Here's the rundown.
(a) Gold/miners have broken support, and prices are likely to fall further.
(b) I'm betting on a dead cat bounce ahead of an extended decline.
(c) The pattern I see playing out on Tuesday is a sharp dive in the morning, followed by a sharp climb into the close. There's really no way for me to guarantee I'll catch the move at work, nor am I able to trade funds except at market close, so I opened a position in RYPMX today.
Win or lose, it's all good. I can't win if I'm not in.
Sometimes we tend to think too hard. As I was going over the pros and cons, the 'sticking point' was, 'It's too easy to buy here. If it's that easy, it can't be right.' Yet for weeks I've had the idea that miners would retest last summer's lows, and if the XAU were to fall that far, I'd be buying.
ReplyDeleteHere we are (more or less) at the lows of last July. What am I waiting for?
Sure looks like MUX found some buyers throughout the day, or were those shorts covering?
ReplyDeleteWith gold in backwardation, dumping spot for future months, pays.
Gold in backwardation implies people are betting prices will be lower in the future - another sign of negative sentiment, so perhaps 2nd is right that we are due for a bounce.
DeleteBounce, is the operative word.
DeleteMake no mistake. Miners have sold off, hard.
ReplyDelete"Usually it is really hard to get a fill when trying to short the Ultra-products - have you been able to do this for KOLD with no issues David?"
ReplyDeleteI haven't tried shorting it, because I have very little buying power left. I chose to buy longest-dated in-the-money puts on it...
OK, that makes sense. You can get the puts, but when I've looked at the pricing on them, they take into account the normal ETF decay. KOLD is actually holding April contracts, so it looks like the avoid the monthly roll and do it quarterly instead to avoid some of the decay issues.
DeleteI guess a lot of traders long miners have been selling puts in order to lower their cost basis? Seems like that practice would tend to reinforce downward pressure on the sector?
DeleteFrom Kaimu...
ReplyDeleteI have been noticeably absent over the past year or more in terms of juniors, but now I am moving back in, but selectively. Gone are the days when there seemed to be unlimited funding for juniors. You need to look for juniors who are either close to production or have a strong partner. Then you need to look at grades and depths within those choices. Mainly you need the best and most successful management possible to lead the company. Then stay within your limited risk tolerance and your financial limits as well as your debt obligations. Don't bet the farm!
Gold is a downer. Why bet on a downer?
ReplyDeleteThat's what it's come down to. So it's closing in on a +50% launch into space. The final frontier.
Deletehttp://finance.yahoo.com/news/kingpin--marijuana-funding-model-starts-to-take-shape-212346330.html;_ylt=AgWep10iEs9IA1DJbx13SoeiuYdG;_ylu=X3oDMTN1OW1xYTI4BG1pdANGaW5hbmNlIEZQIE1lZ2F0cm9uIDIEcGtnAzAzYjFjNTQ5LWI5MmYtM2QxZC1iMTZhLTdmNjU5ZDI2MGY4NARwb3MDMQRzZWMDbWVnYXRyb24EdmVyA2YwNTg3NzMzLTc3YmQtMTFlMi05ZGRmLWU4Yzc3NzU5NmQ5OQ--;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3
ReplyDelete"Most banks remain unwilling to do any sort of business with cannabis operators due to federal regulations such as the Bank Secrecy Act, which requires financial institutions to report potential criminal activity to the government."
DeleteI call BS, more likely they're accumulating vigorously. The fines are always small in comparison to gains, nobody goes to jail or loses their license, and shareholders take the licking but keep on ticking?
Additionally, is it not true fast food sales have been robust in the two states where recreational use has been approved?
DeleteThat's the kind of analysis I appreciate! The ability to spot relevant relationships amidst the mass of data out there.
DeletePotential downside. Smoking pot might not be cool anymore. Kinda like the iphone.
DeleteLet's wait for a resurgence in long hair and bell bottoms to signal the return of the retro-sixties, then buy the shit of MJNA.
