering otherworldly irony of an angry god, your portfolio is made up of precious metals and shitty junior miners.

In that case, money printing means you've spent the past two years happily getting repeatedly assraped by an angry silverback gorilla with a rusty chainsaw who is out for vengeance for the death of his family.

Now, for all you bloggers out there who have been passionately telling us how horrible money-printing is:

How's about you explain how you're the ones who have spent the past two years getting assraped? Without, of course, saying that the market is wrong and you're still right - because I think the tape (and the scattered assraped remnants of your portfolio) disproves that silly little assertion.

Dafuq, Ford?

How the fuck does a stupid car manufacturer fly up like 3% a day?

I mean it's nice they didn't go bankrupt in 2008 and all, and I'm not a driver so I don't give a shit about car brand wars. Though I remember being told the Ford Econoline was unreliable and any band with smarts toured in a GM van.

Bought at the EMA retest, holding. How the fuck is it this easy? It ain't like the junior golds at all. Come join me in an up market, boys!

Four morning newsitems

Reformed Borker (Bork Bork Bork!) - no, it's not 1999. Read the entire article, but here's the money shot:
There is no mania.

Stocks are much cheaper than they were in 1999, their holders more fearful and chaste.

Stocks are not even close to being hyped up or over-loved by mom & pop.

This rally is broadly led and spread out, not driven by 900% gainers in one sector of the economy.

This is nothing like 1999 other than the fact that stocks are going up. This doesn't mean that they can't go down, it simply means that being in the market now isn't crazy or stupid or reckless. Being out of market, on the other hand, with a retirement somewhere far out on the horizon, is the height of recklessness, the opposite of conservative.

BI - new data out of Japan is just awesome. Machinery orders blowing away the estimates. Japan has returned, boys, and it's going to be 1999 all over again! Erm - in a good way!

Bloomberg - Credit Suisse calls for $100 gold by the end of the year. Sorry, not $100, actually $1100. In any case, Deverell is a clueless boychild, and you know I'm saying this cos of the hits I get from Credit Suisse on my blog every day.

Mineweb - silver prices could decline to $24 this year. So now there's a CPM Group article to link to in my reading list to the right. Other than that, $24 doesn't exactly surprise me. $17 is certainly possible. Or $10.

Friday videos - more Mazzy Star

Frickin' holy cripes Hope Sandoval ouch.

Waitin for a sign from you
Waitin for the signal to change
Have you forgotten what your love can do?
Is this the end?
Walkin through the city
Your boots are high-heeled and are shining bright
The sun is sparkling on the shaft of your knife
Flower in the morning rain, dying in my hands
Was it all in vain?

Superstar in your own private movie
I wanted just a minor part
But I'm no fool, I know you're cool
I never really wanted your heart

You're keeper of the keep
Nothin seems to bring you down
It's not that cool when I'm around
Flower in the morning rain, dyin in my hands
Was it all in vain?

Superstar in your own private movie
I wanted just a minor part
But I'm no fool, I know you're cool
I never really wanted your heart

Thursday, May 16, 2013

Forma's "Off"

Ten years after giving up on the whole progressive Tangerine Dream electronica thing it apparently becomes all the rage with the kids of today.

Fucking bastards.

Sold my NBG

Yeah, I did the dumb thing and sold my NBG at $2.07.

I don't like seeing a spike followed by a rounded top with no volume, after several days of gap-ups culminating in a 25% pop.

Though I'll happily buy back at $1.80. :-)

Heck, why not a few more bits of news

Bonddad - deflation boosts wages and sales. Thus it's the good kind of deflation. As he notes, it shows "a temporary loosening of the oil choke collar acts like an economist stimulus".

Reformed Borker (Bork Bork Bork!) - the highest percentage of new 52-week highs in three years. Boy, that'll make the market turn bearish, no? Then again, what condition was the market in three years ago? And where did the market go since then?

Mineweb - Soros sold more GLD. Please tell me there's more to gold's recent puke than this idiotic bit of news.

