Friday, January 20, 2012

Friday video - set the controls for the heart of the sun

Always a great song to cover. My personal favourite was when I was subbing on bass in a shoegaze band in 1993, and I laid down the lead on bass Peter Hook style, bitch, 4 strings at once yo.

This version is by Pink Floyd from Live at Pompeii, so it's also pretty good.

Apparently the Cure used to do it during soundcheck.

Well, what a difference a day makes.

I had enough guts yesterday before the closing bell to buy ZJG (junior gold ETF from BMO, wide bid-ask spread and all) and HGU (gold miners double up). Those moves look good today. I think $HUI hit bottom.

And today silver shoots up 3%. Wonder how much of that was a lunchtime mini-bubble? We'll see. In anticipation of it being a for-real advance in silver, and Gary T's long-awaited GLD:SLV breakdown, I grabbed $20K in FVI. Was thinking about MAG as well, but I have no capital left to deploy.

Grabbed $6K worth of GT's AMM - I doubt its advance will continue, the volume today has been pathetic, but at least on a day when everyone looks happy it could be a turn-around for the price. I'll stop out if it goes back down.

BTO also moved up on what seems to me to have been inconsequential drillbit news. Oh well - again, at least it moved for once, so maybe now people are paying attention, and they'll probably begin asking why a company with 2 perfectly good gold mines is trading way down there. Again, it counts as a breakout above the EMA(8), I think, and that's something.

AQM is up on crazy hit-the-ask buying - again, not enough volume to make me think anything serious has just happened, just a one-day convergence of fat fingers. An advance on a viciously beaten-up pennycrapper, any pennycrapper, is enough to make you feel great (just ask Otto who's seen his VEM fly up 50% in the past couple days on news that they may actually mine zinc soon). I personally took 1/3 off the table in AQM; that was an $1800 profit that I desperately needed after this week. I might try to paint the tape down at the end of the day just to give Otto something to talk about.

Oh, also grabbed some Sabina. It's been locked in dead money land for months, positively months; but seeing MAG and FVI's action today, I figured maybe SBB would be the late bloomer in that crowd. We'll see; small position, don't care too much.

We might be out of the woods.

Sorry if I just jinxed everything.

US treasuries are dropping. $VIX's RSI is at the level where you'd expect to see a bit of an up-pop. Basically I think we're in need of a day or two of market drop. Maybe cashing up for the weeken is a good idea?

Now, to be fair....

To be fair, maybe the drop in $HUI isn't entirely because Harmony, Hecla and Kinross suck.

After all, the drop in Kinross can also be said to illustrate the still-difficult capital environment, as well as the problems miners are facing with cost escalation: after all Kinross is holding back Tasiast cos they really want to find a way to build it cheaper. Hecla obviously refamiliarizes people with the physical/engineering danger in mining: stopes with rock blowouts where people actually die. Harmony, I still dunno what's up with them.

So maybe people want to sell $HUI, and miners generally, because they feel the miners are legitimately running into problems making a profit, due to cost overruns, the difficulty in bringing new deposits online, and so on?

Um... but that doesn't explain why silver miners and copper miners are still going up. So...

Thursday, January 19, 2012

Here are some $HUI components who don't suck

Yamana Gold is barely hanging on to its EMA(8). Uptrend intact. 5% of the $HUI.

Anglogold Ashanti is also hanging on. 4.88% of the $HUI.

Randgold looks okay. 4.71% of the $HUI.

Coeur d'Alene also looks quite fine. 5.11% of the $HUI.

Anyone clever out there who can explain to me why those 4 stocks are going up, yet Kinross Harmony and Hecla have collapsed?

John Ng on why Kinross sucks

Analyst John Ng was on BNN explaining why Kinross sucks. Have a gander!

Remember, K is 3.85% of the $HUI.

Tye Burt on why Kinross sucks

Tye Burt was on BNN a couple days ago during the utter collapse of his company's price to 2005 levels. Go watch him explain why he shouldn't be replaced by his Guatemalan poolboy.

