Friday, December 30, 2011

friday video - depeche mode

For all you suckers who've piled back into silver, into the gold miners, and so on, thinking we've hit a bottom, thinking things will look better now, here's an inspirational video:

"I'm taking a ride with my best friend; I hope he never lets me down again....."

And, of course:

"We're flying high, watching the world pass us by; never want to come down, never want to put my feet back down on the ground...."

Just remember who's wearing the trousers!

market comment

Friday means nothing. Nevertheless, SIL and GDXJ have both broken above their EMA(8)s.

I haven't seen anything in the charts of the past few months that says these two have done a false breakout from an apparent bottom recently. So maybe this is the end of the downward trend?

BTW, I read yesterday or the day before that GDXJ actually pays a 5% dividend. Wonder which components are contributing to that?

Anyway... today I'm watching SLV with mild interest... we'll see if it breaks above $27.42.

Oh, also... GUY and MAG have surged up pretty strongly, albeit on nonexistent volume. I wouldn't buy MAG just cos it shot up 5% on 16,000 shares. Still, it looks good. FVI, AR, BTO and PVG have all popped above their EMA(8)s. So the strong ones are advancing. Might be time to accumulate... but I'll wait til the $HUI tells me so, before adding anything back.

Wednesday, December 28, 2011

my new investing system

I said something a few days ago about wanting to develop a new investing system.

Well, in between playing Civ4, doing chores around the house that have been waiting for months, and generally wasting my time, I've come up with the following:

Don't buy shit that's going the fuck down.

A simple definition of "going the fuck down" is when something is below its EMA(8), and making a series of lower highs and lower lows.

To wit:

$HUI has failed the EMA(8) and sunk, and that means it's (still) going down. (The failed MACD and the RSI(8) turning back to 30 are both simple functions of the $HUI being below its EMA(8).) Oh look! it's also printed some lower highs and lower lows!

So don't buy the senior gold miners right now.

GLD:SLV is Gary T's fave liquidity indicator. It's broken upward into a new range, and that is bad for miners, as (until proven otherwise) they go down whenever GSR shoots up. So don't buy frickin' miners right now. Especially not the silver ones.

GDXJ is notable for (logically) having a lot of silver miners in it. Again, it failed at the EMA(8) and turned back down. It has a lower high, and is marginally printing a lower low as of today. So don't buy the junior golds right now.

UUP still prints a higher low. Its RSI(8) might go to 80 again, which will mean also a higher high. That's bad for miners, apparently. Don't buy miners when UUP is trending upwards.

$VIX has finally popped back up above its EMA(8). MACD is crossing up, which of course is just a function of EMA. That means fear is increasing. So don't buy miners.

GLD just printed a lower low. It also failed at EMA(8) and is going down. Gold miners seem to mine this stuff. So don't buy gold miners.

Now, you can criticize the simplicity of this. Hey, maybe you want to point out stocks like AR, RIO or LCC, which are maintaining their price in the face of these strong headwinds. That still doesn't give me any reason to buy them right now. If I am going to hold dead money, I'd rather it be the old-fashioned cash kind.

I'm happy to receive your comments on this fantastic innovative strategy of mine... which involves not buying shit that's going the fuck down. Basically, if there's a governing EMA, I'm going to obey it. I'm not buying shit til the EMA gets crossed, not selling til it gets crossed either. I'd be happy to start looking at particular stocks when the environment changes... but for now, I'm not buying shit that's going the fuck down.

I'm sorry, I have to repeat myself so that it sinks thru my thick skull.

Saturday, December 24, 2011

Residents - Eskimo DVD

The most challenging and difficult Residents album was "Eskimo" - maybe because it was meant to be a series of stories told entirely in music form?

Maybe that's why they seem to have released a video DVD, titled "Eskimo - the Movie". It's made up only of illustrations, but at least it explains the meaning of each song as you're listening.

Anyway... here's "A Spirit Steals a Child", from the Eskimo DVD. It's brilliant, watch it.

Xmas playlist

No actual videos were ever made of these tracks, as far as I know. So you're stuck with stills and music.

And two separate versions of Santa Dog, by Residents: first the "Fire" single, then "Santa Dog 78".

Aw heck, we'll also include "Santa Dog for Gamelan Orchestra", just so you can see how versatile Residents really were.

Friday, December 23, 2011

Grandich and the 200DMA

I know certain readers don't appreciate Grandich at all.

But he recently posted a little commentary on the recent catastrophic loss of the 200DMA by gold that I thought was worthy of linking to... only because I've been saying the same fucking thing.

If you don't want to follow the link, this chart copied from his blog says it all:

Basically, don't go freaking out over an arbitrary number. The 200DMA is an arbitrary number. This chart proves it. The 200DMA has never been critical support.

The 50 week SMA has been support, at least for the past 3 years (it was pierced in 2009 during the market crash); We're still above the 50-week SMA.

And that's why I'm not concerned about gold. Not just yet anyway. Plus, whatever else Grandich has been up to, pumping his buddy's companies and all, he still does make the odd very good market call. And he's not bearish on gold at all.

The problem with Euro commentary....

The problem with Euro commentary is that a lot of people are flapping their mouths, but they know utterly fuck all about Europe, or even economics.

This dumb bitch was posted on ZeroHedge.

She works for Roubini, she seems to have gotten a Economics degree or maybe even an MBA, she can't start a sentence without some inanity like "I mean...", and she makes pat pronouncements without the slightest fucking clue about reality

To wit: no, Greece isn't leaving the Eurozone. It can't happen. It would explode all other sovereign bonds (everyone would be betting on who's next), it would instantly bankrupt all Greek businesses (whose contracts are in Euros), it would cause a Eurowide run on the banks (as all citizens would GTFO, fearing the instant vaporization of their savings in a currency devaluation).

It's not going to fucking happen. Yes it should happen. But no it won't happen.

There are other problems with Euro commentary... one is that some sources are Euroskeptics to begin with. Case in point, The London Telegraph, whose commentary generally runs along the lines of "and did those feet, in ancient times...". Racist bullshit.

But on the other hand, you can read David Kotok over at Ritholtz's blog. He actually went over to Europe and talked to central bankers and stuff. And he knows what's actually going on.

And here's a quote from him:

"Another important take-away from this trip is the response of Europeans to what they see and read in the American media when the eurozone is discussed. Europeans universally feel they are not understood, that their problems are not correctly identified, and that there is much hyperbole coming from the American media. Having examined this issue from both sides of the Atlantic, I believe the Europeans are right. My own experience in gauging television and mass media in public debate over the issues is that Americans do not understand the payment mechanisms in Europe. They do not take the time to do the research. Instead they jump to conclusions and make dramatic assertions. In fact, they do not delve into the details, where the devil dwells – and where the answers may be revealed."

He's a very boring read. So he must be right. So go read him.

Friday videos, and a plug for Soma FM's Xmas music stream

I'm off work for a whole week! Yay!

Here's a Berlin band that I really like, Quarks. Hard to find any videos of them. They also started to suck after they were picked up by Sony. But their older music is very honest and lifelike, I just love them:

Which reminds me of Ulrich Schnauss, who's also German (from Kiel). Again, first 2 albums were sheer brilliance. This track seems to be from something released more reecently. The shoegazers love him, though he's not really shoegaze (too many keyboards).

Someone posted a comment on YouTube that Ulrich Schnauss used to be "in Boards of Canada before they hit it big", which seems kinda funny cos BoC is Scottish. Anyway, I've probably posted BoC's "Disengage" before, but here it is again (audio only with a still for the video) - brilliant frickin' session, better than any of their studio work by far.

And by the way, If you're looking for a streaming site for Christmas music, I highly recommend SomaFM's "Xmas in Frisko" feed. Lots of funny music interspersed with serious music and crappy pop music. Go check them out!

Euro speculation

Problem with the Euro mess is that it's so hard to keep everything straight. There is one heck of a lot of variables to keep watching.

