ZIP - You're welcome to perform your own market test, all you must do is park your Toyota on the street, leave the doors unlocked with the keys in the ignition.
AUMN - I'm not being prejudiced, only trying to be objective for objectivity's sake, but I see lots of charts like this one where these pinch's only resolved into what were eventually lower prices following a brief rally that appears to have been sold:
Perhaps it would help to look at money flow or something, but I wonder how much further these can sell off and if the money's going somewhere else like into the dollar, into emerging markets, or if the low volume is indicative of some form of Kabuki show...
One more tell- the 'Red Skies' post on CC. I single it out only b/c my sixth sense kicked in immediately upon reading. It's always unpredictable what nails a take on market direction for me- and right now, it's green on the screen by close.
trying to get caught up on things while the little man sleeps.
the late 1990 market is almost identical to today's. i remember looking high and low for similar markets in the past - ones that had the following:
(1) Large multi year rise after a crash (2) Substantial break of 200 DMA (at least 5% below) with a subsequent rally back above it (3) Subsequent rapid drop of 20% and a substantial drop below 200 DMA. (4) Rally, then break lower below the share drop low. (5) Rally roughly back to 200 DMA (6) 200 DMA starting to roll over.
The 1990 market and today are the only two that I could find (maybe I missed a few others??).
What happened after this in 1990 (after it tested / went near the 200 DMA) was a very sharp drop of about 6% or so over 6 days. It bounced a couple of days, then went a little lower and then the selloff was over. After that point there was a massive rally of about 25%.
Someone is panic selling XWES so I decided to buy it on the dip...bought more at $2.7. Trailing twelve month EPS is $0.17 and they projected rev growth of 50% with EPS growth of over 50% for next year. If that's the case then its trading at 10 times those earnings with earnings growth of greater than 50%. That equates to a PEG of less than 0.20.
Ten minutes to close, not exactly green across my screen. So I called it wrong. No change in my own sentiment, however.
Believe it or not, there will be another scrimmage today, in preparation for two games on Saturday- pending outcomes, up to another two games on Sunday. The little guy was invited to 'post-season' play- Peninsula teams face off in the Turkey Tournament.
In case you haven't read carefully the latest AUMN's quarterly report (November 14), here are some excerpts from it:
"Since the Company assumed management on September 2, 2011, operational improvements have included moving the underground mine development out of the veins and into the adjacent footwall structures. Although this work has decreased production of plant feed temporarily, ore head grades to the plants have improved by approximately 45% for silver and 24% for gold, with the head grades and daily feed expected to continue to increase as the mine development opens more working faces for ore extraction. Process control improvements in the oxide plant have increased silver recoveries from approximately 54% to 73%, with additional metallurgical test work and operational improvements ongoing. Process control improvements in the sulfide plant have improved lead, zinc and pyrite concentrate production and quality."
That's huge, folks! ECU was stuck with 50% silver recoveries in the oxide plant for 2 years, while AUMN increased those recoveries by 35% in 2 months AND also increased the ore grade that is fed into the plant. That means they are now producing 1.35*1.45 = 1.96 times more silver per tonne of mined ore! Finally, we have some knowledgeable people operating the Velardena mine, and they will most likely deliver on their promises! Now, about their promises:
"The Company expects production rates to increase commencing in the first quarter of 2012, and by the fourth quarter of 2012, annual production rates are estimated to be over 800,000 ounces of silver, 16,000 ounces of gold and one million pounds of combined lead and zinc."
This is exactly the same guidance they gave on September 2, and it is good to know that their close interaction with the Velardena mine since then did not change their guidance. At $50/oz silver, $2000/oz gold and $1/lb of lead/zinc in one year, their annual revenue from the Velardena will be more than $80M! So we don't need to wait for 3 years in order for AUMN to build the new 2000 tpd sulphide plant (which is supposed to produce annually 4 million ounces of silver, 80,000 ounces of gold and 10 million pounds of each lead and zinc) in order for AUMN price to shoot up -- it will most likely be 4 times higher in one year already!