And while you watch this, keep in mind that his company's stock is down 44% since last September, and down about 28% in just the past week. So whatever he says, y'know, frame it in the context of his stock price sucking.

Here's why HUI took a tumble these past few days

Here's 3 components of the $HUI for you:

Kinross puked on Tuesday. Harmony puked today. Hecla puked last week.

If Gary T has no clue why the $HUI should be collapsing - especially when the juniors and silver miners and base metals miners are doing so well - that confuses me. I'm inspired to look for a solution.

Was, um, there any news?

Faruqi & Faruqi is investigating Hecla for potential securities fraud. Oh and they had to restate their production down significantly. All because their Lucky Friday mine assploded.

Kinross has apparently owned up, on BNN, that Tasiast is going to cost a fortune to build, and they don't have any money, despite mining gold for a living - perhaps they blew it all on hookers and blackjack.

Still haven't figured out why Harmony dove today. Probably will find out soon nuff.

So, truly, yes; the major gold miners really do honestly suck, and you could really make their share price performance a lot better just by replacing management with their Guatemalan poolboys. Or their Moldovan mistresses even.

Anyway... the poor performance of those 3 stocks above might be what's driving the $HUI down so bad. As in, look at your charts, see the non-confirmation with GDXJ and GLDX.

PS: I'd laugh if this bullshit was enough to start up a new movement to create a new "Gold bugs index", but only made up of companies that don't suck with managers that aren't morons.

Mickey Fulp on Uranium

I've been saying "what the heck's up with uranium". Cos uranium's up recently, and we don't normally see that.

Mickey Fulp has his own interpretation. Here he is on Korelin.

What a conundrum! Stocks are going up!!!

The bluggersphere is all abuzz about the markets going up, when obviously they're supposed to be going down or something.

Maybe this is why:

If you don't get it, go pay USD$288/year for Gary Tanashian's newsletter, and after a year or two of scratching your head like me, maybe you'll start to get it.

Hint: yields go up equities go up.

Or at least that's what I gather. Maybe I'm wrong.

One more word on HUI:GLD....

In fact, the last time HUI:GOLD sucked worse than this for any length of time was MARCH 2009.

I'll let that sink in. You might remember that era.

An optimist would say that things can only get better. A pessimist would reply yeah sure, if only gold miners didn't suck so bad.

message to all the gold miners

Dunno how you can spin this one....

Some anonymous angry young lad posted a comment on GT's blog about how much the miners suck, and how you could have made more money just with a buy and hold on GLD. Well, yup. Of course GT can reply that he picked AR, DPM and PVG, which have bucked the trend of suckage.

Matter of fact, a lot of miners haven't sucked. But yes, generally, perhaps the $HUI might just perform a lot better if you took all the executives from the big miners, lined them up against a wall, shot them, and then gave their jobs to their Guatemalan poolboys.

As for me, I've bought small double-longs in HKU (copper) and HBU (gold bullion). Plus a short intraday trade in HQU (Nasdaq).

I've dumped some BCM and GUY - have decided now that $5K is my limit for a pennycrap exploreco, $10K for a BCM/GUY "they really do have something in the ground" play, and $20K for a FVI/GOZ/BTO-style "they actually are digging gold and silver out of the ground you dumb fucks, why are you selling?" play.

I've set those limits so that there's money left for broader ETFs.


market comment

Have been suffering bad headcold, thus no posting.

Everything's going up today except the miners, who as you know suck.

I deleted a blog from my RSS feed this morning, for starting off a post with "Respected financial blogger Tyler Durden..." - I mean, honestly, guy! Give your head a shake!

JNK:LQD up nicely, UUP down. $HUI still dropping badly, below its EMA(8), 508.44 now, aiming for 500 or less probably. Boy do the miners suck.

In fact, go chart $HUI:GLD. Epic support is around 3.12-3.15. We're about to break through that - we're at 3.16 now. Boy do the miners suck. Wanna go tell them they suck for me? Cos really they suck.

Tuesday, January 17, 2012

morning preopen comment

DAX strongly up, Hang Seng strongly up, silver and gold up through resistance, Q and SP500 futures strongly up.

