Gold's overbought and Gold Stocks are undervalued

Although I wish I had been holding more gold etf's (PHYS and GTU, not the GLD scam) in the last couple of months, I am still scraping along and beating the market by 6%.  Probably nothing to brag about considering how crappy the market is these days (Dow, S&P, and NAZ), but I'm still beating it.  Down about 3% this year, but I am coming on strong lately.

I have to believe that the play here is to invest in the miners right now rather than gold.  Although I do have my favorite juniors that I am playing (by the way EAS.V, BYV.V, and SSP.V are very oversold right now, and are looking good Billy Ray!), I am sticking with GDX, GDXJ, and SIL lately.  By buying these it helps keep the transaction costs down in the trading accounts.

GDXJ and SIL probably hold more upside potential than GDX, but also carry more risk.  Here's some charts on the oversold juniors I mentioned above.

EAS.V - Positive Divergence on MACD - New low has not resulted in a lower MACD.  Typically this signals a change of direction.

BYV.V - This stock has filled that massive gap from June and is ready to start rallying again.  Miner is next to a large deposit, and will hopefully get a buyout offer at some point.  They just keep drilling and finding more gold.

SSP.V - Looks like a triple bottom to me.  MACD looking to cross to the upside very soon.

Once again, if you are looking to get back into the PM's, I'd be a buyer of silver stocks or gold stocks at this point.  The ratios suggest that these hold a better entry point than gold or silver at this point.

A few other quick thoughts.  Has anyone noticed what the dollar has not done during this market meltdown? It has not rallied like it did in 2008.  In 2008, treasuries and the dollar were the safe havens.  This time, it's been treasuries and gold.  Silver to a lesser extent, but it looks like silver may be making a move back towards the $50 high in the next week to 2 weeks. 

I mean with the Euro soon to be going down the drain, the dollar can't even rally in a market crisis?  That can't be good for the dollar.  Hoping gold and silver stocks won't crash like in 2008, but you need to watch closely and take profits when they present themselves.

First goal - beating the market in 2011. So far so good.
Second goal - positive return.  Working on it, and hope to be there soon.
Third goal - Don't lose capital in massive downdrafts.  Good so far, but be vigilant.

Until the next time...

Fiat Doubter

Janus - The two faces of the current PM situation

Well,

Did you miss the current run up in the precious metals?  Oooh, let's take a look shall we?

Looks like the bottom may have been in late June, and now the technicals are getting a bit stretched, and as an investor, you are not looking at an optimum time to buy as your risk of losing if you enter here is much higher than 2 weeks ago.  If you buy correctly, you can eliminate a great deal of risk of losing your principal.

However let's examine the other side of the coin shall we?  Not only should you look at the daily charts when doing tech analysis to determine low risk entry points, but also the weekly charts, especially when you are dealing with a long-term trend.

So, here goes.

Well, if you like to look at the weekly charts, you've barely missed a thing.  And honestly, that's probably where you need to add your core positions, on the weekly charts.  It's OK to trade on the daily charts, but core additions are what's going to make you real money in this PM bull market.

Note the arrows at the bottom where MACD has crossed to the positive.  There were nice run-ups on the two prior crosses, and I have a feeling that this time is going to be no exception.  Also, note that this MACD dip made it below the zero line, as the prior 2 did not.

So, if you are adding to your core, buy some positions on Monday.  If you are adding to trading positions, wait for a better opportunity.

On a personal note, I am beating the GDX and SIL indexes (50/50 weighting) this year by 3%.  If I was a hedge fund manager, I'd be rolling in the dough charging my client fees for that outperformance.  I attribute my success to technical analysis, and buying at low-risk opportunities and hedging when things have looked wildly overbought.  Can this strategy backfire on me?  Sure, but for now it has been working like a charm.

I'm back in the markets (PM's mostly), and I am about 85% invested.  Always a good idea to keep some cash around to scoop up any short-term opportunities in wildly oversold stocks that have great fundamentals.

Until the next time...

Fiat Doubter 

Looks like meat is back on the menu boys!

OK,

The summer consolidation for the miners is over.  Looks like it ended a little earlier than usual this summer.