From my readings this weekend, I think the German / ECB attitude is: These countries (Italy, Greece, etc) survived with high interest rates before joining the Euro. They've had the benefit of very low rates from being in the Euro and now it is time for them to make the hard changes that need to be made for them to be the type of country which deserves these low rates.
Things are changing - Greece and Italy put in budget focused governments, Spain and France passing austerity budgets and, this weekend, even Belgium is finally doing something.
It's a bit of a game of chicken, but I think Merkel and friends may actually be pleased with the way things are playing out.
You'd like to think "professional" politicians would be smarter about borrowing money than a $15 an hour factory worker being offered a mortgage on a $600,000 house (like was happening a few years ago), but I guess not.
Good article, IMO! Makes perfect sense to me unless TPTB have decided to bring money printing to a halt and are now going to allow the system to implode into a deflationary spiral. It seems this is the path Germany has destined for the eurozone, which morphs into a government debt default which is just as currency negative as printing and arguably less economically destructive? Thx
The funny thing is, a government debt default should be currency negative I would think (see Europe), yet a stunted economy is a deflationary event, right? As Kaimu pointed out a few days ago, most of the fortune 500 is on government welfare, so what happens if government cuts the umbilical cord, does the fortune 500 react by turning to the public in attempt to replace the lost revenue, and doesn't that translate to higher prices because of the fact that ballooning government debt is no longer the reservoir feeding the fortune 500?
Ugh, my head kinda hurts now, from infinite circle thinking...
CSTR - I realize I had said I was interested in taking a position in CSTR around $40, but can/should I qualify that by adding my expectation of BAC revisiting $3 has yet to occur, and thus CSTR still isn't a buy despite having returned to $40?
Does that make any sense at all, or should I just be thinking of CSTR as being at the bottom of a trading channel with a double RSI accumulation alert? I bet if the dollar doesn't put in a double top here but just wobbles a little and keeps moving up, then BAC would likly move on down to $3 from here and about the time that occurs, I would simultaneously observe a triple RSI accumulation alert on CSTR?
CP - It read good to me Bubba, but then again I've had a few. BC going silent usually means he swung it out there and got it chopped off.
I really do like these Renko-type charts (post #100875 on CC). They help me with the discipline-thing to focus on the RHS of the reversal and not get sucked in too early on the LHS...
Kyle, there is a classic video out there, which *proves* that a fiat monetary system MUST keep pushing down the quality of life of average citizens because of constant inflation.
6:31 PM Stock index futures are rocking and rolling in early Sunday evening trade, apparently encouraged by strong Black Friday sales, potential IMF/ECB support for Italy, and a story in Germany's Welt that the Bundesbank is warming to the idea of eurobonds. S&P 500 +1.4%, German DAX +1.9%. Risk currencies romping as well. Euro +0.6% at 1.3319, aussie +1.3% at $0.9834.
No, Mark -- I am sure that's because of your purchase of AUMN on Friday. :) In order for AUMN to jump 20% in one day we need both a strong day in S&P and a strong day in silver, and so far both are off to a good start!
On Friday, it has reached the same level as the peak on October 4. However, during this second rally in $USD both S&P and precious metals suffered much less than during the first rally. This suggests that when $USD starts going down again and reaches the late-October level of 75, S&P and PMs will probably rise above the levels they reached in late October.
Yeah, S&P futures, oil, gold all up. We are also very oversold, so it may just be an oversold bounce, but I tend to think it will be a lot more than this.
Of course, there still 13 hours for some European official to say something to screw it up!
Watch the Gang of Six come up with >$1.2t in budget cuts by Friday.
ReplyDeleteProbably a good idea Port. Best stay the heck away from Barndt also!!
ReplyDelete2nd- I was reading a report of a 4T deal later next week.
ReplyDeleteI know they would give him back quickly, realizing their mistake, but I'm starting to wonder if RB was abducted by aliens.
ReplyDeleteDavid- Can you explain the move in AUMN in Sept. 2011? It basically went from 7-28 in 45 days.
ReplyDeleteSorry, 2010. This whole alien thing has me spooked.