So whatever bullshit is in the news, and whatever bullshit has been beaten into your poor skull over the past few months, it's obvious the market is very happy about Greece defaulting, France & Austria downgrading, the Euro overnight facility use at all-time highs, China property values collapsing, and whatever other chickenshit supposed artefacts of doom you can dig up at ZeroHedge.

So sticking to one of my new years' resolutions, I am going to ignore the valence of the newsflow and stick with what the charts tell me. As of now, HGU.TO is going to print a (short-term) higher high at the open. That means the play is back on and I'm back in buy mode.

We'll have to see what plays are available... I don't want to buy more miners right now, since they suck (go chart HGU.TO:HBU.TO, my own version of the HUI:GOLD ratio, and see how much the miners suck). Until the ratio improves, I think I'll stick with buying gold and silver directly, as well as maybe some other risk-on plays if I can dig them up on the Canadian ETF scene.

I might sit and wait for a pullback today before buying. We'll see.

EDIT (10:56) - nope. fakeout. $HUI and HGU are weak. Staying put. Have a bad cold anyway.

Monday, January 16, 2012

eye off the ball

This is what happens when you fail to keep your eye on the ball.

Uranium has broken out.

URZ and URE have begun to look good.

But you subscribe to gold/silver mining analysts. Pity.

what happens now post

Now the reason I sold my HGU, and a few other things (half my BTO, a short profitable flip-trade on GUY) on Friday, was because of this chart. At the time, it was a red candle; we finished the day with a hammer instead. OK, that's slightly less bearish, but still.

But the EMA(8) of $HUI was pierced anyway, and that's usually not indicative of a bullish continuation as you can see in this chart. Especially not with a horizontal EMA. Plus, the fear chatter was back in the markets after the downgrades of France et al (which someone wiser than me pointed out was already baked into the bond market, just not the equities).

So where does $HUI go from here?

Here's my options, over say a 1-2 week timeframe:

1) $HUI shakes off the week's weakness and goes back upwards starting this week. If so, I'll wait for a couple strong candles - $HUI tends to print late fakeouts on its topping patterns, double tops, as this chart shows. This stalling will mean that I miss out on some short-term profits but reduce risk by doing so. This "goes back up from here" doesn't look too likely now, but we'll see how the broad equity market acts today (plus JNK:LQD and GLD:SLV and $VIX and UUP) and look for clues there.

2) $HUI goes down, but prints a higher low from which it launches upward. Sort of like what you see in October on the chart. Look at the similarity in the RSI(8), now and then. I'd expect that right now. Slight dose of fear drives things down a bit, maybe to 500, then people realize it ain't so bad and things resume their logical upward trend. RSI doesn't even drop to 30.

3) $HUI collapses to or below its 480-500 support. In this case you sell everything and go short, with excess cash plowed into guns and MREs. Aliens attack, Obama institutes his death panels, the Lizard People take to the air in their black helicopters. Confirmation of this move would be a strong pop in $VIX and some crazy things in the liquidity indicators.

I don't know which is going to happen yet. Oh and I guess there's also:

4) $HUI continues to go absolutely frickin' nowhere. Dead money. Stays at 510-520 for weeks or months. In this case, I also don't want to own it. Sorry, but the risk of putting money into the market greatly outweights zero return.

As for individual stocks: I still have some horribly cheap BCM just cos it seems dumb to sell it. Still own some BTO since its present price is retarded given its assets. Still some underwater GOZ, though I expect some idiots will be puking shares today despite there being nothing wrong with the company. Some underwater GUY, some 35-cent AQM that actually looks like a great buy right now (as in I'd double that already substantial position if I got a deadly deal).

And a $10K starter position in HED, the energy double short.

It doesn't look that bad, MAC is turning up though that means little, it's really only a short-term countertrend trade on a long-term bearish chart, I guess you can't expect more than $4.80, but even still it gives me a chance to play a short with a very small amount of cash, with a very close EMA so that I can stop out quickly if need be.