FT Alphaville - Man walks into a gold bar. Au. Ha ha ha ha! It is funny because you can pronounce gold's chemical symbol in a way that sounds like a man feeling pain! In all seriousness, Izzy Kamizzy explains in detail her bearish argument for gold. And I think Izzy's argument is an ignorant and incoherent pile of white-centric utter bullshit. But it pays for you to read it.

BI - Central banks bought gold in Q1. Izzy Kamizzy should ask all the world's central bankers why they still intend to allocate a portion of their central bank reserves to gold, instead of to USD or EUR or JPY or GBP. Is it because they're all fucking stupid and she's so smart? Then why is she writing for Financial Times? Seriously? Why the fuck are you writing for FT, Isabella, instead of managing the world's central banks?

Brent Cook and Peter Grandich interviewed by Our Daniela

So Our Daniela, back from her horrible medical procedure and happy for her new lease on life, is in New York interviewing various scum and villainy at the goldbug show.

I'm at work where Youtube is blocked, so I'll just post a link here to PS Dave's blog where he's got Daniela interviewing Brent Cook and Peter Grandich.

Interestingly, Grandich completely lays off the Obama-hatred, fundamentalism, and goldbug hard-money dogma through the entirety of the interview. Maybe Peter's Tea Partyist right-wing fundamentalism is finally starting to wear off?

After all, under his new clothes of ultra-conservative religious hatred still lurks the clever fox of a successful old Wall Street hack. How well has his new fundie hard-money belief system paid off for him? As he notes, he's lost a shit-ton of money. The tape doesn't lie.

At some point that trader buried deep in his subconscious will burst out of its confinement. Someday he'll realize he can't make money by being wrong and staying wrong.

As he even notes, it's not bad to be wrong - it's bad to stay wrong. Well, Peter? How long do you want to stay wrong? Til all the money runs out and you're stuck dunning pump & dumps to Tea Party mailing lists just to survive? What happens when your gated community kicks you out for failure to pay the bills? What happens when your daughter is forced to finish her university education at CUNY because you don't have the cash for a globetrotting education of the idle rich?

Aside from you, I know a couple other people who turned to religion while suffering from depression. Guess what? In both cases, they also became hateful, spiteful people who have nothing but disgust and bile for their fellow human beings. Interesting coincidence, no? Maybe the nastiness and ignorance of your interpretation of your religion, as you continually demonstrate on your blog, is actually a symptom of continued mental illness? After all, what sort of God "saves" someone by turning them into a hateful cunt?

Think about it, Peter. I had loads of respect for you back in the 90s. You had fabulous instincts. The tape didn't lie. Since then, quite obviously, as your trading balance shows, you've gone downhill. The tape still doesn't lie. So how long do you want to stay wrong?

More news

Calculated Risk - housing starts decline sharply. I hope he does have more later, because that downtick at the end of the chart is disconcerting.

Bespoke - bullish sentiment dropped for first time in 5 weeks. In the context of this particular market, that signifies little more than a breather. Then again, is this market simply being bought by hedge funds? Where's the hedge fund manager bullish % data?

Calculated Risk - Philly Fed shows contraction in May. Empire sucked too. Then again, this is manufacturing, and these surveys have continually sucked since S&P 800.

Bespoke - jobless claims rise more than expected. All in all, there's a fair bit of crappy data out this week that is disagreeing with the market's positive bias. I like when a market ignores bad news, and in such a case I tend to go with the market; but at some point we might expect a few weeks of return to pessimism, no?

der Spargel - Deutsche Bank backs ruthless murderers. But they're German so it's to be expected.

Reuters - Japan 1Q growth spurt beats forecast. Abenomics is working. Yay money-printing!

der Spargel - disunity at EU banking union talks. But it's not "disunity" - it's simply Germany going back on their word because they want to keep the rest of Europe weak.

India Reuters - southwest monsoon may arrive late. And the ducks continue to fall in line for a continued gold smackdown.

World Gold Council - gold demand trends 1Q13. If you're not reading this report every quarter, you should stay the fuck away from gold.

Morning news

More news to come later. This will get you started, though:

NY Review of Books - Krugman: how the case for austerity crumbled. Seriously, I'm posting a link again, because really it is a very very good read.