ReplyDeleteI'm still intrigued by ZIP.
ReplyDeleteRobear - The aliens may have felt the urge to draw and quarter him, thus he cannot post.
ReplyDeleteOh, I neglected to account for the first step (hanging) the aliens would most likely have taken:
ReplyDeletehttp://en.wikipedia.org/wiki/Hanged,_drawn_and_quartered
Well, it appears the hanging is the second step of the process, sorry for the confusion...
ReplyDeleteZIP - You're welcome to perform your own market test, all you must do is park your Toyota on the street, leave the doors unlocked with the keys in the ignition.
ReplyDeletemark i like zip, z, and open a lot at these prices...oh and cstr of course
ReplyDeletehappy tday guys. this fathering thing is awesome.
TOF- Eat it up Man! Just remember, it's almost impossible to brake them!!
ReplyDelete"David- Can you explain the move in AUMN in Sept. 2011? It basically went from 7-28 in 45 days."
ReplyDeleteIt think it happened because AUMN just has a very high beta relative to GDXJ, and GDXJ was exploding after the QE2 announcement.
CIM - Div is now over 20%
ReplyDeleteFutures are up nicely right now. Maybe we *will* get a nice Thanksgiving present, for a change? :)
ReplyDeleteRoast Duck - Hey Mark, have you got any favorite duck roasting recipes?
ReplyDeleteAUMN - I'm not being prejudiced, only trying to be objective for objectivity's sake, but I see lots of charts like this one where these pinch's only resolved into what were eventually lower prices following a brief rally that appears to have been sold:
ReplyDeletehttp://stockcharts.com/c-sc/sc?s=AUMN&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7 736
SIAL - Here's another one, for objectivity's sake:
ReplyDeletehttp://stockcharts.com/c-sc/sc?s=SIAL&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7 736
Perhaps it would help to look at money flow or something, but I wonder how much further these can sell off and if the money's going somewhere else like into the dollar, into emerging markets, or if the low volume is indicative of some form of Kabuki show...
Another day of Merkel talking - another day of a positive stock market getting trashed.
ReplyDeletehttp://www.guardian.co.uk/business/blog/2011/nov/24/eurozone-crisis-sarkozy-merkel-monti
Now we've got to wait till Dec. 9th till the next meeting where some treaty changes will be introduced, but no ECB support.
Hope you guys are enjoying your day off not listening to all this BS.
"Hope you guys are enjoying your day off not listening to all this BS."
ReplyDeleteI can't hear the BS, but I can see the results...
Okay, I've got the duck in the oven.... Nothin' too it, just roast the sucker.
ReplyDeleteCP- I've never roasted a duck. Love to pan saute the breast meat though.
ReplyDeleteHappy Thanksgiving to all. Don't know what I'd do without you guys.
Parents coming over for dinner, so lots to do!!
$Silver C&H?
ReplyDeleteHmm, My untrained eye wouldn't have noticed this on their own...
http://www.24hgold.com/english/news-gold-silver-sprott-goes-for-the-silver-fences.aspx?article=3709603060G10020&redirect=false&contributor=Silver+Shield
ES low was 1155, +3 for SPX is 1158 Fiber.
ReplyDelete"Love to pan saute the breast meat though."
ReplyDeleteAh-ha, quite right, that's the answer I was looking for!
Okay, next time that's how I'm gonna approach it...
Dollar breaking out...
ReplyDeleteOne more tell- the 'Red Skies' post on CC. I single it out only b/c my sixth sense kicked in immediately upon reading. It's always unpredictable what nails a take on market direction for me- and right now, it's green on the screen by close.
ReplyDelete$INDU - You can see on this chart where the pinch, while +DI was less then 10 and -DI slope went negative, was a buy.
ReplyDeleteWe're not back to near those conditions yet, although MACD has clearly rolled over.
Note that ADX on that chart was 45, a fairly tight pinch.