I work in engineering, and so I often get a job dumped in my lap that is really really huge. As in, I can still get it done, but it is going to take about five thousand steps to get done - and I have to know which one thing to do first before I start on step two. So I'm used to gigantic problematic disorganized clusterfucks that take ages just to puzzle out.

So I was thinking last night about the Euro mess, and whether it's done or not. Let's see what I got:

OK. Number one most important point, ignore ZeroHedge. They want the world to disassemble into a post-apocalyptic Mad Max future. Only god knows why; because in the Mad Max movies, stock traders and libertarians were the ones getting raped to death by the mouth-breathing proletarian gangs in hockey gear and spiky hair. But point being, ignore ZeroHedge.

Now. What are all the problems? - Greek default, Spanish and Italian (and Portuguese as if anyone cared) bond yields, French bond yields, periphery CDSes, Euro bank balance sheets, Euro bank counterparty risk, Euro bank CDSes and bond yields, tapping of official liquidity, the money market... and on top of that, austerity-driven GDP contraction, ratings downgrades, political brinksmanship, ideological rejection of the simple money-printing solution, lack of a fiscal union, blah blah.

That's a lot of stuff to watch. You see all those things piled together, and you think "gee, this thing is definitely going to collapse like a house of cards". So you short the market waiting for your Lehman moment, where all liquidity disappears "in a derivative whirlpool", and over time you get annoyed cos it just never comes.

But what exactly is going to cause the Lehman moment?

We don't care that Greece defaults. The bankers have known this forever. It won't kill balance sheets. Ditto Spain and Portugal. Greece has been a basket case since the Ottoman occupation, while Spain and Portugal have had a dismal economic situation since the... I dunno, 18th century maybe? We don't care. So we should also not care that Spain, Portugal and Greece are going to suffer severe economic contractions if the problem gets "solved". We don't care because they suck to begin with. Ignore Spain, Portugal and Greece.

Italy. Yes, people really freaked out when Italian yields spiked. Scary. That really can destroy the Euro banking system, cos Italy is a major debt issuer. But is Italy the big concern? I personally really think that Monti will find it easy to stop issuing new debt; all he has to do is pass the tax reforms that his criminal predecessor refused to pass. Italy has a primary surplus, but like all major Euro economies I'm betting there's a lot there to be cut; they all have stupid farm subsidies, they can all institute means testing for benefits, blah blah. I'm ignorant about Italy's situation right now, but I feel pretty certain Monti can present positive surprises to the market. So don't ignore Italy, but quit freaking out cos it'll probably work itself out.

Liquidity concerns? Part of the problem has been banks deleveraging as part of the Basel requirements for next year. That's been a positive feedback, making things worse. Other than that? The Euro bosses have now begun sterilizing debt by allowing banks to trade it in for new 3-year "AAA with an asterisk" money at 1%. The banks then take that to re-leverage. I've read a lot of very boring pundits (e.g. Financial Post bloggers) who've asserted quite strongly that this counts as "back door QE", and who have been very happy at the initial take-up. Certainly Spain's short-term yield has caved in tremendously, we've seen that. And it seems that the Eurocrats have identified this as their central concern, and are all too happy to take whatever steps they have to. So liquidity seems to be slowly working itself out, and someone important is paying attention.

France and Germany downgrades? Pft. If US debt can take a downgrade, so can these two. Ignore the threat of Eurozone core downgrades.

A few banks go tits-up? Yes, possibly a big concern. But Dexia didn't cave the market, Jefferies sorted themselves out, and now the Eurocrats are taking steps (e.g. the liquidity programme) that will correct a lot of balance sheets. And yet there still is counterparty risk. But I think everyone knows this. That's probably the psychological reason for the liquidity collapse.

So I'm still trying to figure out what the problem is that we're supposed to be expecting will drive S&P 500 down to 666 again. China maybe? But that's not Europe.

Thursday, December 22, 2011

more on the tumbling $VIX

Here's an article on the tumbling $VIX in the Wall Street Journal (no paywall).

Go over there and read it. Yeah, right now. It's okay, I'll wait here til you're done.

OK? Done? No9w tell me, what did you get from that?

I see that $VIX is tumbling. The WSJ author says it's a sign of "lack of panic".

Laughably, he then panics. About, y'know, the lack of panic.

(But really he's panicking about the lack of fear premium in forward options.)

Then he goes and justifies his panic with reference to an article in fucking ZeroHedge for fuck's sake. Because, y'know, if you want to find interpretations of market indicators that are informed by dispassionate moderation, ZeroHedge is the place to go, isn't it? I mean fucking really.

Buried further in the article is a better explanation - that "demand for downside puts has slackened, in part because of the slower holiday season".

My interpretation - if people have so completely exhausted themselves panicking about things worthy of panic, so that now they're resorting to panicking about the subsequent lack of panic, to me that suggests somewhat strongly that the bottom is in.

market comment - what does $VIX mean, and when does a chart illustrate mass behaviour?

Holy crap batman, $VIX has really collapsed.

Gary Tanashian pointed this out a couple days ago as a "divergent property" of the market - fear index going down while other indicators still showed a liquidity problem. At the time, I suggested to him that $VIX, being a function of options trade, might only be going down because of the thin options trade in the leadup to holidays.

I don't know that for a fact; I was just suggesting that someone smarter than me look under the hood and tell us what the $VIX is actually made out of. After all, you don't know what the meaning of a complex indicator like $VIX is unless you can derive its value mathematically from the underlying data, right?

If you think $VIX is wrong, maybe you want to buy VXX ETF (or whatver, I dunno) and play a fear pop? I'll stay away from that thank you very much.

Now look at $HUI:

It's not popped above its EMA(8) yet so it's not bullish. I have to keep telling myself this! But look at that fantastic horizontal support at around 500, eh?

Considering the good miners are being sold at end-of-year to raise money, and the bad stocks are being brutally sold off (I think the tax-loss selling is about done btw), then maybe that explains this lackadaisical consolidation at support. After all, $HUI isn't responding positively to the rise in $SPX, nor is it responding to the end of the brutal selloff in PMs.

So maybe herd behaviour is underlying the narrow consolidation of $HUI.

I dunno, I expect good miners like BTO and GOZ are still going to be making a profit at $1600 gold. After all, they were making good profits back in mid-July which was the last time that gold was trading at $1600 for fuck's sake! So maybe the field is oversold.

And now for silver:

Same thing. Consolidation at support. Not that good a chart though.

I have no fear that gold will do better from here. Silver, though, gives me pause. But I've been starting to add back my positions.

Tuesday, December 20, 2011

Santa Claus rally?

I read a good post somewhere that the traditional time for Santa rallies is Dec 22 thru to the first week of January. And the market is always strong then.

Don't be fooled. Remember that the S&P 500 is not the $HUI. Gold and silver are not the $HUI. While everything else is consolidating, $HUI is breaking down. It closed yesterday below 500.

If you follow me, you know by now that I consider miners to be bullish when they cross above their EMA(8). Well....

RSI(8) is refusing to turn above 30, which could mean more downside to come. And the EMA(8) is 25 points above where we are now.

We could be in a little consolidating bottom right now, with a few minor lower lows, and ready to take off upwards. You see this same pattern at tops, just reversed now.

But I think it's very weak because everyone's scared of a liquidity collapse. Gold miners are the first to die. So people are selling them all. Sad really.

As for gold? No, Gartman is not calling a bear market. He doesn't see gold dropping below $1400. Don't believe the headlines. In fact, go chart gold in Euros. You'll see something interesting. As in, no drop. It's the USD strength that's hit gold.

And deflation? Doesn't matter. The price of gold advances at about 5.7 times the negative of the real interest rate. We will continue to have negative real interest rates until governments decide to strangle inflation with high interest rates - which will require us to have high inflation first.