Bonddad - what US inflation? Turns out that prices in the US are going down. Ooh, scary deflation, eh? No. This is the good kind of deflation, the kind that makes your economy take off. Exactly the kind your goldbug friends warned you ab... oh, wait....

Bespoke - S&P sector trading ranges. An awful lot of stuff is +2SD and +3SD. In a way I find that frightening; in another way, I have to say "why not?" After all, if the US economy has survived all the idiocy the Republicans threw at it, plus an EU depression and now a Chinese slowdown, with commodity price inputs dropping, and the 2s-10s normalizing, with scads of cheap debt everywhere, why shouldn't the US stock market take off? Things can stay +3SD up when there's a good reason - just look at a chart of NBG.

NY Times Dealbook - Chinese government eyes reform. See also the article Bill Bishop links to:

The Age - China plans reform to head off fiscal crisis. Government is competent over there, but there are also big roadblocks to reform that must be overcome.

Bespoke - the ugly PM charts. Look at the silver chart and then look at the gold chart. Look at how the curves are the same. But look at how gold dropped off, and silver hasn't yet. I'm not predicting, I'm simply pointing out that everyone else can see what I saw, and markets are self-fulfilling. Also, gold mines are shutting down while silver mines aren't yet, even though silver is often just a co-product. Looks like silver really could hit Gary Tanashian's $17-$19 - or even lower.

Mineweb - the ugly junior mining quarterlies. Kip Keen looks at the all-in costs of a few juniors to show we're actually still at a price where most of them can make money. - Canada launches pathfinder mineral analysis research initiative. Those of you who follow NGE and John Kaiser - what do you think of this? Especially with Barrick Gold being involved? Hm?

Mineweb - who the hell invited Ron Paul to the New York Metals & Mining conference?!? Seriously. What was that clown doing there? The goldbug scene still needs more crushing, I think. - Polyus gets $1 billion investment for Natalka. The third largest gold mine in the world. In Siberia. Supported with Russian state funds. Now consider this: does the gold bull market die if China and Russia begin subsidizing gold exploration and production in the mostly-unexplored Siberia, interior China and central Asia? Maybe the Venture has been killed permanently, and all future gold exploration and production comes from subsidized Asian sources? Does Brent Cook ever mention this?

Wednesday, May 15, 2013

Xeno & Oaklander's "Staircase"

This is the kind of post-apocalyptic future I'd like to be part of.

Kitco videos

Here's Alex Letourneau talking with Peter Hug about how he saw the gold market looking weak:

And here's Daniela Daniela Daniela!, back from her gruesome medical procedure, interviewing some guy from Bloomberg or something on the past few years in the miners:

Please vote below, as to which interviewer you prefer.

I'll post the Brent Cook thing whenever I see it.

A bit more news

New York Review of Books - how the austerity case has crumbled, by Paul Krugman. He ends his article with "PS I win, suck it Nazis!"

Bespoke - gasoline inventories rise more than expected. And it's already May. You know how much of a tailwind low pump prices are for the US consumer? No? Why not?

FT Alphaville - Greek upgrade drops government bond yields 1%. Things aren't looking good, but they nevertheless are looking significantly less apocalyptic.

FT Alphaville - Yeah ride the Nikkei rocket, can't stop it, burn a hole in your pocket.

FT Alphaville - everyone's cutting their China growth forecasts. And just like that the table is set for another gold takedown.

Gold lease rate just keeps poppin'

That thar gold lease rate thingie is going up quite strongly.

I guess this means that a bunch of people are borrowing a fuckton of gold to puke into the market? Borrowing so much that they're willing to pay through the nose to do it?

Why are they doing this during Akshaya Tritiya? Don't they know a gold smackdown will offend the gods?

Maybe it's indicative of an imminent commodity bottom. Then again, EMs have to recover.

Another breakout

Got any pot?

Better get some soon! I guess if this successfully plows through $43.50, then it will have loaded a TA target of what, now? $49 maybe? I betcha the hedgies will really pile in now that they've seen resistance broken.