ReplyDeleteOops, here's the chart:
ReplyDeletehttp://stockcharts.com/c-sc/sc?s=$INDU&p=D&yr=0&mn=7&dy=0&i=p99295968853&a=217994610&r=7 736
Another way to look at it would be to consider long positions once the RSI(7) pops back up through 30...
ReplyDeletetrying to get caught up on things while the little man sleeps.
ReplyDeletethe late 1990 market is almost identical to today's. i remember looking high and low for similar markets in the past - ones that had the following:
(1) Large multi year rise after a crash
(2) Substantial break of 200 DMA (at least 5% below) with a subsequent rally back above it
(3) Subsequent rapid drop of 20% and a substantial drop below 200 DMA.
(4) Rally, then break lower below the share drop low.
(5) Rally roughly back to 200 DMA
(6) 200 DMA starting to roll over.
The 1990 market and today are the only two that I could find (maybe I missed a few others??).
What happened after this in 1990 (after it tested / went near the 200 DMA) was a very sharp drop of about 6% or so over 6 days. It bounced a couple of days, then went a little lower and then the selloff was over. After that point there was a massive rally of about 25%.
"massive rally of about 25%."
ReplyDeleteNow there's a compelling thought.
What were the RSI(7/14/28) cycles doing, did they provide reversal confirmation?
Aug 31st 1998 - S&P RSI(7/14/28) triple accumulation alert.
ReplyDeleteSept 1st - S&P RSI triple buy alert.
Fast forward S&P to last close:
ReplyDeleteRSI (7/14/28) = (22.53/36.88/44.16) -> Single accumulation alert...
Someone is panic selling XWES so I decided to buy it on the dip...bought more at $2.7. Trailing twelve month EPS is $0.17 and they projected rev growth of 50% with EPS growth of over 50% for next year. If that's the case then its trading at 10 times those earnings with earnings growth of greater than 50%. That equates to a PEG of less than 0.20.
ReplyDeleteTen minutes to close, not exactly green across my screen. So I called it wrong. No change in my own sentiment, however.
ReplyDeleteBelieve it or not, there will be another scrimmage today, in preparation for two games on Saturday- pending outcomes, up to another two games on Sunday. The little guy was invited to 'post-season' play- Peninsula teams face off in the Turkey Tournament.
CSTR- Looks like it's 38.50ish.
ReplyDeleteBest performer in the port today: TM, +3%. Worst: POT, -2%.
ReplyDeleteKind of a non-event day. I sense a little sector rotation taking place- out of NDQ and into value blue-chips. JMO.
ReplyDeleteA better way to put it would be: out of large-cap technology.
ReplyDeleteAll right David. You don't have to feel all alone.
ReplyDelete3,700 shares of AUMN @ 6.07/6.06
Tried to get some XWES, but no luck.
Make that 4000 shares. The last filled.
ReplyDelete"3,700 shares of AUMN @ 6.07/6.06"
ReplyDeleteAwesome entry, Mark! Knowing your skill, this probably marks THE low for AUMN -- yay! :)
I hope so David!
ReplyDeleteMET is probably next on my list.
ReplyDeleteAUMN will surely be another TCK from these levels, going up 10X easily...
ReplyDeleteIn case you haven't read carefully the latest AUMN's quarterly report (November 14), here are some excerpts from it:
ReplyDelete"Since the Company assumed management on September 2, 2011, operational improvements have included moving the underground mine development out of the veins and into the adjacent footwall structures. Although this work has decreased production of plant feed temporarily, ore head grades to the plants have improved by approximately 45% for silver and 24% for gold, with the head grades and daily feed expected to continue to increase as the mine development opens more working faces for ore extraction. Process control improvements in the oxide plant have increased silver recoveries from approximately 54% to 73%, with additional metallurgical test work and operational improvements ongoing. Process control improvements in the sulfide plant have improved lead, zinc and pyrite concentrate production and quality."