Gold is back near its highs, and GDX and GDXJ and many of the junior miners are showing fan-freak-ing-tastic inverted head and shoulder formations, and are trading at a discount based on the fact that most will need to appreciate 20-30% to get back to there May highs.

The euro is imploding, and gold has busted through the old high as priced in Euros and Pounds.  The only reason the dollar will rally over the next couple of months is that the Euro is in serious trouble with the oinkers, and the world will deem the Euro the most worthless piece of toilet paper in grand scheme of worldly toilet paper.

So buy, get back in there and buy, I tell you.

Until the next time...

Fiat Doubter

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

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

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

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

I've been living in a box... in a cardboard box.

Awful song, but a great set up for this gold explorer.

This miner is in the great state of Alaska, located very close to Faribanks. They are sitting on 10.6 Million ounces of gold in the M&I category and another 2.7 Million in the Inferred category.  If put into production, according to the most recent Prelim Assessment, it would have a mine life of approximately 13 years and a production of 833K ounces per year.  Hmm, at current prices around $1500 or so, that's around 1.25 billion a year.  Not too shabby. 

Fully diluted the company has about 91 million shares (good tight structure), and at $1,500 gold has an IRR of 54.4% and a NPV of of 4.9 billion dollars. 

The company has been drilling on the property since 2006, and is currently operating a 55,000 drill program for 2011.  The deposit remains open to expansion, thus the agressive drill program for 2011.  If you find more gold, the economics just get better.

Here's the chart:

The company is International Tower Hill Mines LTD, and has a good chart.

Stock has been in this range since November of last year.  It seems to trade between 7.80 and 10.50.  From here, you could squeeze out a nice 27% gain from here if it makes it back to the top.  Looking at the candlesticks you can see an excellent hammer this last thursday.  That's when I added this stock to my portfolio.  I've traded in and out of this stock for the last couple of years.

Here's the link to the website where you can access the latest presentation and fact sheet:

http://www.ithmines.com/investors/corporate_marketing/

As always, do your own due dilligence.

FD: I am long this stock and haven't been paid by anyone to promote it. 

Until the next time...

Fiat Doubter

Where the hell have I been?

Buried under the burdens of the working man, that's where.

Short post as I need to get the creative juices flowing again, and purge myself of the latest silver market crash. 

How have I done?  The reason I am sharing this is that one of my main purposes of writing this blog was to share, or force myself to write about my investing shortcomings, or share my experiences.

Short answer, I've done OK. 

Longer answer, I did it through lightening up on my PM portfolio and buying put options on SLV and SIL during the Mad Hatter's crazy ride down to 37 or so.  I subsequently have entered into many PM positions in the last week or so as I believe this market is oversold, and the belief that we are still in a long-term bull market in gold and silver.

Did I lose money, sure.  But a lot less that I would have if I had just bent over and took it up the you know where.  These big banks know how to move silver fast, and an asset always loses money faster than you gain it. 

My suspicion is that the dollar rolls over in the next couple of days, and we will get another shot at 1575 to 1600 for gold, before we have the D wave correction which takes us back to the 1200 level or so.

So, my plan is to get about 80% invested again for this mini-jump back to test new highs, and then liquidate back to 40%, and hedge with some put options again.  I think once August gets here, we'll be headed back up with the official, or unofficial announcement or discovery of QEIII.  Seriously, who is going to buy our debt, when the US must issue about $3 trillion (or more) in the next year.  Remember, you have new debt, and the rollover of maturing debt to deal with.

I'll do some charts another night, but I will say this:  If you have cash, now would be a good time to start nibbling on quality gold and silver stocks.  The next week should be somewhat forthcoming in determining if we are to see a new rally in the PM market for the next 2-4 weeks.

Until the next time...

Fiat Doubter

Great Panther - Need a new strategy!

Great Panther - I had great hopes as of late, but alas.  It looks tired, and silver may be in the midst of a nice correction as well.

Here's the chart:

As I have noted in the chart.  It appears that our asymetrical triangle has reached its end, and has decided to hand those who bought within the triangle a nice loss so far.