Unfortunately the analcyst community has its targets down here around $45 or so. So as we've seen in the past with the PMs, the minute those targets get blown through, I assume the analcysts will revise their targets upwards, which'll drive the stock higher, which'll make yet more hedgies pile in, and so on.

Which is why I think the broader market has further to go. Too many Fs and POTs and JPMs breaking out just now.

Yes it's a momo market but I'd rather buy Ford in an up market and have it go up 4% in a day, than buy some shitty junior miner at -3SD hoping for a mean-reversion rebound of 4% before the next PM puke. I'm not dropping my pants around my fucking ankles for 4%.

Thanks Obama!

I know I'm not very subtle when it comes to identifying the root of the right wing's screwed up not-even-wrong attitude towards the market.

It's this:

So here's a little dig at my fluffy American friends:

Three charts and an illustration of their similarity to vomit

Here's DPM:

I guess gold below $1400 makes DPM unprofitable? Is that the story here? I seriously do like management and how they take shitty worthless properties and make them work somehow; so I'll be happy to scrape it off the ground when it hits bottom.

Here's RIO:

Obviously I like Rio, though a cursory uneducated newbie glance at their financials worried me that the all-in cash cost they're reporting ("total production cost") means they're skating on thin ice re: gold price, while their Q2 guidance is low. So I guess those of you who love Rio and feel you don't own enough of it will be able to scrape all the cheap shares you want off the bottom landing once it's done tumbling down the stairs.

Puked by me this morning. Was only a 7% or so loss on a bookmark position. Love the mine, hate the action in silver.

And just for colour, here's Family Guy on the action in the PM scene:

Anyone buying juniors in this environment is like a guy walking on scene there and saying "you gonna eat that?"

Greece breakout

Greece chart:

That's a breakout through multiyear resistance, with significant volume, isn't it? It has a target of what, pray tell?

I hold no illusions - it's a hedgie pump. Yes Greece and the rest of Europe have probably hit bottom, yes Portugal just returned to the bond market so why can't Greece soon, but it's still too early for their markets to recover, I'd think.

But the entire market is a hedgie pump right now, and if a hedgie pump was able to take a sack of shit like ATAC and pump it to $10 three years ago, who are you to say a hedgie pump can't take the S&P to 2000 before the end of this year?

Gary Tanashian is very clear about silver

GT has a target for silver and it's low. Like, $17-$19 low. He's even clear about it.

I can't be arsed to buy HZD though, I'm too busy watching Ford up over 2% today.

In any case I've always been a bit leery of any suggestion that a commodity market can have a 3-year price memory. It's enough to say the silver chart sucks and be done with it.

National Bank of Holy Shit Look at That Chart

Stupid me, I sold 2000 at $1.50 or so, then another 200 this morning (found out I somehow had accumulated an overdraft in my account - must be something related to US settlements, I'll have to check my transactions when they bother to update them).


Apparently the nation of Greece just got a ratings upgrade from someone yesterday. Maybe that drives this higher? Will it stop at that $1.90 cluster? Then again, in early 2011 it was a $10 stock.


I bot some Santander yesterday, thinking the love should spread to all banks. My reason was that I'd sold the underperforming EWP but still wanted Spain exposure; but now that the hedgies are moving into the Mediterranean, and now that ratings upgrades are getting handed out, I feel even better about my SAN position.

Boy it's nice to not be worrying about pukes like you junior mining guys have to do all the time.

Watching this from the sidelines now

And silver pukes.

Don't worry, silver! GDXJ is right behind you!

I puked the rest of my juniors this morning in anticipation of this. Boy, that feels good!

I do still own some exploreco stock - NGE (as if that SHL hole will ever get released!) and SBL. I assume explorecos shouldn't care about short-term gold movements - especially not when they're trading for pocket lint.

I'm debating taking a HZD position to short silver, but there is still too much gardening to do today.

I keep seeing these funny chart formations

I just keep pulling tickers out of my ass and finding these imminent breakouts.

Here's JP Morgan:

Looks like it wants to break out. Again, here's one of many competitors who already has:

Rising spreads are a boon to banks, and a strong stock market is a boon to trading commissions.