That's huge, folks! ECU was stuck with 50% silver recoveries in the oxide plant for 2 years, while AUMN increased those recoveries by 35% in 2 months AND also increased the ore grade that is fed into the plant. That means they are now producing 1.35*1.45 = 1.96 times more silver per tonne of mined ore! Finally, we have some knowledgeable people operating the Velardena mine, and they will most likely deliver on their promises! Now, about their promises:
"The Company expects production rates to increase commencing in the first quarter of 2012, and by the fourth quarter of 2012, annual production rates are estimated to be over 800,000 ounces of silver, 16,000 ounces of gold and one million pounds of combined lead and zinc."
This is exactly the same guidance they gave on September 2, and it is good to know that their close interaction with the Velardena mine since then did not change their guidance. At $50/oz silver, $2000/oz gold and $1/lb of lead/zinc in one year, their annual revenue from the Velardena will be more than $80M! So we don't need to wait for 3 years in order for AUMN to build the new 2000 tpd sulphide plant (which is supposed to produce annually 4 million ounces of silver, 80,000 ounces of gold and 10 million pounds of each lead and zinc) in order for AUMN price to shoot up -- it will most likely be 4 times higher in one year already!
Thanks David. I scanned it, but you've been connecting the dots. Not my forte.
ReplyDeleteMCP - New 52wk low...
ReplyDeleteBoth S&P and dow have RSI(7) under 30 now.
ReplyDeleteEurobanks trying to dump overpriced-assets:
ReplyDeletehttp://www.businessinsider.com/european-banks-frantically-trying-to-dump-7-trillion-of-crap-assets-but-no-one-will-buy-them-2011-11#ixzz1emiV8jbU
TLT - With all these Euro downgrades coming at a rapid clip, bondies seem to be getting nervous. Time to short US bonds soon?
ReplyDeleteFrom my readings this weekend, I think the German / ECB attitude is:
ReplyDeleteThese countries (Italy, Greece, etc) survived with high interest rates before joining the Euro. They've had the benefit of very low rates from being in the Euro and now it is time for them to make the hard changes that need to be made for them to be the type of country which deserves these low rates.
Things are changing - Greece and Italy put in budget focused governments, Spain and France passing austerity budgets and, this weekend, even Belgium is finally doing something.
It's a bit of a game of chicken, but I think Merkel and friends may actually be pleased with the way things are playing out.
These countries - By joining the EU, were offered the "benefit" of very low rates despite their ability to repay.
ReplyDeleteSounds like predatory lending to me.
You'd like to think "professional" politicians would be smarter about borrowing money than a $15 an hour factory worker being offered a mortgage on a $600,000 house (like was happening a few years ago), but I guess not.
ReplyDelete"You'd like to think "professional" politicians would be smarter"
ReplyDeletePerhaps they would be if they weren't on some lobbyist's kickback list? ;)
What do you guys think of this article....
ReplyDeletehttp://seekingalpha.com/article/307959-is-this-the-end-of-the-american-dream?source=yahoo
Good article, IMO! Makes perfect sense to me unless TPTB have decided to bring money printing to a halt and are now going to allow the system to implode into a deflationary spiral. It seems this is the path Germany has destined for the eurozone, which morphs into a government debt default which is just as currency negative as printing and arguably less economically destructive? Thx
ReplyDeleteEither way, a bumpy road ahead no doubt.
Assuming government is shuttering the presses:
ReplyDeleteThe funny thing is, a government debt default should be currency negative I would think (see Europe), yet a stunted economy is a deflationary event, right? As Kaimu pointed out a few days ago, most of the fortune 500 is on government welfare, so what happens if government cuts the umbilical cord, does the fortune 500 react by turning to the public in attempt to replace the lost revenue, and doesn't that translate to higher prices because of the fact that ballooning government debt is no longer the reservoir feeding the fortune 500?
Ugh, my head kinda hurts now, from infinite circle thinking...
CSTR - I realize I had said I was interested in taking a position in CSTR around $40, but can/should I qualify that by adding my expectation of BAC revisiting $3 has yet to occur, and thus CSTR still isn't a buy despite having returned to $40?
ReplyDeleteDoes that make any sense at all, or should I just be thinking of CSTR as being at the bottom of a trading channel with a double RSI accumulation alert? I bet if the dollar doesn't put in a double top here but just wobbles a little and keeps moving up, then BAC would likly move on down to $3 from here and about the time that occurs, I would simultaneously observe a triple RSI accumulation alert on CSTR?