Don't give up hope, as I think all is not lost.  Another intresting characteristic is the MACD indicator.  It's getting pretty low, or oversold as it was at the end of January.  You can see what happened at that point.  The indicator turned up and the stock had a nice run from around $1.80 to close to $5.00.  So, I think it's possibly getting ready to turn soon.

I would set up a buy order between 2.90 and 3.00.  If you get filled, it will be at a low-risk point, with more upside than downside.

If you're a trader, I'd look to sell around the $4.00 point.  If you are a buy and hold thru this bull PM market, then it would be a nice place to establish a position.

Until the next time...

Fiat Doubter

Why this could be nothing short of MONUMENTal!

It's Good Friday, and I thought I would try to share something good with you.  I was thinking of profiling one stock, but have had another pop up on my radar via other methods.  You see, I look at a lot of juniors.  Some I get from news releases, some I get from charts, some from publications, and some from "other" sources.  Consider this an "other" source.  It's not insider trading info, so don't worry about that.  I keep my ear to the ground....and sometimes I do hear "rumblings".  I heard a rumbling earlier today which lead me on my somewhat wild goosechase.  Granted, it took me awhile to find it, but I do think I've discovered something...MONUMENTal.

My new suggestion (as they are all just suggestions for you to further investigate) is a junior gold producer.  Yeah, that's right, I said producer.  They are pouring the dore as I type.  Although it's 11 pm here, it's all the way around the world, so it's probably daytime where the mine is.  They started out small, and have produced 1,400 ounces in their first Q of operation, 4,100 in their second Q of operation, 8,200 in their 3rd Q of operation....and finally 11,348 in the last Q of published results with a total cash cost of....wait for it....$265 an ounce.  So, not a huge amount produced, but not a real large cash cost per ounce either.  And get this.  They actually have earnings.  Net income was $5.4 million and EPS was 3 cents per share.

Drum roll please..........not yet.  You didn't say the magic word.

Here's a press release talking about future increases in production.  Read it and don't be lazy.

Production Increase Planned

Having successfully reached commercial production with its 400,000 tonne per annum gold treatment plant and building cash reserves, the Company will commence construction of its planned Phase III expansion to lift the gold treatment plant capacity to 1,000,000 tonne per annum.

This 250% expansion in production capacity will be funded from current cash reserves, is expected to cost less than C$8,000,000 and will result in a projected pay-back of 3 months from operating cash flow. The expansion is scheduled to reach practical completion by the end of calendar year 2011 and be in full operation by April 2012. 

There will be some disruption to the present operations during construction and commissioning of the new equipment, however the Company projects gold production will remain at 40,000 ounces of gold for year ended 30^th June 2011 and increase to no less than 50,000 ounces per year for the year ending 30^th June 2012. The company will make further announcement on the projected gold production targets from June, 2012 onwards pending plant commissioning and the 2011 exploration program resulting in a new reserve and resource statement.

The development and construction of the current mine and processing facility has shown the Company has built the capability to design, permit and construct low cost and efficient treatment facilities. This owner capability will be utilized to project manage the Phase III expansion.

General Manager, Kevin Wright who oversaw the construction of the existing mine and mill stated "this plant will not only provide an increase in production capability and operating efficiency but will also provide necessary operating flexibility for processing blended feed as the operations mature. Extensions to the ore zones identified by our exploration efforts along strike and down dip are likely to produce an increase in variability of ore types and our in-house design team has taken this into account".

How bout we do the chart next?  Why not?

As you can tell by the chart it's Monument Mining.

They are a miner who operates in Malaysia and their costs are extremely low.  When you have cash cost per ounce of less than 300 and gold is selling for around 1,500, that's pretty good cash flow.  You can fund a lot of exploration, pay down any debt, etc...

The one stinker on their FS that I did find was that they do have a gold forward in place where they have hedged 5000 ounces of gold to be delivered at a price of $1,000 an ounce.  If you look at their income statement, you will see that they lost almost $4 million on this thing in the last quarter.  Meaning, they could have had earnings of close to 10 million without it.  Something to keep an eye on.