Anyway... I'm out of gold stocks almost entirely. I still have AQM (strangely not dropping) and GOZ (not too worried, there's been good volume)... and, um, that's about it. Otherwise I'm in cash for the rest of the year cos I'm too damn busy and I don't want to buy in an illiquid season.

But I'd be happy to buy some paper gold or silver (maybe HBU and HZU) if things can drop just a bit more.

Friday, December 16, 2011

Analysts at 2011 PDAC who were proven right.

I've got a notebook full of notes that I took while reading the various "great traders" books. Aphorisms and such, you know. The back is also full of notes from when I had to bury my sister, so I figured now's a good time to get rid of the damn thing by transcribing all the traders' stuff into Word.

Reason I want to do that is I'm going to try to grow up a bit and develop a system for myself. I'm not a buy and hold person at all, so I need to get a proper system to get myself in and out, instead of "buy and hope".

Anyway... I've gone through a few pages, and have now run into my notes from the Sunday analyst do at the March 2011 PDAC. Some interesting things are here:

  • Ian McAvity predicted $45 silver and bull oil. Pretty good, eh? He also thought the S&P run was "overextended and so vulnerable" - and as it turns out, we were $25-$30 from $SPX's peak, and 100 points above where we are now. Good call Ian McAvity! Seems like a Tanashian-type newsletter, same price too except one-third the number of issues. And on paper via mail, apparently. Might check him out... then again, I already subscribe to the biiwii newsletter.
  • John Kaiser: he's not the Russian KGB stooge Max Keiser from Russia Today. He drew the parallel between low short-term interest rates and the pension fund collapse; I feel this is an important yet completely ignored undercurrent in modern mass political discontent. He predicted a young-generation uprising against the baby boomers: is this anything like Occupy Wall Street? At the same time, he was also calling for inflation to cause supply shocks and thus rioting; yeah, Egypt was unresting already by PDAC, but now we're more worried about deflation, eh? As for his picks: Avalon Rare Metals has collapsed about 60-70% and QRM's down over 50%. Rare earths? Is teh suckz. Kaiser rationalized a fad, is all.
  • Ha ha! Then I ducked out and chatted with Dynasty at their booth. They said Ecuador wanted to get a few contracts done before June. Ha ha!
  • Mickey Fulp's talk was basically a primer on resources and reserves. He noted that a resource basically is worthless - only a mineral reserve is mined. Good point, ignored by many perhaps. No predictions from Mickey.
  • Brent Cook did his chat on the Seafield pump. Answered a question on Sunward, feels it to be low grade. With respect to Kaiser, Brent's AMM has also gone down about 40% since his PDAC talk. Lydian has held up quite well though.
  • John Doody basically pumped his subscriptions for half the talk. At the same time though, he threw out Yamana as one of his picks, and that's done well since, so good on him!
I guess I'll be going back next year... we'll have to see. I really hate the 200-feet-underground venue. But I already got next year's booklet, and there are a lot of really cool classes.

who knows?

Dude, I really don't know. UUP is descending from overbought by RSI(8), $VIX refuses to spike, GLD was oversold and is finding support at EMA(250), copper's refusing to fail, pretty much everyone's refusing to fail.

And yet there's insufficient volume to confirm anything positive is about to happen. And as Gary T points out, all the markets are below the happy range and in the scary range. JNK:LQD is still turning down, today.

Either they want to lure us back in to punish us more, or this really is the end of the carnage. Or, maybe everyone who wants to sell because of the oncoming dooooom has taken Friday off.

I think best, wisest thing to do is wait til UUP turns down, $HUI turns back up, and GLD and SLV both turn up. No? Or, at least, don't make a trading decision on a Friday when I can't get any volume confirmation.

Wednesday, December 14, 2011

Thanks for having me on your list, but...

Weird. Whenever the market dumps I get a spike in traffic. As if anyone really feels they have a need to consult me.

I'm just as bad of course - a million hits on Biiwii from my desk this morning.

Probably the best thing to do is determine for yourself the times when you should sell and get out. My time, for example, should have been last week when the $HUI was rolling over and failing to maintain its EMA(8). That was when I shoul have sold. And I shouldn't have been buying back other things when it was under its short-term EMA.

I've sold a bunch of stuff this morning - still holding my GOZ, though - and am hunkering down in my gun-filled bombshelter for the rest of the year. There is now no more newsflow to save us - the Euro pols have all gone home for a well-deserved one-month Xmas vacation. Gold's broken its triangle downward, JNK:LQD is rolling over, GLD:SLV is busting out, and as Bonddad Blog notes UUP not only busted through resistance, it did so on increasing volume.

I am also fearful of the heavy pukes into the bid on silver and gold on the overnight trade.

I'm going to spend the rest of the year designing a proper trading system for myself. I hate giving back my hard-earned winnings on stupid moves.

My cat has a nasty wound on his head so I'm off work the rest of the week. Vet comes tomorrow to shave it, clean it and check it out. Then I get to babysit the poor twerp all weekend. He hates the vet, but he loves being fussed over by mommy.

I've spent several months giving to other people with no fucking thank-yous in return - burying my sister and sorting her estate for a scumbag brat nephew, bailing out one guy after another at work because I'm apparently the only guy here who knows how to do their jobs, taking in a starving abandoned cat. Oh - and giving back to the market of course! :-) So right now I'm totally burned out and unable even to make it til the Xmas shutdown at work without extra time off. Thus part of the explanation for the selling - I have no time to babysit my stocks.

MFL was beaten down already, months ago, so I'm not too worried about it now (if it breaks $10.50 I'll reconsider). GOZ shouldn't go anywhere, nobody trades the stock anyway.

I'm impressed with the relative - no, absolute - strength in Rio Alto. WTF, eh? Makes ya wonder.

Anyway, here's me signing off. Gotta catch a bus, or whatever.

let me get this straight....

RIO sucks so bad that nobody would ever want to buy them out. So it pukes down to $3.24.

FVI sucks so bad that it dives to $5.94.

GUY sucks so bad with their worthless deposit that it dives to $7.33.

XG sucks so bad it goes down to $8.06.

DPM sucks so bad they go down to $8.50.

AR sucks so bad they go down to $6.33.

All these companies that mine actual gold and silver, or have beautiful gold or silver properties, are worthless?

Today's the apocalypse?

$HUI's RSI(7) right now is 24. UUP's RSI(8) is 78.

I was thinking of dumping all my stocks today. Then I saw nickel, aluminium, led and uranium aren't diving as bad as silver. Probably because you can't puke them into the market at 8AM.

Tuesday, December 13, 2011

James West on CNBC!!!!!!!1!eleven!!

Sorry, still busy at work. Will probably remain very busy until the market no longer matters (i.e. the Xmas break). Lack of posting will continue until morale improves.

Here's a link to James West! On CNBC fer cripes sake!

Sunday, December 11, 2011

What's wrong with Don?

And if you think *I* overreact....

Everybody's talking about your anium

GT's been talking about Uranium. Mickey Fulp is giving interviews about Uranium.

I refuse to be drawn in until the chart looks better.

In any case, here's food for thought:

Though the Fukushima disaster happened on March 11, it's interesting to point out that the U world peaked about a month earlier.

Since then, U.TO (cyan line) is down 40%. FIS dropped 60% - but then raced back, probably because of the Hathor buyout speculation.

Beyond those two, you have a load of puke that's 65%-70% down. And then at the very abject bottom you have Macusani Yellowcake.

Cameco, by the way, is down about 55% on this same graph (not shown). I don't know about you, but if I ever were to want to buy back into the U space, I'd not want to do it by betting on some crap exploreco.

Hey, Occupy Toronto!

Here's a shout-out to the commies and gender-queer activists at Occupy Toronto.

Guess what? There's actually something of value that you could be protesting against, instead of your endless decolonization-of-gender workshops and free blowjobs for Sid Ryan.