This is why I can't put much faith in the charties' predictions of an imminent top; too much stuff still threatens to break out, has a fundamental reason to break out, and sees competition already broken out.

Morning news

Reformed Borker (Bork Bork Bork!) - 361 Capital weekly research briefing. Among other useful things, Blaine Rollins notes that the 2s-10s spread widening will be a godsend for the banks. Um... just like in 1995, by the way.

Speaking of which, a guy from Canaccord was on BNN this morning, and noted that 1995-1998 was another period where you had a long outperformance of US equities while the commodity complex suffered. So how do you goldbugs feel about the possibility of a three year bottom in the commodities while the S&P goes up 100%?

I'm sorry, but metal supply is rather sticky, and structural headwinds to EM growth (max TFP, politics, corruption, structural inflation) are also incredibly sticky. I want to believe, dudes, but I also don't want to be a fucktard who stupidly sticks with shitty junior miners for 3 years while the S&P flies to 2500 and beyond.

Nevertheless I await the uninformed gloating of the goldbugs the next time the US markets have a 5% correction. 

Rollins also notes the collapse in Euro corporates:

What happens when a bunch of highly indebted companies, which were trading at massive discounts because of their piles of debt, see the cost of their debt go down? Do you think their stock prices go up, or down?

Anyway, enough of that tangent on a very good article. Here's the rest of the news:

Bonddad - this week's sales report was a huge positive. It "bespeaks a real robustness in consumer confidence". Also, gasoline is cheap. - hedgies go bullish EZ. I don't understand how this story made it to, but I feel a lot better with my Eurozone ETFs now that I know I'm in before the hedgies.

der Spargel - anti-Euro party a headache for Merkel. It'll be nice if they can steal some of the right-wing vote: Europe needs Merkel out of power. I can see why she's not even mentioning them - to attack their platform (Germany leaving the ECU and reinstating the Deutschmark) would mean to explain precisely why Germany needs the ECU more than the ECU needs Germany (to keep Germany on an artificially devalued currency). Frankly, Germany should become more like Europe, not the other way around, and eventually the mind-virus will take hold. Slowly, the Germans are lurching toward being sensible.

Bonddad - Abenomics is paying off. And for those of you concerned about a yen disaster:

Yen is simply back to where it was in 2008 before the chickenshits all flooded in. So it's simply corrected out the past 4 years of childishness. And don't forget, Japan will get back to being one of the shining lights of the world economy if it can simply get back to growth.

Tuesday, May 14, 2013

Celluloide's "Imprévisible"

Pretty standard French electro-pop, but why not put the video up anyway.

Gold and silver, impending doom, happy Akshaya Tritiya

Look at the MACD about to cross over, the RSI trending back down, the price riding the Bollinger mean downward, the dwindling volume. And despair.

Look at the threat to the $22 support level, the downtrending RSI, the dwindling volume. And despair.

Hey, I like PMs long-term as much as the next gun-wielding survivalist wacko, but these still aren't the kind of charts I'd buy.

More on Ford

Remember Ford's cup?

(BTW, has your favourite TA analyst pointed this stock out to you, saying something like a completed cup targets $16 or some such thing?)

Anyway, I decided to check out their competitors. Here's a GM chart cos I'm too much of a tard to find any other car stocks.

GM already broke out of their cup and is re-testing support. Its MACD looks worse but its chart looks better. So I guess a breakout by Ford is more likely to be a foregone conclusion, when the chart for GM has already succeeded?

Anyway, I feel safer owning F than I do owning shitty junior miners. Too bad, though, that to take this position I had to trim my NBG back down to $5K. Well, I guess taking profits is good as long as I don't end participation in a winner, eh?

Minera IRL sees volume on release of financials

Minera IRL put out their financials today and now all of a sudden there's volume in the stock.

Oh wait, you wanted the other kind of volume? The kind where the price goes up?

Disclosure: vomited at around 65-70 cents, took a loss, but it turns out I avoided a bigger one.

UPDATED: A few breakout cup charts

Check this out....