Looking at earnings though, let's say the earn 3 cents a share each quarter for a year, then annual earnings around 12 cents a year, so PE of only around 4 at current prices. 

You can see though that they are adding another milling circuit in order to increase production in 2013 to between 70K and 100k gold ounces.  This year's projection around 40 K, next year 50K, and the following year 70-100k.

Two things I really like are the low cost per ounce and the fact that they got this mine up and running in a short period of time. 

Here's the links to the current presentation:  http://www.monumentmining.com/main/?en&corporatepresentation

And the most recent MD&A that has selected FS date:  http://www.monumentmining.com/main/?en&financialStatements  To get the full FS, go to SEDAR.com. 

I have a suspicion that volume could be somewhat heavier on Monday or Tuesday as I will be buying!

FD:  I have no shares in Monumental Mining (but plan on buying on Monday), and I have not been paid by any parties for writing this article.

Now for my own shameless plea:  If you like anything I have written, please forward my website to a friend (or enemy) who likes this sector, and enjoys a good read.  I only make a very small amount of $ from people clicking on ads on my website.  I have made a whopping $10 so far.  I'm not complaining, but if you break that down in terms of cents per word...I make very little.  I only buy beer with this money as to help me stay up late and write articles.  More than getting piddly money, I really enjoy seeing the counter go up on my blog, so share with a friend, put a link on your facebook page, etc...  Done with my mini-plea.

Until the next time...

Fiat Doubter

All of my posts can be viewed at www.beforeitsnews.com as well as on my website.

Do the monkey yeah yeah! (APE.V Related)

Story out today about the Bolivian mine nationalization program.  Snatching the assets from companies may have hit a snag per this story.

http://online.wsj.com/article/SB10001424052748704570704576275042085055636.html?mod=googlenews_wsj

So, what's up with my APE.V pick?  Well, you can imagine.  Here's the daily chart today.

So, if you're feeling lucky punk....well are you?  Then get back in, but know that this issue may not be over yet per the article.  It's always political, isn't it.

For all those who recognize the title, here's the music.

http://www.youtube.com/watch?v=-02YnMmE-Ko

Until the next time....

Fiat Doubter

This guy irks me

Bob Moriarty runs a website called 321gold.  All in all, it's a good site.  However, I think he uses his sight to pump his own portfolio far too often.  Unlike me, he has a real following that act on his advice, and thus really affects the share price.

He posted the following a ways back in response to a small time blogger who wanted Bob to post his article to his website.  The article is below:

The date of it is March 25th almost 4 weeks ago.

Bob MoriartyArchives
Mar 25, 2011
Price is always right. Opinions are often wrong. I’d love to take credit for being the first to say that but I’m not.
I wrote recently about silver getting toppy and said that when I saw a temporary top I’d say so.
So. It’s a temporary top. Silver has doubled since late August. It’s gone up about 45% since a small correction at the end of January and all sorts of pundits are claiming that silver is moving from weak hands into strong hands. Silver was up today for the 7th day in a row before collapsing and causing an outside day.
We may have a couple more days of rises but this market is getting pretty tired.
People who bought silver at $4 an ounce or $5 or $6, those are strong hands. Those are the strongest of strong hands. Every person selling silver today as it went through $38 sold at a profit. The strong hands sold into the weakest of weak hands. It’s weak hands buying right now, the guys who made fun of people buying $4 silver.
Ignore the news; silver has no more to do with Portugal and their financial problems or nuclear melt down in Japan than it has to do with the price of kitty litter. Guys reading the news know nothing about commodities or silver. Hell, half the silver bugs don’t know anything about silver, it’s the most over rated investment in the universe right now.
If silver goes up and a black lady won Miss America, the newsreaders say silver went up because a black lady won Miss America. If silver went up and a bullfrog won Miss America, they would dutifully write that silver went up because a bullfrog won Miss America.
Commodites go up and down in a far more random manner than anyone wants to admit. The last time I called a top, I was off by three days and almost $40 in gold. That’s close enough for government work. I might be off by a couple of days in silver and maybe a couple of bucks but I see way too much bullishness.
The next major move in silver is down. A lot more than the silver bulls want to face. When silver permabulls throw in the towel and give up, I’ll be a buyer again.