Apparently, MF Global stole all its clients' money perfectly legally, through rehypothecation. No news there. Well, apparently, rehypothecation is also being practiced by Canadian banks.

Which means that your granny's money at RBC and/or BNS can be stolen at a moments' notice. Um, legally. And, um, you'd think that since this violates basic law, that the Canadian government must be expressly allowing it.

Now, I know that the Occupy Toronto folks are a bunch of hardcore Maoists who don't give a shit about their own grannies. Because anyone with more than half a million in savings is an enemy of the people, according to them. And this includes their own grannies, assuming their dead husbands actually saved money for them.

My own dad, for example, was proletarian as you can get - he was a postman. Thankfully he left a pile of money for mom, saved up by years of feeding us cheap shit sausages and homegrown potatoes, $20 Christmas presents, and working 15-20 hours of overtime a week. (Plus the luck of buying a new house and locking into a mortgage right before the inflation of the 70s - which is how all retired proletarians in my city got wealthy.) Of course, her dead husband's life savings means she's the enemy of the people, at least according to a bunch of YorkU Pol Pot worshippers who have never seen anyone save money in a bank account before.

I had to sit her down and have a chat with her after reading this article. Basically, I asked her what she would do if she found out tomorrow that Royal Bank had gone tits-up, and all her money there was gone. I explained "counterparty risk" and "regulatory capture" to her.

I noted that a "Guaranteed Investment Certificate", which as it stands pays nothing (1.5% for 2 years right now, I think) because of artificially low interest rates (i.e., robbing from fiscally prudent grannies to give free money to young professionals to finance gigantic monster homes), is guaranteed by the government. Well, this proof of rehypothecation of client money in Canada means that GICs are actually worthless - because if rehypothecation is happening in Canadian banks, that means the government no longer recognizes property rights when they interfere with a bank's "right" to play casino with their clients' money without their consent. So a "Guaranteed Investment Certificate", in addition to not actually being an investment, is now also no longer even guaranteed.

So now you have a real smoking gun, guys. Banks in Canada are robbing the people. And they're doing it legally with the help of that scumbag Republican Stephen Harper.

So can we count on an Occupy Toronto demonstration with actual real value, some time in the future, bringing to light that funny-business is now happening in Canadian banks?

Or will it be another fucking march against an elected mayor and a disabled-lesbians-of-colour rally?

Saturday, December 10, 2011

Rick Rule interview

Here's some guy Chris Martenson, interviewing Rick Rule, the guy who gave Brent Cook his first job. Or something. Whatever. Anyway, Rick Rule talks about gold stocks. Or something. Which is funny cos he just recently pointed out to the world that gold miners are chickenshit screwups who are so horrible at managing costs that their CEOs could never get hired to sweep floors at a fucking auto parts company, and that's why gold miners have perennially underperformed relative to the appreciation in the price of gold.

Unfortunately I heard about the interview through ZeroHedge. So I'll be listening to it drunk while cleaning my Heckler & Koch MP5s in the lead-shielded darkened storage room where I keep my MREs and 500 cans of ammo.

BTW, it's funny how ZeroHedge feels the stock market is going to supposedly collapse. Um... except for gold miners. Strange disconnect there. You'd have to wonder if maybe Ron Paul is sending ZH some money to promote the mining sector so he can unload all his chickenshit Mag Silver and Kinross shares.

UPDATE: So, I've since listened to it and it's actually sort of a decent interview. Rick Rule goes into non-miners subject matter, like natgas and oil. He seems to know his stuff broadly. He and Martenson actually do have a laugh at how Rule's criticized the miners for the past ten years... but, y'know, this time is different, because the producers are going to be throwing off so much cash that people will all of a sudden want to own mining shares.

Of course, you have to wonder why people would want to own shares of a company producing from a declining and limited resource whose price is overly subject to macro shocks (i.e. every single miner) when they don't even bother to hand out dividends. Why would anyone want to own some garbage like ABX or Newmont with their shitty 1-2% dividends when they can own Bank of Nova Scotia or Bank of Montreal and get 5%, while remaining shielded from a commodity-crash downside? Why would I dump JNJ's defensive value and constant 3.5% for a miner who can't give me more than 1% and who exposes me to a possible 50-80% haircut when fear of the next "Lehman moment" comes?

Is share appreciation the answer? Will people want to own miners for the share appreciation? OK fine... so show me share appreciation. Then maybe I'd expect people to start piling in. Hint: it hasn't been happening generally. That's why people won't pile into gold miners generally.

Of course your odd analyst might be able to pick out specific producers that are going to outperform the herd, and so those stocks are worth owning in the hope that their prices go up. Sometimes they do. All I'm saying is that I don't see any macro/sector reason for owning gold stocks in general.

hide the children

nobody expects.... a comedy Venn diagram

From failblog.

Friday, December 9, 2011

Friday video

I find the following to be eerily similar to conversations with Conservatives:

Especially the part with "I came in here for a good argument." "No you didn't; you came in here for an argument."

And the descent into self-referential surrealism at the end.

Very much like arguing with conservatives.

But less funny.

status update

Whoops! So busy that I never even posted a Friday video. I doubt you'll mind.

I'm done my busy crap at work, so now I can comment on things.

$HUI: it's hanging below its EMA(8). That technically is bearish, by the criteria I've been using all year. But, still, SIL is above its EMA(8), and some of the stocks I follow are moving strongly upwards. So, I think this is a time to take on a bit of risk and buy in, if you've got something you've been thinking of buying.

My stocks: obviously I don't have REG anymore, as it was an utter disappointment. Big loss there. Again, I bought too much of an exploreco. On a whim. On a hope. Bad stupid idea. That'll be the final time I make that mistake.

I think I'll limit my exploreco purchases to very small numbers - or even ignore them altogether from now on, since the amount of work needed to follow them makes it not worth my while if the position sizes are going to be tiny. I have a decent list of producers and near-producers/buyout properties to follow, so I should stick with those. With the smoking ruin of my capital that's left from the REG fiasco, I spent some time yesterday picking up some more GOZ, some BTO (after dumping it at a profit the day before), some USA and AQM and GUY. Plus I bought back some little bit of the RIO that I dumped a few weeks ago. Good time to shop, when stocks are down. I'd still like to pick up some SBB and AR, and FR and SLW look attractive... but too much silver might still be a bad thing. I'll be happy to keep a big cash cushion in case we still have a couple scary days ahead.

I'm also curious as to what to make of YRI's chart: it's a lot healthier-looking than the other miners. Any move upwards would send it into blue sky. Why would a chartist like AR, yet not YRI?

PMs: you think silver can drop below $30? You think gold can drop below $1700? Seriously, I have no idea. But I'm thinking they won't.

Risk indicators: $VIX is moving down strongly on the Europe "solution". UUP isn't looking as promising, nor is GLD:SLV; but JNK:LQD looks okay. I'm thinking that maybe the Euro summit "solution" was finally enough to make the market roll its eyes and say "well, whatever; we're tired of that shit, it's never going to end, it's Europe, we shouldn't be surprised". I'd be very happy to see the super-correllation between EURUSD and $SPX to end. Shut the fuck up about Europe already and let's move on.

$SPX: very tightly rangebound, so it seems. The volatility still seems to be there, just shrunken into a very narrow band. Again, I think all the symmetrical triangles you're seeing in the Tanashian Indicators are a representation of how interest is being lost in the goings-on in Europe. There's still the volatility, but it's tightening up.

With all the cash that's supposedly either on the sidelines or in USTs, maybe the sym-tries will all resolve upwards? After all, as Gary T says, the USTs are a reservoir which, when the bull signal is given, spews its suckers back into the equities. I say, they must be getting bored, sitting on the sidelines waiting for 2008 to happen. Uh... again.