Ford seems to be asserting the possibility of a breakout after a good consolidation. I guess if the story of today is that China is moving to a consumer-based economy, while the commodity complex (thus cost inputs for autos) will fall, then a Ford breakout would make sense, no? I don't own any yet but it's on my watchlist and I've made space in my cash pile.

Potash Corp tried and failed for a breakout. I have a bit of patience though... if the broader market keeps going up, then that should pull up POT, no? We'll see. $42.50-$42.00 is a sensible tight stop, I think. But apparently the hedge funds are accumulating, and the price targets are all right up around here, so a hungry hedgie push will cause some re-ratings which will cause POT to move up, no? And the world needs fertilizer, no?

In any case, POT's quadrupled its dividend in this price band over the last few years. So they must be doing well. I bought a little bit a few days ago.

And here's a cool chart....

I guess they got a pop from the story that you can now print a very shitty, unsafe, one-shot gun using 3D printer technology. Plus maybe the idea of sending a 3D printer to Mars. I'd be interested in seeing if this breakout holds and we get a hype pop.

If it's against your religion to momo a hype play, then your god also must have been offended by those people who bought Dell at 25 cents and sell at $40 in the 1990s. In which case I don't want to be part of your stupid religion.

I just bought 100 at just under $50. It looked like a runaway gap, strong volume has pushed it up to its resistance, and I just figured 3D printing was cool now or something. Let's see how disastrous it turns out, shall we? As opposed to, say, buying some beat up junior miner? Cos that seems to be working out well right now, eh?

UPDATE: Yeah, so I chickened out, sold my DDD (at a profit) for smokes money, and threw that cash into Ford instead. I want to own more sedate stocks that don't force me to check the market every five minutes. God forbid I lose $1000 while mowing the lawn.

Monday, May 13, 2013

The Lost Rivers' "Death Drive"

First The KVB, now this.

Seems one hell of a lot of kids with bands out there really like Skywave.

Evening news

Behavioural Macro - there is zero correlation between Fed printing and money supply: deal with it. Posted for certain bloggers and newsletter writers who have spent the past several years blathering about "money printing" and "money supply" as if they had any clue what they're talking about. You don't have any clue what you're talking about and it'd be better for your portfolio performance if you simply came clean about it.

Bloomberg TV - Michael Shaoul doesn't think there's much point to being invested in bonds anymore. He feels there are much better returns elsewhere. Quote: "if Bill Gross is correct, and bonds just stay where they are for the next six months, you're going to be paid 80bp in your 10-year treasury. If you sell it, that's what you're going to be giving up - and I just don't think there's a problem there! To me, that's an extremely easy decision." He'd rather put his money in the market, but he says even if you're a doomer, you're better off in cash because you avoid the interest rate risk.

Reuters - India gold buying spree takes shine off inflation. The Indian trade deficit went up in April. Not down. Now remember all those idiot major newswire reporters who told you the gold price collapse would be good for the Indian trade balance? OK, please post their names in the comments so we can have them fired for gross stupidity.

Zerohedge - gross gold shorts at all-time highs. So is this a bottom and do they get burned? Or is there one final takedown? And as for this chart:

I'll tell you what that divergence means, Zerohedge. It means that all the white people's trading gold has disappeared into Indian dowries. So the poor white people have no more gold to trade.

In the long run, I expect this to make the gold market interesting. We just want to get through the next several months with our skin intact.

gold and silver miners, junior and senior, collectively suck™

Let's look at some charts.

In each case, the miner index has been given something like 3 weeks to pop above the EMA(15) and the Bollinger mean, which are both descending. In no case have they even managed to do this. No upmove whatsoever.

That makes the post-puke action little more than a dead Republican bounce (be nice to kitties please, if you have to push something out a high window please make it a Republican).

It also makes me think we can get yet a further gold & silver puke, maybe on another gold short dump, as I suggested when I pointed you this morning toward the uptick in lease rates. It certainly wouldn't surprise me if I was told there's a big pile of stops at... what, $1400? $1350?