DeleteMJNA has real products as best I can tell, I watched the 60minutes interview on this company months ago and mentioned it on TT at the time. Anyway, Anthony W. Imbimbo is a member of the CIA (Culinary institute of America), so at least we know there's a kick-azz brownie recipe floating around somewhere?
DeleteSome might say the business model is doomed to failure, you don't think they're right, do you?
Okay, so maybe the company isn't properly set up in terms of shareholder rights, my only concern would be if the shareholder capital might mysteriously disappear overnight but why would that happen so soon considering the momentum will likely take share price beyond $1 and beyond, soon? I bet they have no shortage of customers? MJ isn't a fad, is it?
These guys are at the right place at the right time, maybe they just weren't properly prepared for the rush considering their shoe-string budget? Perhaps the official explanation should be they couldn't obtain financial organization banking for what was an illegal activity. I'd be more inclined to think they had no idea of how quickly success would come and that they're not about to walk away from the unique opportunity without fully capitalizing it.
Too good to be true, or fat pitch?
"Smoking pot might not be cool anymore."
DeleteI don't believe that at all, but this company offers THC juices, as well, right?
CC no doubt has more first hand knowledge of this company than any of us, we should consider his input.
I'd have bought some Friday had I known there were unfounded rumors floating around and the share price was smacked down. I wasn't watching it, but I do believe there's a good chance it really takes off at least until a behemoth like KO or someone steps up, which may not happen for some time until they're absolutley sure the coast is clear, KO's such a barge it's gonna take time for the idea to sink in?
I guess I need to add MJNA to my watch list so I can keep an eye on it.
I do see what might be a pattern of selling out Fridays though, someone anticipating a potential weekend Federale raid?
Deletehttp://seekingalpha.com/article/1187411-chronically-criminal-shielding-the-public-from-medical-marijuana?source=yahoo
DeleteName
DeleteTitles
Truth
Michelle L. Sides
"Chairman"
Director and Controlling Shareholder
Chief Operating Officer
Delinquent from Florida Bar
Owns ~48% of the Company with Llamas
Michael Llamas
Director and Controlling Shareholder
Former President and CEO (until 9/17/2012)
Under indictment for 19 Counts of Mail Fraud and 31 Counts of Wire Fraud in the Eastern District of California (Case 2:12-cr-00315)
Extensive history of being named a defendant in civil litigation regarding mortgage shenanigans and other fraudulent behavior
Owns ~48% of the Company with Sides
Theodore Caligiuri
Chief Executive Officer
A CEO of a $370 million dollar company that is also an active Residential Real Estate Broker for Coldwell Banker? You decide...
Babak R. Ghalili
Medical Director
Dentist in NYC
Anthony W. Imbimbo
"Independent Auditor"
Not PCAOB Registered (therefore unqualified to independently audit an SEC reporting companies)
Culinary Institute of America trained Chef (with a minor in cooking the books?)
Look, you really can't run a cannabis company with straight up dudes.
DeleteExactly, these guys are obviously out of the box thinkers and doers. I like the one about buying up a block of homes at 50% discount, flipping them for a double and throwing in the down payment to seal the deal.
DeleteI wish I was capable of swinging deals like that at the age of 22yrs.... Wow..
Yes, let's give these guys the benefit of the doubt. They're trying to turn their lives around with a legit business, after all. And I like their sense of humor. An auditor who signs off 'I'm a bimbo?' Priceless.
Deleteimbimbo could be a false name? Seems too obvious?
Deletehttp://www.ancestry.com/name-origin?surname=imbimbo
DeleteNo comment re the Sicilian connection.
That document, FORM 144, it shows shares were issued to US Bancorp?
DeleteThis company may be a fraud. I have made more already than I have in outstanding shares, so I'm playing with the houses $$$$.
DeleteReading the comments section on any story these days makes me wonder about people.
Crazy.
Thanks for uncovering this 2nd. It should be interesting to see what happens.
There are other legit companies that will do well as they have multiple other legitimate business activities than marijuana.
Oil services - I see some red candles formed Friday.
ReplyDeleteLOL, Total Demand = What the ultra rich want to buy + bare subsistence for the 99.5%?