Speaking of Europe, cutting deficits and social spending in Europe won't solve anything, as Ezra Klein notes; in fact, for much of the aughts Germany had huge deficits, and they're also big on that ol' socialism bogeyman. In fact, what destroyed Europe's finances was (guess what?) bailing out the banks, as you can see by Ireland's dismal spiral into the toilet drain.

Again, to beat a dead horse, to recapitalize banks what you should do is force them to issue a load of new shares - just like explorecos do all the time. After all, by capitalism, it's the shareholders' own fucking fault that the banks go bankrupt despite being allowed to use funny accounting practices that wouldn't even fly on the Venture exchange. So punish the shareholders with massive dilution. If that's not enough to float the bank, punish the bondholders by making them take haircuts on bank debt. Don't force governments to take on the bank's debt, because all that does is destroy the governments' balance sheets. Then everyone suffers as you get a run on sovereign debt. We're seeing that now.

But oh no, you can't punish the shareholders: because the banks' shares are owned by the elite billionaire ruling class, and they wouldn't allow that. Fucking fascist scum.

Tuesday, December 6, 2011

market comment - the good, the bad, and the ugly

Well, GLD:SLV has gone down, JNK:LQD has gone up, $HUI went up, S&P 500 is up. Those are good.

$VIX is starting to threaten, and UUP still shows US dollar strength. That's bad.

I read a few articles today that suggested that the German central bank is running out of collateral, or something - as in, it has nearly none. That's the ugly.

I'm really inclined to wait here, and not do very much. While other people are hoping for an amazing solution out of the Friday Merkozy summit, I'm starting to think Europe is unrepairable all of a sudden. Unless, y'know, money-printing... which is a pretty hollow hope.

PS I'm pretty damn busy at work, bailing out someone else who was completely unable to get his own work done on time. So posting will be light until morale improves.

Monday, December 5, 2011

strange day

Even though $SPX is up, UUP looks weak, JNK:LQD is copacetic, and $VIX is calming down, we're still seeing major selling of silver, gold, and the miners.

Very very strange.

Oh well. Sabina Silver is starting to act with strength today, so I'm happy.

Sunday, December 4, 2011

clean Sunday Christian hilarity

Sometimes it's just too good to not repost.

See more at Very Demotivational.

Technical analysis

Bad things.

1) Friday was a bearish double outside day.

2) The last 3 days look a little bit like a "bearish abandoned baby", which is a really bad candlestick pattern.

3) Nothing else was crashing on Friday, so it's very ominous that the $HUI did so badly. Although: the US dollar crept up fairly strongly yesterday. No, $VIX and GLD:SLV still look okay, but UUP creeping up kinda worried me.

4) $HUI could easily gap-fill down to 550 now.

5) But that would make MACD fail a crossover, which would scare people and make them cry.

Was this just profit-taking? People being too shit-scared to hold their Yamana shares over the weekend? People doubting that gold can stay at $1745? Could be. gold-miner investors probably have itchy trigger fingers right now, and are happy to dump into strength.

The only thing in this chart that gives me hope is that Friday is still being supported by the EMA(8) - the short-term trend supportline - and the mid-term EMA as well.

Some things to consider

Here's some things I've read over the past 2 weeks that have begun to coalesce in my head, forming the narrative that I'm going to stand by:

1) I've read, from people who actually know what they're talking about (i.e. not pundits), that it's legally impossible for Greece to leave the Eurozone. It requires a redraft of the Euro treaty, which would then require ratification in all countries, including referenda in some. This ratification will not happen in countries like Spain or Portugal, because they'll realize they're next to go. It would also cause an utter collapse of the Greek sovereigns, the Greek banking system, the other banks in the Eurozone, and the Greek economy, while it plays out - and there's no way to get it to play out in a short timescale. It would take months. Again, the other weak countries would also see a collapse, as everyone would be betting on who's next in line to leave after Greece.

2) If a magic wand existed that could magically kick out Greece, chaos would hit: the Greek sovereign debt would collapse, which would take out the Euro banking system. Other sovereigns would collapse, as the bond market would start taking bets on who's next. Businesses in threatened countries would no longer be able to conduct business, as the inter-business counterparty risk would be existential in its severity. I've read estimates of an immediate periphery economic contraction of 50%, and a core contraction of about 25%. I'm going to assume that's a decent estimate.

3) Given the above, nobody is going to want to leave the Eurozone. The economic ruling class will do anything to avoid deflationary depression.

4) Given the above, fiscal union and Eurobonds is the only solution that eliminates the Greek "free rider" problem. The technocrats screwed up by creating a currency union with national sovereignty over fiscal matters. Now the screw-up gets solved.

5) European politicians aren't so utterly fucking stupid that they can't see this. (We're used to American politicians exhibiting a much higher level of stupidity: that primal, Theocratic level of stupid doesn't exist in the Eurozone. It does in the Russian bloc, but not the Eurozone.)

6) Complicating everything is that the Euro banking system is heavily deleveraging to meet the next round of Basel requirements (due June 2012). I've read $2 trillion as the estimate of deleveraging required. So the ECB can print $2T with zero inflationary impact, because that's the size of the M3 hole left by the bank deleveraging requirements. Again, someone forgot to tell the technocrats that nowadays it's the banks that print money, not governments. (Blame it on the Chicago School economists - they tend not to see inflation except when it's caused by government.)

7) That money printing won't be inflationary. But people will expect it to be. Say hello to a speculation-fueled reflation of the commodity market. For a bit. Cos....

8) The next true doom will come from China (and India maybe?). But that will still take a year or two before it hits the market. Note to Otto: I would really hate to be Peru and Chile when that happens.

Friday, December 2, 2011

Hybrid Kids

I personally think Morgan Fisher from Mott the Hoople did a better version of "Wuthering Heights" on his Hybrid Kids pretend-compilation album.

But the best is his version of "D'Ya Think I'm Sexy".

This guy listened to far too much Residents in his time.

watch out, something might be about to go horribly wrong

The $HUI's dropped strongly today, despite silver and gold and copper looking good.

Upon snooping, I saw that the US Dollar has popped up strongly. $VIX is still lower, but has only now just started creeping upwards.

Looks fishy. Must keep an eye on this. Is it just a bunch of people dumping cos they don't want to hold miners over the weekend? Or Friday profit taking? Or the hint of something bigger?

Thursday, December 1, 2011

Friday videos, post number 666 edition

It really is post number 666. (One of those posts, you've never seen - it's actually scheduled for next March, and basically reminds me to dump all my mining stocks before I go to PDAC.)

And so, here's a video by Iron Maiden, which seems to suggest Gojira (a Japanese monster created by radioactive waste) has something to do with The Revelation of John.

Funny, it's in standard 4/4 time, but it has so much syncopation that it really throws you off.

Wednesday, November 30, 2011


For some reason MFL and SBB seem not to be trading.

My discount broker's L2 often breaks down, so I went to check them on TMX and... same thing, prices not gone anywhere.

Why would both be halted?

I don't get it.

The great premarket kaboom

Gold skyrockets this morning over $1740, silver up too.

Here's the Zerohedge versions of why:

Wall Street Pundits' Instant Response To Global Fed Bailout

Market Reaction To Global Bailout, Sovereigns Disappoint

Here Comes The Global, US-Funded Liquidity Bail Out

And of course ZH are screaming bloody murder because we get no apocalypse.

I expect $HUI to smash through its EMA(8) and tear to 600 pretty darn quick now. It'll be a fun day to watch the markets!

Tuesday, November 29, 2011

quick comment - up seems like a nice direction for the miners

Strangely, while silver and gold are moribund this AM, the $HUI/GDX is up well over 1%. That's even better than the S&P 500.

No clue if this is just boring old morning retail buying, or if it's something better. But it sure is nice to see miners not stinking up the joint.

At this very moment $HUI is right at its EMA(8). If it breaks convincingly thru 550, then by definition we have to start expecting a bull run for $HUI.

Weeeeeeeird, eh?

