Tuesday, June 21, 2011

Dabbling in the silver stocks

Some of the junior and major silver stocks seem to have made a nice tradeable bottom recently.

Bought some of my favorites yesterday and today - SVM, AG, SLW.

This may reverse in a couple of days, so be ready to move once again.  As a couple of guys I really like say, "React to price movement, not what you think should happen." 

And that's it in a nutshell.  I'm thinking we should go lower, but SIL, GDX, GDXJ are all headed up in the near term to correct the vastly oversold levels. 

I'm along for the ride for at least a couple of day.  I hope you all were paying attention and are doing the same.

Until the next time...

Fiat Doubter

Tuesday, June 14, 2011

TBT I'm dynamite, cause I'm TBT and I'll win the fight!

Time for some perspective on the 20 year inverse bond fund symbol TBT.

I think that this is a great long-term buy point.  Could she hang out around this level some more?  Sure.  But as I like a good entry point on a trade, there is plenty of upside and limited downside.  So, without further ado, let's look at the chart.


























She's just broke a downtrend that has lasted a little over 2 months.  In the short-term, it has to break through 35, and then make an assault on 36, and 39.  Of course, not "if" but "when" the Fed makes QE3 public this puppy could come right back to the level it is now.  When Hanky Bernanky is buying the debt, it tends to drive the price up, and the yield down, so for an inverse bond fund, bond price up bad, bond price down good. 

If you have some dry powder, this could be a good long-term play if you believe that bonds yeilds must rise in the future due to the degradation of the US Federal debt situation.

Until the next time...

Fiat Doubter

Box or Head in a Box?

Well, we do have a heck of a head and shoulders pattern on the GDX and GDXJ recently.  Or are we in the lower end of a box (trading range)?

I guess we'll find out in the next week.  For all you who have the answer, just put it in the comments section.  Don't make me do all the work!























As Judge Smells once said,  "Well....we're waiting."

Oh, by the way, I just bought some DDM (Dow Double Bull), as the market seems to have made a nice botton within this new bear move.  You are always going to have move and counter moves.  Remember, surf the waves and you can make some money either way.  I'm just looking to come out of the next month with my capital in my hands, ready to buy PM stocks again as QE3 gets rolling sometime later this year.

Until next time...

Fiat Doubter

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

Wednesday, June 1, 2011

Put your head on my shoulder.....I think it's time to sell...baby!!

OK.

When is the best time to panic?  Let me give you a hint.  Is it just after you hit the iceberg, or 3 hours after? Well, I would have like to have gotten into a rowboat well before the Titanic split in two...at least according to the movie version.  I don't usually watch the chick flicks, but hey, it had a couple of good scenes.

Maybe I'm feeling a bit paranoid, but I just watched Inside Job, and it just makes me feel sick.  All of the perps are still out there, leading the banks, credit rating agencies, sitting on boards, university presidents, etc.... the derivatives industry doesn't need regulation.  They reduce risk.  After watching the film, (warning: geeky part coming) I get the feeling that some of these bankers are really jedi masters doing the mind trick thing.  You don't need to search us, these aren't the droids you are looking for, move along.  The derivatives markets don't need regulation, the CDS's we bought while selling crap was not a conflict of interest, Hank Paulson doesn't need to pay tax on his stock gains as he was Treasurer, the rating agency only issued opinions, the Fed Chairman could never have seen this coming, blah, blah, blah. 

What's a thousand wall street execs at the bottom of the ocean called?  A good start!!!!  Not one person in jail.  Nada.  Hell, in some communities you can be jailed for swearing in public, you know archaic rules left on municipality books.  But apparently, if you push crap down investors throats by paying off credit rating agency to rate your bundled mortgage crap as gold (Triple A Baby!), then short it behind the investors back by buying CDS's from AIG, which of course you don't have to tell the investor when you do it, and finally sell it to the FED at 100% on the dollar.  Well, that's all good.  No crime or conflict of interest.  Oh, and you can keep all your ill gotten gains in the form of you bloated paychecks and enormous bonuses and parting gifts, I mean severance pay.  Tell him what he's won Johnny!  You get to walk away with no criminal prosecution, and we'll give you $100 million as we know firing you is so hard on you.  Seriously?  Is it really a penalty that when you get fired, you get a bonus equal to 30-40 times your salary.  Hell, I'd go shit on my boss' desk tomorrow if I could get a deal like that!  Boss, if you are reading this, please disregard my last statement.

Fiat Doubter what the heck are you talking about?  Well, let's not forget who moves the markets these days.  It's all of these super bankers, and it's JP Morgan and HSBC when it comes to manipulating gold and silver.  Do you think Gary Gensler (oh, he used to work at Goldman Sucks, so is it a stretch to say that he probably still uses the corporate credit card to get blow jobs up the street at the friendly wall street brothel?) is really going to put an end to manipulation of the PM"s as head of the CFTC.  What does that stand for anyways?  I've got one.  Certain Fu**ers & Truly Cheaters?  The banks make money on volatility, so when they run it up and run it down, it's easy to get your chops busted, sell as you panic and buy as you think you are left behind.  Who supposed to police any concentrations that may move prices in the commodities markets?  CFTC.  Oh yeah, raising margins 5 times on silver on the way up to 50 isn't manipulating that commodities price at all.  Gary, you are truly asleep at the wheel.  Maybe you'll wake up when the wheels fall of the bus? Doubt it.

Throw off your shackles and trade! Trade I say!  Don't be the schmuck I've been for so many years.  Don't deny it, we've all been schmucks.  What did Albert Finney say in that movie?  Oh yeah, I'm mad as hell, and I'm not going to take it anymore!!

In that vein, I'm panicking early, before the bottom.  Head & Shoulders.  Not the shampoo, but the technical formation.  Let's get to it.

























GDX.  So, we have a potential head and shoulders on the GDX.  Neckline around 54, Giant Heed around 63, difference of 9.  Take 9 from Neckline and you get 45.  Do you want to ride this down to 45 from 57, or try and get to 63 before that?  Hmm, small upside bigger downside, I think I'll hedge with some GDX puts or liquidate some of my positions.  And that's just what I did.  I sold most of the short-term winners and some losers I had. 

Another tired reason to sell.  The summer doldrums.  The PM's usually bottom between July and August.  Not a hard fast rule, but look at a chart for the last 5 years.  If you look at the GDXJ chart, same formation.  Look at SIL, ditto.  Not as clearly defined for SLV and GLD, but the pattern is there. 

Once again, this is a reason that you need to enter stocks at a good point technically.  Have I sold all my stuff? No, because some are still oversold, but I did sell anything where I had a nice bounce recently.  So, sell or hedge using GDX, GDXJ, or SIL puts.  You can also use ZSL to short silver at 2x factor or GLL, or DUST.  Just google them and you'll get a good array of picks.

I will take opportunities to profit on either side.  Long or short.  This market isn't going to make it easy for you.  So, my bias right now is to take gold and silver profits off the table, or hedge them if you don't want to sell positions and incur realized gains or losses.

Until the next time...

Fiat Doubter