ReplyDeletehttp://www.heritage.org/research/reports/2013/02/budget-cuts-would-not-harm-the-economy
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1872211
ReplyDelete(5) tend to hold undiversified stock portfolios.
DeleteYeah, that's me in large part b/c managing more than a few positions in a market that can move several percent overnight is a little beyond my capability. Show me a market that's not so tightly correlated, then my strategy might broaden?
MJNA - I thought this company was headquartered in Colorado, at least that's what I recall from the 60 minutes program I'd seen last year. Or, maybe I wasn't paying close attention and just assumed the wrong location?
ReplyDeleteThey may have relocated to San Diego to be closer to (unemployed) friends who assisted with the mortgage shenanigans. For a venture like this, you need associates you can trust.
DeleteAlso closer to supply.
DeleteTrue. All that talk about $500,000 hydroponic systems- come on. They're not idiots. It's cheaper when the stuff falls off a truck. Ah, there's the Sicilian connection.
DeleteMan, when we put our heads together, are we not a slick group of stock analysts?
DeletePot's no laughing matter 2nd.
DeleteWhich is exactly why you won't find too many straight up dudes in the biz. Legit or not, there's no avoiding the wrong crowd. I don't think the cartels will be walking away quietly.
DeleteSupply comes from around Shasta somewhere, sequoias have been clear cut?
DeleteThis might not even be the same company interviewed on 60 minutes, could've been another. I barely caught the segment and it's been a while.
Humboldt County is dangerous terrain.
DeleteNo you guys. These are young guys with lawyers these days. Nobody hangs with the old dudes in the woods, they don't have to. They get out and market the stuff.
DeleteAround here we have legal medical co-ops. Everyone, like in CA has cards and they have a legal limit. They grow indoors and market through the co-ops.
Next year it will be through state licensed stores. Humboldt is so yesterday. They are going legit, there is no need to take chances with loose cannons or cartels.
I read a local story the other day about a legal group here in WA that advises these people on who will accept their CC transactions and banking, how to structure businesses, how to negotiate all the legal in's and outs. Not the States of WA and CO are involved. I just heard another state (I didn't get to hear where) has stopped arrests and is just writing tickets. They're next....
DeleteAnyway, until I find that article again, here is the pot page of our local CBS affiliate. See for yourself.
http://www.kirotv.com/list/news/pot-news/aGMt/
NOW the states of WA and CO are involved...
DeleteI have thought about it losing it's allure by legalization, but if you look at alcohol after the 18th amendment it didn't lose anything it just became a huge business.
That and there are two sides to this, the "recreational" part and the medical part, so there is some diversification. There are quite a few states with Med Marijuana, so I don't think that is in danger and, at least here, those outlets may get around the 25% tax on each level of marketing where the rec. users will be paying 25% at each level depending on how the State structures it. I'll have to check with my Paralegal person that works for the liquor control board.
Won't lose allure IMO, big buzziness. Catching a buzz without the ill effects of alcohol?
DeleteRelative Value Strategist: Our thoughts on the world
ReplyDeleteFebruary 15, 2013
We tactically unwind our long SPX, short IG19 trade as the outperformance of stocks over credit is likely to take a breather for the next few weeks.We also discuss the risk-reward of a Main-IG trade.
AVP - Ex-div is 2/22, 12mo PO raised from $20 reiterated 2/11, to $24 Venezuelan bolivar devaluation is baked in.
ReplyDeleteAVP stuff sucks for the most part, I'm told.
DeleteGold - It seems Soros sold his gold position sometime within the last three months? I seem to recall he bought sometime around June last year?
ReplyDeleteSo it looks like he sold near the high, that which he bought near the low. Pretty good trade.
The question now is if he's a buyer here, we won't have that answer for another three months?
That's what he did last time. About the time they report he's a seller he starts buying.
DeleteSLW - $50 12mo PO.... Lowered from $53 1/8/13, top PM pick.
ReplyDeleteMortgage REIT Roundup: Q4 results continue to drive performance
ReplyDelete2/17/2013 6:39 PM
Mortgage REITs outperformed the broader market this week as more favorable valuations and improving incremental investment returns attracted investors back to the sector.