Monday, November 28, 2011

Regulus new corporate presentation

Actually the new corp presentation is a full month old... so maybe a new one comes in a couple days?

Jordan Roy-Byrne likes gold stocks

Over at Gold Report, Jordan Roy-Byrne said that gold stocks are due for a breakout. Maybe worth a read?

Anger and revolution is now victorious over the sissy herd

Ritholtz is now as angry as Karl Denninger. Congratulations bankers, you've now raped captialism to death. I guess you'll need that police state now, eh?

quick comment on today's action so far

S&P pops 3%. But it doesn't seem to be the predicted face-ripper December rally... not just yet.

$HUI has almost reached its EMA(8), but is just hanging there. Looks like there's a lot of selling into the bounce. A person who was scared would probably use this point to lighten up/cash up by dumping his profitable positions.

The question is, is this the final selling from the smarter weak hands? If so, all the sellers are gone and you're left with buyers - the definition of the start of a rally.

Or is it really a good idea to dump your stocks overboard and cash up? I guess it depends on your expectations.

I have learned not to start taking my positions until the plummet has finished - to watch my EMA(8), which is apparently the theoretical model I want to use for pennyflipping the miners.

Now still, I'm actually fairly happy with my situation now - I have a lot of stock tied up with producers that have had their prices heavily de-risked (SBB, MFL, GOZ, USA, BTO). My big problems are 1) by Gary Tanashian's thesis, I own too much silver (cos silver collapses in the event of a liquidity crisis, which we might soon see); and 2) I've got more than enough money tied up in highly illiquid explorecos, which could conceivably drop another 90% if things get tetchy.

So, the other lesson to take away from this is to never buy an exploreco on a new reccie. Buy it on weakness and fear, only. This seems to be something like what I've heard Mickey Fulp say in a recent interview. It doesn't matter whether their property is good or not; all that matters is that you buy low enough that your pain threshold can't be reached on a dip.

After all, there's always another miner you could invest in, if you miss the bus on this one - that's one thing I've learned already, which informs my decisions.

Sunday, November 27, 2011

more news

Wolfgang Munchau at FT has an article I can't read cos I don't subscribe.

Calculated Risk has a link to it and a few others: go read it. Among other news, the trading systems are testing out software that'll allow trades to settle in non-Euro european currencies.



more hopium

Oh - silver's up over 2% on Globex open. Tried to dive, but now Hong Kong pumped it back up. $31.73.

Here are some happy stories via Reformed Borker. Josh Brown seems to be a real hope addict. I wonder if this will provide a slight Monday pump, and then fizzle? Seems rallies have been so heavily sold into recently, they've never made it past noon.

In The Event We Don't Die - Black Friday estimates suggest a retail boon, and by the way the Germans aren't going to wait for bank runs before they print (because we German people aren't a bunch of fucking morons).

IMF Could Be Preparing a $794 Billion Loan for Italy (or Not) - first I head of this story cos I haven't turned my Atrix on this weekend yet, so I haven't been keeping up on the RSS stream. Anyway, this article isn't that dependable, as it actually mentions ZeroHedge - on the "no they're not" side, of course.

Is Europe Moving Towards a Bazooka? - from PragCap, which is one hell of a better site. And here's the money shot that I was hoping for: "it wouldn’t be shocking to see a face ripper rally in equities in the coming weeks leading up to that (Dec 9) meeting. There are A LOT of investors caught flat footed right now betting on the end of the world scenario. Remember, this is the global government put at work. Getting in front of this via short positions has been the equivalent of stepping in front of a bullet train."

There's a funny comment in that post too. I repeat it in its entirety:

Zero Hedge is worthless. Their flow chart works something like this:

Economic environment
Bad OR Really bad
| |
Recession OR Depression
| |
Worlds ends OR World ends in flaming ball

That is literally the most worthless website on the entire internet. They have lost more money for people over the last 3 years than any website in the world.

Anyway... I realized upon reading the article that Armageddon is the crowded trade right now. When you beat down every single 1% rally, when everyone's expecting Germany to purposefully let their banks collapse before printing money... that's a crowded trade, innit?

I've been looking at 2008's S&P 666, and wondering if we're going back there. Now I realize every other fucking hairy-toed tabacky-chawin' pilgrim in the market is doing the same thing.

interesting post from Ritholtz

Interesting little point that's been making the rounds recently in the American econoblogosphere. If the Super Duper Itty Bitty Kitty Committee can't agree on anything, if the US houses of power can't agree on anything...

The US deficit will pretty much go away.

Not totally go away, but pretty much; a lot of the tax breaks that are assraping the budget will expire this year and next if they all simply agree to agree on nothing.

The best is the elimination of the Bush tax cuts, or "job creators tax cuts" as the Republicans call it in every single speaking opportunity. My opinion of Obama soured completely when I saw he had no interest in eliminating the Bush programme of free money for the rich - he proved then and there that he was as bought and paid for as any other Yank politician.

Is this a hopeful story for December? Will the broader news media pick this up and talk about how the US deficit will come under control simply by morons refusing to give away more money? And then will that bring down t-bills and USD, giving us a December rally?

I'm asking cos someone I just finished reading seems to think it's not the end of the world right now, and there's a reason to hold mining stocks instead of dumping them. So I'm trying to figure out (ahead of time) what media/market narrative could show up that will make people feel hopeful for December.

Friday, November 25, 2011

no video this week

I don't think anyone really watches the videos, and I was busy at work today, so no videos for you.

Instead, here's a funny quote I just came across:

"Some people are like slinkies. They're not really good for anything, and you can't help laughing when you push them down a flight of stairs."

Jim Rogers and Alex Jones?!?

Alex Jones is one-a-them "paleoconservative" types with a radio show, always going on about One World Government, the coming New World Order, that sort of stuff. Not at the level of David Icke mind you (he called David Icke "the turd in the punchbowl" for all his stuff about the lizard people), but still a little loony.

And yet, I like that Alex exists, because he does get people interested in rights, freedom, the constant creep of fascism, and so on. His broadcasts encourage people to stockpile guns & gold, which I personally think is good for democracy and human progress. No, really. I do.

Anyway... for some weird reason, commoities overlord Jim Rogers appeared on the Alex Jones show recently. I'll try to find a better link sometime, but for now, try this one and see what you get. (I can't check this out while at work so I don't know how good it is.)

At least he'll make you feel better about commodities. Seems he's more bullish silver than gold right now. Faulty reasoning though - he prefers silver cos gold's at an all-time high. I've read you should actually bet on the winners, instead of the also-rans. Oh well, whatever.

quick comment

If you were really smart, you'd probably be using any opinion I give about future market movements as a contrary indicator. I'm just a particularly eloquent member of the herd.

With that in mind, with all the doom I've been reading, I really have been trying to fight off the belief that there's utterly no hope for the markets right now. It's all been "blah blah bank runs, blah blah Germany will let Eurozone crash before they support the priting of money, blah blah China real estate is collapsing, blah blah liquidity collapse." So is this the bottom? Or am I right this time?

We'll see, I guess.

Thursday, November 24, 2011

Yank-free Thursday

No yanks in the market today, apparently. So all we see in the market are a few silly Canadians puking shares into thin bids. Especially with the explorecos.

Wednesday, November 23, 2011

Grandich went double long S&P

Whatver else you can say about Peter Grandich, and please do, I think he's generally been very good at reading the market.

Well, today he says he went double-long the S&P - he thinks the market's oversold and he wants to play the short-term seasonality.

Speaking of which, apparently the l-tryptophan in turkey meat, while a sedative in itself, doesn't affect the brain when taken with protein (i.e. turkey meat). So the natural happiness in the stock market after turkey-based holidays probably has more to do with feasting and alcohol ingestion.

Revett Minerals

One stock I made a fair bit of money on last year was Revett. (Should have held on to the stock, I would have made a lot more than I have this year.)