Mar 24, 2011###Bob MoriartyPresident: 321goldArchives

So, just want to point out that 4 weeks after this self-proclaimed expert called a top, "within a couple of days", he said, silver is still going up.  Has there been a retraction on his website to call himself out?  Of course not.  Eventually silver is going to correct, but it wasn't when he predicted.

My advice for all the experts out there - you don't know jack.  You're just guessing like the rest of us.  It's not the fact that he is wrong that bothers me so much, but rather the way that he said it.  We are all fallable, and the minute you forget that, is the minute you make a fool of yourself. 

Until the next time...

Fiat Doubter

Just like Craps - Rolling 6 the hard way

The gold and silver market are just a little....crazy lately.  Silver is grossly overbought, once again, and gold is making it's way there as well.  The really weird think about this is the non-confmation in all of the silver and gold stocks.  This really reminds me of a good craps game.  Sometimes things are going your way, and you can even roll the 6's the hard way, and they just keep coming.  There's no logic, you think it shouldn't happen again, and there it goes again.  "Six the hard way!"  Pay the man.

Gold chart lately:

Not too extended over the 50 MDA, but it's getting there.  Note that gold has been consolidating its gain's for the last 6 months, so I can't say that a breakout is too surprising here.

Now for silver, the shiny little brother of the PM family.

Silver has been on a mission lately.  Notice the moderate correction in January and the mini correction in mid-March.  That's been about it lately.

Now food for thought.  Runaway moves defy logic, and ignore technical indicators.  So, if gold and silver start the vertical climb due to rapid dollar devaluation, or some other unforeseen world event, we could be riding a real wild stallion until mid-May or so.  I still plan on exiting most of my PM positions in May, and getting back in the game around August.

I think the real head-scratcher is the non-confirmation of the gold and silver stocks.  Let's use the GDX for gold stocks and SIL for silver stocks. 

GDX

I would have hoped to see GDX take off yesterday, but it did seem to have a good showing today.  Let's see if this support holds

And for SIL.

Looks very similar to GDX.  However, as Silver is outperforming gold right now, I would have hoped to see SIL take off already.

So, the less risky of the two options here is probably the GDX play.  I just feel that Silver is more likely to correct a lot sharper than gold at this point.

I'm still pretty well stocked up on gold and silver stocks at the moment, so I am hoping for some better action out of them tomorrow.  I may have a nice gold junior to talk about tomorrow.  It's got a great looking chart for an entry buy, and it actually has gold reserves as it is just adjacent to a another gold play with a lot of resource ounces.  Nothing like being next to a biggin!!

Until the next time...

Fiat Doubter

Fat Bottom Girls?

Close.  How about some double bottom (girls)?  I like this stock as it is in mine friendly USA (as opposed to Bolivia lately) and is a major silver producer at a negative cost per ounce.

Who can it be now?  Sorry, can't stop the musical references.

Hecla Mining of course, or HL.

Now, don't get me wrong, it's good silver major producer, but I got that annual report today, and the EPS from 2009 to 2010 actually shrank.  How you can do that in today's market of rising silver prices is beyond me.  But, I'm not a fundamentalist, I'm a technician.  What I see today is a double bottom, and a possible short term gain should the formation come to fruition.  However, they do have some issues with the EPA that came to light in the last quarterly report.  Do you own DD.

Here it is:

Play at your own risk, but I just bought HL June 6 calls today.  Hoping to exit the trade when HL hits 11 for a nice gain.  I'll let you know how it turns out.

Some music while you think about it.

This was the least controversial video I could find.

http://www.youtube.com/watch?v=kEbEMjKitA4&feature=related

Until the next time...

Fiat Doubter

Interesting Patterns

Just some quick charts for everyone.

First, my two silver studs for the duration of this silver market.  If you like silver stocks, these are my favorite 2.

SVM

And now for SLW

And GPL, Great Panther, a nice junior silver miner.

So, you may want to nibble at some silver positions.  I am still expecting a rise into May, and then a summer correction or consolidation.