Download PDF Report (271kb) »
China Commercial Vehicle Industry: Heavy truck - a weak start in 2013: Jan sales down 14% MoM
NFP reported 4Q cash EPS of $0.85, well ahead of our est. of $0.78 and consensus' $0.69. Raising 2013 estimate from $2.50 to $2.55 and increasing PO from $18 to $21. Neutral.
A little President's Day TA.
ReplyDeletehttp://goldstocksforex.com/2013/02/17/sp-500-still-cautious/
Holy Shit:
ReplyDeletehttp://www.theglobeandmail.com/report-on-business/international-business/asian-pacific-business/in-china-silvercorp-critic-caught-in-campaign-by-police/article4528671/?page=all
Wow, that's wild.
Deleteat what point do you just say "f it, this isn't worth it"?
DeleteThe minute you hear there is a problem?
DeleteI know a guy who stupidly took some MJ with him to Japan, he spent a week in the center of an 6x6 cell in his tidy-whities on the balls of his feet. Maybe the ceiling was very low?
DeleteThis description is second hand, I never saw him again once he returned.
I bet Chinese prison food is to die for......
Sounds like this guy's been staying in hotels, not prison. Makes me wonder if he's really been in police custody????
DeleteI really wonder if this marks the end of the theory that "buy and hold is dead".
ReplyDeletehttp://finance.yahoo.com/blogs/breakout/16-old-actress-turns-stock-day-trader-143823005.html;_ylt=AogMqPvJ6IjlHBrVjFVJpZiiuYdG;_ylu=X3oDMTN1bTZqMXB1BG1pdANGaW5hbmNlIEZQIE1lZ2F0cm9uIDIEcGtnA2E0NWUwMzQzLTBiZDktMzFjMS1iM2YxLThlOGJkNGY5NjBmZQRwb3MDMgRzZWMDbWVnYXRyb24EdmVyA2YzNWQ1MmMzLTc3YmQtMTFlMi05ZmVmLWU1MWFjNzZjMjVkMQ--;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3
http://www.economist.com/news/finance-and-economics/21571898-fund-seeks-opportunity-weed-audacity-dope
ReplyDeletehttp://www.alternet.org/drugs/hemp-harmless-potential-economic-miracle-and-still-illegal-america-tide-seems-be-turning
ReplyDeleteCSTR Alert - Three customers at local machine last night while waiting for 15 minutes in parking lot.
ReplyDeleteNG article
ReplyDeleteThe production decline rates of the shale gas wells that are providing the bulk of new U.S. supplies are so high—60 percent in the first year and up to 85 percent by the end of the second year—that we may never be able to return to today’s production level.
Mark did you say that MOG disagrees that the NG wells have fast decline rates?
http://www.csmonitor.com/layout/set/print/Environment/Energy-Voices/2013/0218/Investors-are-subsidizing-natural-gas-consumers.-But-it-won-t-last
Christian and science seem like an oxymoron to me, is this the crowd who wants us to believe the current administration's policies have led us into a ditch and we should return to trickle-down economics ASAP?
DeleteT3d, while that article correctly states that companies are switching to drilling for oil, it did not mention how much gas as a byproduct the oil rigs are getting. It may be the case that all natural gas demand can be met with the "free" gas obtained as a byproduct of oil drilling...
DeleteDo not know, but they usually have decent articles.
DeleteInteresting point. David
DeleteSorry, I instinctively caught a whiff of Grover Norquist when I saw the URL.....
DeleteWonder the oil production decline rate of these shale wells looks like?
Despite all the announcements of the chem industry increasing cap-ex and concentrating on ramping US production due to natty logistics, perhaps this imminent collapse in natty production would also provide some downside limit for coal and nuclear?
DeleteInteresting how every time Ron Paul starts harping about the gold and silver price relationship to dollar weakness, gold takes a nosedive despite real production costs still exceeding spot price.
And asuming the US intends on challenging Chinese power via naval authority(as per Christian Science Monitor), then perhaps my brokers price objective of $30 for HII is overly pessimistic?