I've been looking for news about Tarsis today, and stumbled across this news release about Revett. Apparently, their monster deposit (that was tied up in enviro litigation for a long time) has been cleared to proceed. No big deal, since they don't have the capex required to move it forward... but I bet the news was a fantastic pop to their share price. (edit: bit of a pop a few days ago, now it drifts back down as people realize the capex for Rock Creek is too high.)

Anyway... a few interesting things. #1, Revett seems to be back to their hedging strategy, hedging with forward sales of copper. #2, read what the management there think about future copper prices. You might find it silly.

I'm not recommending Revett (they've had financial issues in the past that were sort-of-not-really their fault, but which still scare me), but it was an interesting article just for the prediction of $6 copper in 2012.

on rare earths

BTW, I'm not an expert, just going by what I've seen here and there. But from the little I've read, it seemed to me that the problem with rare earths is the following: digging then up is meaningless. Any moron can dig them up. You have to refine them. Nobody knows how to do that except some guy in China.

Apparently rare earths all show up together - I guess because they're the products of radioactive decay of higher elements? - and they appear in strange minerals that people don't usually see. So the metallurgy is apparently difficult: something that no gold/silver/copper/uranium guy would have ever seen.

But beyond that, once you've got a "concentrate" with your gadolinium-and-dysprosium-and-holmium-and-ytterbium-all-mixed-together, you are basically in the possession of nothing more than funny mud that is still utterly fucking worthless to every manufacturer on earth.

Apparently each of those metals is chemically enough like the others that it's difficult to separate out each one - you need a really advanced chemical process to do it. This isn't "mining engineering", this is crazy process-level chemical-engineering stuff.

And not only do you have to do it, it has to be done perfectly. That's because if I'm a permanent magnet manufacturer looking for a supplier of niobium (or whatever they use, I don't care), I want it to be something like 99.999% pure or better; that's because these rare earths' interesting physical properties (that you need them for) don't manifest themselves when there are impurities present.

And apparently the only people who know how to do the process engineering to separate and concentrate each metal are 2 guys living in China. And, maybe someone in the US who retired 40 years ago, if he's not dead yet - cos the US gave up on the refining side of things ages ago because back then there was no use for rare earths except funny university experiments in materials science or x-ray crystallography or something.

So when you look into a rare earths exploreco, ask yourself what is their end goal:

1) Are they going to dig up a bunch of rock and then wait for free candy?
2) Are they going to dig up a bunch of rock, then process the rock into a worthless mixed concentrate, and then wait for free candy?
3) Are they going to dig up the rock, process into concentrate, and then pay some advanced process engineering firm a load of money to design something that has never been designed outside of China, so that they can separate and purify the individual elements to make actual money?

Thankfully I never got suckered into the rare earths thing. Because all those deposits you hear about are absolutely worthless. Nobody's going to pay them a red cent for their concentrate. Because you'll just have to ship it to China to refine it, and we all know China's attitude towards the rare earths market.

If you know I've made any factual mistakes up above, let me know. But I'm pretty sure I have the chemistry/materials science part right.

Tuesday, November 22, 2011

mildly offensive joke for you

My dad told me a much longer version of this joke, when he was in his 70s. The remarkable part was that he thought he had to wait til I was old enough to tell me this joke.

Warning: this joke contains harmful racial stereotyping. It's also still rather long, which may offend people too.

There's this guy whyo works in a real estate office. One day, this old jewish man comes in and says he wants to buy a house. The guy asks him, "well, what sort of price were you looking for?"

The old jew replies "cheap. Probably very cheap. I just got off the boat from the old country, and I only have fifty dollars to my name."

Well, the real estate agent rolls his eyes, but decides since it's a nice day out, he'll take the old man on a drive around town to see the properties that they have listed.

The first house is an old, run-down, ramshackle old farm house with half the roof missing. The agent says "this one's a real fixer-upper, and the land is leased. But it's listed for only $2000."

The old jew says "but I only have fifty dollars! And no job, so don't you go talking about mortgages. How can I buy such a house? Foolish boy, show me something cheaper."

OK, so the real estate agent drives on to the second property. It's basically a garden shed with a window, situated right next to a stream, close enough that it'll obviously get flooded with every heavy rain. The agent says "this one has a nice riverfront location, and the water damage is easily repaired. The owner can give it to you for $600."

But the old jew says "how many times must I tell you! I only have fifty dollars! Forget showing me such things, I cannot afford them."

Well, the real estate agent gives up, and decides to take the old man back to town.

But as they're driving along, they go past an outhouse with the real estate agent's company's sign on it. The old jew sees it and says "stop! What about that there?"

The real estate agent says "but it's an outhouse. It's a small shed with a hole in the floor for pooping."

The jew asks "yes, and how much does it cost?"

The real estate agent looks it up in his book, and is surprised. "Fifty dollars," he says.

The old jew relies "I'll give you $45 cash."


Years later, the real estate agent is driving through the same area, and decides to go look for the old outhouse. He's surprised when he comes up to the property... there's a large 2-storey addition built onto it on the east, a 3-storey addition on the west, beautiful gable roofs, marble stonework, a tennis court out back... he's amazed. He goes and knocks on the door. The old jew answers.

"Hey! And here's the young man who sold me this house, the day I came off the boat from the old country."

The agent asks him, "I was just passing by, and I'm amazed at what you've done with the place. But you said you only had fifty dollars! How could you afford to build all this around an outhouse?"

The old jew replies:

"Well, after I moved in, I rented out the basement to a Polak."

And that is why I think KGHM will buy Candente Copper.

a HUI chart for you

Oh look! It's a green line! And it links up the 3 most recent bottoms perfectly!

Yeah, maybe it's nothing. But that sure looks bullish, to me.

Although $SPX and copper are failing to confirm. Then again, there's been more than enough loudmouths out there proclaiming that the PM miner complex is about to outperform the broad markets.

It's sorta like a dream of theirs or something.

Also btw - I highlighted (in very light yellow) the last time we had a drop in the $HUI that didn't make it below RSI(8)=30. (Though, looking at this, we also had one in mid-October). It looks like a decline to only an RSI(8) of 35 or so means the next upleg could print a higher high.

Then again this might just be a gap fill day.

Check out the confluence of important EMAs at 567.

I'm not trying to suggest anything or present an argument for your agreement, because I'm the guy who dreams of a dystopian future where giant wardroids drive over piles of human skulls.

I'm just saying, there's neat things in this chart. Wonder if maybe we're going to see some bullish relief in the PM miners?

And that's all I have to say about that.

And the doom recedes....

As biiwii notes, the IMF is now going to hand out free money to bankrupt Eurozone countries.

Probably because world leaders can also extrapolate from the 10-year S&P chart to see we're on the verge of another 2008.

Wonder why silver's shooting up?

Doom & gloom just got so damn prevalent over the last little while. I almost got faked out... but I held the line.

Now I'm heavy with MFL, REG, SBB, GOZ, BTO, TCC, GPM and USA. Wish I also owned some others, but oh well what can you do.

Brent Cook cut-and-paste for free download

I haven't been reading much actual geological stuff recently. But today I finally got around to making a print-out of Brent Cook's "Geo-Insights", on one of the colour printers at work.

I'd rather read geo from someone who frolicks with wild rocks for a living, than from some scholarly journal, anyway. The journals tend to over-use technical terms for no good reason - sorta like the geology section of most mining company news releases.

I suspect Brent doesn't frolick with wild rocks that much any more - he seems to spend most of his time nowadays (simulating the) drinking (of) whiskey in a bar with Mickey Fulp while being interviewed by some young lady - but apparently he misspent most of his youth frolicking with wild rocks, so maybe I'll learn some useful stuff.

