Monday, June 6, 2011

GDX - Stick and Move!

As Apollo Creed's trainer once said, "Stick and move, just stick and move.  That kid's dangerous!"  Boy, he wasn't kidding.  And so is our young phenom GDX.  He's really dangerous too lately.  He gets knocked to the mat, he gets up, gets knocked around again, but he finally wins, or at least ties in the first one anyways.  I stoppped watching after Drago.  The point I'm making today is that I think we are at the point where he gets knocked to the mat, once again.  He'll get up again, but why bet on him for the next 10-30 days or so.

First strike:  It's summertime USA.  And for the past three years all things Precious Metals have gone a little cold even though it's heating up quite nicely in the mid-west.  I won't complain as it was a long hard winter this year.  Usually the bottom has been found somewhere in July or August.

Second strike: The fed is desperate to show that things are under control.  The only thing I can picture in my mind is Kevin Bacon in Animal House in his ROTC uniform saying, "Remain calm, all is well.  Remain calm...."  And then he gets run over by the mob.  Hmm, uncanny, but I say Hanky Bernanky is doing a fair imitation of Kevin Bacon at this very moment.  Him and most of the other government stooges who put out great reports like CPI excluding food and energy.  I drove to work today, and I ate some food.  Makes perfect sense that you would want to exclude things like that.  Why don't they put out one like CPI excluding air or water?  Oh, then we all be dead, and it wouldn't really matter, now would it.  But I digress.

Third strike:  Here's the wicked chart of GDX.  U-G-L-Y you ain't got no alibi you ugly, yeah yeah  you ugly.  That's from the Wildcats movie with unknown Woody Harrelson and Wesley Snipes before they teamed up again in White Guys Can't Jump.  I'm full of bad movie quotes and trivia. 

























Not so pretty is it? I've been playing DUST lately.  It's a leveraged (2X) gold miners bear fund to try and hedge the remaining positions in my portfolio.  Been doing pretty well with this one and Put options on SIL.  I wish there were a leveraged bear silver stock fund out there, but I've only found ZSL, which is the physical silver bear fund.  Anyone know of a silver bear fund, leveraged or not?

Remember,  it's all about maintaining capital and remaining solvent in this assault on the precious metals.  Nothing goes up or down in a straight line, and that's where you can make some money on a counter-trend within a bull or bear market.  I'm still bullish LT on PM's, but I'm a growling bear for the 2-4 weeks.  The goal to winning against the bankers is understanding their rules.  They sell when you are greedy, and buy when you are fearful. That's what you have to do as well in order to win in the PM game.  Remember, PM's have a technical aspect, a fundamental aspect, and a third element to deal with, and that's the political aspect.  Most investments don't have to deal with the third one, but we do.  Right now, according to the Fed, QEII is coming to an end.  Until they admit QEIII is on the way, or someone exposes the fact that they are doing it on the sly, I think the PM's will fall here.

Until the next time...

Fiat Doubter

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