Was just about to say that SSRI & PAAS were looking a little positive until I saw Les post (#100899) 'Prepared for a silver selloff'...
ReplyDeleteDoes anyone see the trader signal Sarcozy's telepraphing in this photo by tugging on his ear? I think that's his buy signal???
ReplyDeletehttp://www.reuters.com/article/2011/11/27/us-eurozone-integration-ecb-idUSTRE7AQ00F20111127
Kyle - $silver - Some people have identifed an H&S setup, but haven't completely ruled out the flag formation:
ReplyDeletehttp://www.whackotrader.com/2011/11/silver.html
Another trader, who points out the gold:silver double top and explores a couple of reasons why he thinks the ratio is headed back to 16:
http://news.silverseek.com/SilverSeek/1321858860.php
Sarkozy - On second thought, he may just be telling Merkel to pull her head out of her a$$...
ReplyDeleteSilver Market Lacks Integrity:
ReplyDeletehttp://www.daltonfinancialnews.com//2011_11_silver_market_lacks_integrity.html
Clive Mound also is concerned silver appears to be breaking down, A change of heart?:
ReplyDeletehttp://news.silverseek.com/CliveMaund/1321836820.php
Hve you guys ever noticed it's never a good sign when after having been previously bullish, it's never a good sign when BC goes dark?
ReplyDeleteOkay, so I didn't proofread that one...
ReplyDeleteCP - It read good to me Bubba, but then again I've had a few. BC going silent usually means he swung it out there and got it chopped off.
ReplyDeleteI really do like these Renko-type charts (post #100875 on CC). They help me with the discipline-thing to focus on the RHS of the reversal and not get sucked in too early on the LHS...
http://www.screencast.com/t/r1kyneLaaAyW
"What do you guys think of this article...."
ReplyDeleteKyle, there is a classic video out there, which *proves* that a fiat monetary system MUST keep pushing down the quality of life of average citizens because of constant inflation.
I just noticed that the futures have opened up VERY nicely!
ReplyDeleteLooking at the futes. Any news I missed?
ReplyDeleteHaven't been to CC in months.
I guess this is it.
ReplyDeletehttp://www.creditwritedowns.com/2011/11/imf-ecb-italy-600-billion-euro-bailout.html
6:31 PM Stock index futures are rocking and rolling in early Sunday evening trade, apparently encouraged by strong Black Friday sales, potential IMF/ECB support for Italy, and a story in Germany's Welt that the Bundesbank is warming to the idea of eurobonds. S&P 500 +1.4%, German DAX +1.9%. Risk currencies romping as well. Euro +0.6% at 1.3319, aussie +1.3% at $0.9834.
ReplyDeletehttp://seekingalpha.com/currents/all
Will be watching TZA closely...
"I guess this is it."
ReplyDeleteNo, Mark -- I am sure that's because of your purchase of AUMN on Friday. :) In order for AUMN to jump 20% in one day we need both a strong day in S&P and a strong day in silver, and so far both are off to a good start!
Watching for the 'Moon-Bounce' Rally until 10 Dec then a little TZA until Xmas Eve....
ReplyDeletehttp://caracommunity.com/sites/default/files/moon_oid_112311_4.png
Check out the chart of the $USD index over the past 3 months:
ReplyDeletehttp://quotes.ino.com/chart/index.html?s=NYBOT_DX&t=l&a=50&w=1&v=d3
On Friday, it has reached the same level as the peak on October 4. However, during this second rally in $USD both S&P and precious metals suffered much less than during the first rally. This suggests that when $USD starts going down again and reaches the late-October level of 75, S&P and PMs will probably rise above the levels they reached in late October.
Yeah, S&P futures, oil, gold all up. We are also very oversold, so it may just be an oversold bounce, but I tend to think it will be a lot more than this.
ReplyDeleteOf course, there still 13 hours for some European official to say something to screw it up!
new post
ReplyDelete