I printed it out so I can sit back and read it the old-fashioned way. And highlight stuff. I'm really starting to hate reading pdfs on a computer - I do that too much for work.

two (2) thoughts on silver

1. Oh look, siver's up 4% today. Hm. Options expiry obviously has nothing to do with that because there's no such thing as a secret conspracy of JP Morgan, the lizard people and the Joos, right?

2. I'm frightened about silver, actually. I was talkig to a guy at work today who's "one of the herd". He's gotten into buying silver. Coins. Online. From some website. On a tip. From his eye doctor. Therefore, I'm wondering to what extent I should now put a fork in it.

Monday, November 21, 2011

Wanna read something bullish?

Follow the link to read Jeffrey Saut from Raymond James.

deadly deals

XG at under $8 now. FR under $15. Wow, the deals just keep on comin'!

dive! dive!

OK, maybe GT's bearish read was right.

Then again, as Rithltz notes, the superduperfriendscommittee failing to reach an agreement means the US debt problem is solved with the expiration of the Bush tax cuts. And Europe still is expected to print money. And Thailand is digging out from the floods. And whatever else is supposed to be the source of all this doom.

Buy some GOZ at under 90 cents today. Also buy some BTO at $3.30 today. They both make this thing called "gold", which I hear is all the rage with the kids in China. Actually, also go buy some REG at under 70 cents today because that's the lowest it's ever been and people are just puking their shares into the market here.

$HUI is just clinging beneath the EMA(250). Any move lower, and RSI(8) will be below 30 and that's the signal to buy if you didn't rush in like me.

Sunday, November 20, 2011

GT's bearish, I don't agree

GT's newsletter for this week was quite heavily bearish, it seems. Of course, I have a hard time following him sometimes... but every single chart he printed looked, to me, to be making a very bearish case indeed - 2008-style bearish in fact. Or even worse.

Things might change, and maybe he's just bearish in the long view (i.e. the next few months or years) while not committing in the short (days or weeks) timescale.

But personally I'm kinda bullish right now - especially with the gold stocks. Look at it this way: $HUI had a really really brutal dump in September, with 2 major gap-downs. These were the first gap-downs I've seen since I started following the miners (not very long ago). These gap-downs came on major Ag/Cu liquidations in the physical market - possibly by Paulson, maybe by Chinese shadow-bankers, hey maybe even by MF Global anyone think of that?

Beginning of October, the $HUI retraced to 550 - and then puked down again. Again, that late October dump to intraday 500 was insane, and I remember saying something to that effect when it happened.

Then we hit 600. So it wasn't the apocalypse after all. So people who were owning the gold miners this year have dumped the shares and fled for no good reason - all in the past 2 months. So a lot of weak hands are out.

Now we might get a period over the next few months where even the strong hands want to get out - and that will mean a collapse in the miners. But right now, $HUI is standing at the support level of the mid-October rebound between crashes. SIL (silver miners ETF) and COPX (copper miners ETF) are also standing at that same mid-October peak area.

If it's the horizontal support that matters, then we should be okay, no? After all, how many more people are there who want to puke shares into thin bids on bad days? Aren't they all gone now? Individual stocks might get clobbered - like, say, anything that you've recently seen popping 40% on a weekend reccie - but I don't see why the whole miners field should collapse right now.

Unless Europe purposefully implodes. And the word is purposefully - cos they know how they can fix things if they want things fixed. EFSF prints money, and loans it to the IMF who then buy enough PIIGS bonds to burn the shorts just enough to kill the short-sovereign play. (And if you don't think this would work, look how Switzerland killed the long-CHF trade with one big nasty thud. When a government hits hard enough, the traders realize they'd better not try to fight policy.)

Or unless China implodes. Might happen, just not now. Too early. Still putting my faith in the Chinese Communist Party here.

Or unless the US Super-Friends Committee flames out... um, actually, they're guaranteed to cut spending anyway, even if they fail. So, who cares about the flame-out?

I'm sorry, I'm looking around, and I'm failing to see any billowing cloud of doom. Even the Euro sovereign bond thing might just be an unwelcome side-effect of new Basel rules and banks having to de-leverage.

(Hey: does Rosenberg ever say anything about how de-leveraging means a collapse in sovereign bonds? Because when you de-leverage, the bonds are the first to get destroyed, as we're seeing in Europe. I wonder.)

And the thing about GT's charts is, everything that he prints has already been input into the algos governing a swarm of HAL 9000s on a server farm in Teaneck that pennyflips the market for $1T per day.

What I'm saying is, everyone is already seeing those charts, and maybe that's why they're all puking all the time?

Everyone out there seems so very certain that we're in the midst of the next 2008. If you believe at all in contrarian investing, then almost by definition it's impossible that we're in the middle of the next crash.

I don't know which way I'm leaning - but until I see Barry Ritholtz go net short the universe I'm going to stick with staying in the market and trying to make money. (Ritholtz is long right now, last I checked.) And as GT says, $HUI's important support is 550... I'm 100% long since 560-570 and I think up is more likely than down from here.

Feel free to use my opinion as the "sucker position". After all I'm just an average guy, and we're the ones who are supposed to lose money, right?

Friday, November 18, 2011

Occupy Toronto, yet another rant

For those who enjoyed my last Occupy Toronto rant....

Seems tomorrow they're going to have an anti-Rob Ford march.

Leaving aside the question of whether Rob Ford is an utter cunt (addressed fairly well in the Wikipedia article linked above, apparently), the idea of an anti-Rob Ford march is a bit funny.

After all, the "Occupy..." movement is supposed to represent "the 99%" - as opposed to, y'know, York University communist grad students, Palestine supporters, Mohawks, and members of CUPE.

It seems to me that a large portion of "the 99%" actually voted for Ford, since he has been elected the mayor of Toronto.

Yet more proof that the "Occupy" movement has been co-opted in Toronto by leftie pinkos with none of my interests at heart.

As I maybe haven't made clear enough before, I'd love to join the 99% movement, but it seems there's nobody in Toronto actually representing it.

Guyana Goldfields and a missed op

Here I was staring at GUY today, thinking "hm... $8.15's maybe a nice price to get in... not much downside."

Decided not to, and then bam 5 minutes later the news comes that they've received their mining license and now it's $8.60 or something.

all of a sudden, silver shoots up 3%

All of a sudden, silver's up 3% from yesterday's close. Which, yes, is still down 3% from Wednesday's close. But here I was, screaming at the top of my lungs that $HUI didn't deserve to gap down this week so hard like it did in September, because we didn't have the same reason for a hard-down.

I dunno what'll make the RSI(8) print sub-30... but 550 looks like a good place to start getting back into the market, if you're more disciplined than me and still have a pile of cash.

Friday videos, your dad was cooler than you edition

Hey! Since it's the 1970s all over again, with the rise of world fascism and commodity hyperinflation and all, I decided to give you some Crass today.

With spanish subtitles even?

premarket sitrep - and the rise of fascism by the way

ECB visibly bought some Italian debt apparently.

Some guy named Rajoy (Rah! Joy!) is seen winning the Spanish election, where he will happily serve the international banking cartel by crushing the populace with further "austerity".

Silver's up, gold's sorta up, Eurozone is uppish, futures semi-upwise.

In other news....

Oh yeah, Fascists/Neo-Nazis make up a portion of the new Greek "Technocrat" government. Not just any Fascists, but ones who deign to beat people's heads in with hammers. That's the country which, by the way, despite being "bankrupt", just got a $300M "loan" from the US to buy 400 refurbished M1A1 tanks... uh, in case they... what, declare war on Turkey? Uh... need to defend their borders against... uh, Albanian incursions? Oh - yes, in case they need to slaughter their populace.

And there's proof that the New York Times was embedded with the NYPD prior to and during the OWS raids. Uh... which were co-ordinated with other raids across the country by the Heimat Securitätsbüro. Because obviously demonstrations are "terrorism".

Stock up your guns and ammo, stock up on your first aid and food, cos maybe we're in the 1920s again and we're going to have to fight the second rise of Fascism.