What stop loss point would make sense to you if you were some Wall Street gold trader? They certainly aren't more intelligent than you, so whatever you're thinking, they're probably thinking too. And so those stops could get run, Indian and Chinese physical gold buying won't matter, and have a happy Akshaya Tritiya 20% off gold sale.

It sure will be nice when GLD's vault is empty, its former contents joining the West's former central bank gold holdings in being melted down and turned into nice shiny bangles that Nalini and Parvinder will never part with. Let's see you puke gold then, bitches!

Til then, I'll just remind myself the following examples of the continuity of the real number line:
  •  gold will never get to $2000 until it can first reach $1550.
  • GDXJ will never get to $40 til it first gets to $15.
  • and neither of those can really happen til both can get above a rising EMA(15), much less a descending one for god's sake.
  • we'll also need both to eventually get above their SMA(50)s, but thats far enough away in the future that there's no point blathering about that right now.
Basically, if Dominic Frisby were here, he'd not be owning junior miners right now. And it seems such a sensible strategy now, doesn't it, his whole thing about not owning shit that's plummeting.

Morning news

Reformed Borker (Bork Bork Bork!) - The end is where we start from. His opinion on the Hilsenrath end of QE story, with notes on how stupidly the market will over play the whole thing. And if you want data on what really happens to the US after the end of deep-recession-driven hard QE, look at a S&P chart of 1994-1995. A year of long sideways churn with banks strongly outperforming, then foom! a 50% pop in the market.

Reformed Borker (Bork Bork Bork!) - bearish pundits complaining that too many people listened to them. If that idiot Rosenberg kept you out of the markets for the past 5 years of profits, maybe you should just ignore the twit from now on. Same for anyone else who's e.g. tried to keep you in junior miners for the past two years of massive S&P outperformance. Whatever their precious little theory is, it must have been wrong.

BI - Abenomics is not about boosting exports. It's apparently about boosting domestic demand... somehow. I don't get it but as long as it's good for Japan, the third largest economy in the world, then it's good for world growth. And I do agree that a success in Japan - Germany's natural economic rival - may eventually be good for European policy too. - scary outlook for iron ore. Massive oversupply is around the corner, driven by large ultra-low-cost operations. This will be great for capital expenditures (cheap iron mixed with China's oversupply of steel will be good for countries everywhere), and maybe bad for the commodity complex. Where's your precious commodity inflation now?

Zerohedge - Sprott on Chinese import data. All the upside in imports was actually gold buying. Which is maybe good for gold but bad for Chinese growth. Sprott bases his argument on actual data and not political idiocy, which shows that he must see the writing on the wall and realize he needs an intelligent argument for PMs, not a political one.

FT beyond brics - Chinese recovery is painfully slow. They've also clued in that the Chinese retail sales pop was entirely driven by gold.

Mineweb - India april trade deficit leaps on gold imports. Again with the EMs story I've been screaming from the roooftops for years now. The scary part, though, is where they say the wedding season sales weakness suggests the gold demand in India has been exhausted with the recent buying spree. Or maybe it was just brought forward by the deadly deals the hedge fund pukers gave them.

Bloomberg - Investors pulled $20 billion from gold ETFs this year. Meanwhile India imported 100 tons in April, around $3 billion if my math is right; Chinese imports for the 12 months ending March 2013 were $30 billion higher than the previous year; and both of these are physical gold, which is a lot more sticky than ETF gold - essentially it's now been taken off the market, for many years if not forever. Can any of you hedge fund idiots understand the simple math outlined here?!?!

Kitco - check out the gold lease rates chart. All rates are now positive. Some guy with a blog somewhere said that rising lease rates are an indication of the taking of large shrt positions - I guess you lease some gold, puke it, then wait for the market to collapse so you can buy it back cheaper. In that case, that pop in the short-term rates over the past week might presage another short attack on gold?

Or maybe that long-term trend rise indicates that there's now a shortage of gold to sell short?
I have no idea. But y'all should maybe think about whether or not you want to live through another short-term puke in gold sometime in the next week.

All I know is I no longer own $5000 in NBG; I now own about $7500. Man I love it when a plan comes together. For once.

Antlers Mulm's "End of Worlds"

Bendy synths like old OMD.