Until the next time...

Fiat Doubter

Don't go APE for APE.V

Sorry to anyone who bought APE.V.  Out today is the story that Bolivia may nationalize their silver mines.  See link to story at zero hedge.

http://www.zerohedge.com/article/will-silver-surge-following-nationalization-bolivias-silver-mines-president-evo-morales

If you own it, I'd sell it.  Also, CDE getting hit hard by the news as one of their mines (San Bartolome) is in Bolivia as well.  PAAS, same story.

Don't think I'm not paying the price on this as well.  I bought this stock via TD Ameritrade about 3 weeks ago.  As they underwent a name change (defined as a corporate action), the stock transfer agent has not yet delivered the shares to my account, and I am stuck holding this until the matter is cleared up, i.e.the new stock certs are delivered.  I can't sell even if I wanted to.  What a killer!

On the other hand, all of the other silver stocks fairing much better today.  As mentioned in the above article, I think the silver market is nervous as to reduced production which would squeeze an already tight physical silver market.

Until the next time...

Fiat Doubter

Thar She Blows!

OK, I may have been a little off in my 4-7 day projection for a rest for the metals.  Coming on like gangbusters today. 

Gold and silver are busting higher today and dollar is headed to the toilet, again.  I've started to buy back some of my positions I sold on Monday this week.  Got to be quick in this market.  I am going to wait and see if the metals open higher tomorrow after today's fantastic close.  If they are showing good strength, I will load up to my full allocation again.

It's hard to trade this market, but I am doing the best I can right now.

Charts on the next update.

Until the next time...

Fiat Doubter.

You people are all about the stocks!!!

Just checking my blogger posts, and I see that most of the recs that I put out there are well read.  That's good, and honestly I enjoy that you are reading those posts, but there is more to just buying junior resource stocks.  It's also about selling at the right time!!

Remember, we are surfing the wave out there, and right now the Gold and Silver wave are crashing down from their highs.  You don't want to be getting the crap kicked out of you right now buy buying everything in sight.  I think gold and silver will be correcting for about the next 4 - 7 days, but after that they should be up for a nice rally into the May timeframe.  After that, it's the summertime blues for the PM's, and I intend to sit it out from end of May to mid August.

See the gold and silver charts.  Look how MACD, Williams, and Stochastics are all rolling over.  It's riskier to buy here or hold here, than selling.

Quick question for anyone out there.  What's the symbol for gold and silver on freestockcharts? Anyone know.  On stockcharts it's $gold and $silver, but can't find them for this charting software.  In any case, if anyone knows, just leave me a message in the comments section.

I may try and do some timing on some individual juniors or play some options on some of the bigger gold and silver names during the lull, but only if I see bargains that merit a short-term play.  Let me tell you, I have gotten burned during this Precious Metals run for the last 10 years.  I got absolutely slaughtered in the 2008 wreck, but I imagine most people did who were heavy into the metals.  Thank the good Lord that I held on, and recovered quite nicely during 2009.  It was a gut wrenching time.

So, I am trying to be smarter about timing some of these moves.  On Monday, I sold a lot of my positions.  Honestly, I looked at the stocks and the metals on Monday morning, and they were not acting correctly.  Silver was pushing $42, but the stocks weren't along for the ride.  So, I started selling most of my PM positions, and have avoided the 10% haircut I would have taken if I had held on to everything.  The trick now for me, is to get back in if I think we are still headed up for the month of May.  And I do believe that is the case.  I played my instincts earlier this week (see my last post about selling SQI.V and SPM.TO), and now I have to play the re-entry smart as well. 

So, even though you may not enjoy reading my other posts, I do recommend you pay attention to them as well.  At least skim them.

So, at this point, you might want to put in some buy orders another 5-10% below current prices, but I wouldn't be buying hand over fist yet.  Big picture, give the metals another 4-7 days, and I think they'll be ready to take out the old highs sometime in May.

To all those that took a a$$ kickin over the last couple of days, my regards.  I have been there all too often.  I got lucky this time, but I still have to re-enter.  That's just as tricky.

Until the next time...

Fiat Doubter