Defense: The Army is leading the decline in investment outlays:
%YR/YR Change 2010/2011/2012
RDT&E
Department of the Army 0.5% -17.7% -29.3%
Department of the Navy -13.1% -19.1% -6.4%
Department of the Air Force -9.6% 61.2% -8.9%
Defense agencies -7.9% 5.2% -8.5%
RDT&E, TOTAL -8.7% 12.3% -10.8%
Procurement
Department of the Army -16.4% -14.7% -28.5%
Department of the Navy -3.7% -0.6% -12.5%
Department of the Air Force 77.9% -59.3% 5.5%
Defense agencies 10.9% -4.2% -13.7%
Procurement, TOTAL 10.3% -25.8% -14.3%
Source: U.S. Treasury
Perhaps things are turning up for CHK though, considering my broker has assigned an 12mo price objective of $36?
DeleteMolydenum Backwardation: "The London Metal Exchange (LME) futures contracts also remains below $12, and the 3-month contact is now in backwardation relative to spot prices"
ReplyDelete"rarely a positive sign for this market."
I don't see how this is a positive sign. The futures price reflects all currently relevant information for predicting what the spot price is going to be in the future. So if the futures price is lower than the current spot price, then the consensus of investors is expecting the spot price to be lower in the future.
DeleteIt's not. That's why it say's 'rarley' above.
DeleteOK, got it. I thought it meant "a rare positive sign"... :) Maybe because I recently read an article by some pundit, who said that gold is also in backwardation and it is a *positive* sign...
DeletePerhaps, low prices may be indicative of lower prices?
DeletePossibly reduces the chance moly producer shares are about to gather upside momentum?
In the case of GMO, I found an article that announced Hanlong's financing for Sundance was delayed again. I don't see how Hanlong's inability to arrange Sundance financing should be considered a positive for GMO, although it may be that GMO is a better opportunity for Hanlong and thus preferred in the event Hanlong's credit would become overstretched by taking on both projects single handed?
LOL, I just read an SA article on backwardation written last Spet that posited the CORN ETF would benefit from corn futures backwardation. CORN is now 17% below where it was at the time, with just a couple of bounces.
DeleteAlmost looks like a decent place to re-enter here but I'll pass, considering Brazil was planted "fencepost to fencepost" and CNH has been on a rocket ride and sugar is still falling.
I saw that CP. Do you still have the link?
DeleteAbout Hanlong.
DeleteWell, I lost the link.
DeleteAnyway, we can follow Sundance news and share price using the SDL.AX ticker
http://finance.yahoo.com/q?s=SDL.AX&ql=1
"The futures price reflects all currently relevant information for predicting what the spot price is going to be in the future."
DeleteVery good choice of words David, much better than just saying backward or forwardation.
UPL- Any take here. Not you CC :)), we know yours!
ReplyDeleteEPS looks pretty severe, cash is about gone? Considering gas well depletion is not only rapid but also rabid (according to christian science monitor), they may need to try dumping assets or dilute shareholders?
DeleteAPA - These guys operation in Egypt are the booger in the soup, must be a non-issue considering the bang-up job the "mission accomplished" gang produced in pooch screwing the middle east?
I was thinking about VMW and the renewing interest concerning cyber security?
Australia - Well, it's refreshing to see at least Australia puts white collar criminals in jail, although 27 months seems like a small price to taupee.
ReplyDelete•Hanlong Former Executive Gets 27-Month Jail Sentence
taupee? a-o
DeleteDyslexic response to becoming involuntarily backwardated!
DeleteOr more likely, I'm delirious from Grover Norquist's after shave.
Delete:))))
DeleteAKAM - Insider buying?
ReplyDeleteGMO - Colonal Possum bought some Friday, but he didn't and hasn't mentioned anything about Sundance?:
ReplyDeletehttp://eurekaminer.blogspot.com/
Also, my broker is bearish on industrial metals right now.
AKAM/UPL - No broker coverage on these.
VMW - $106 12mo price objective "As part of our Data tells a story series we are focusing on VMware to highlight some key areas such as ELA growth, vCloud suite, and the Pivotal Initiative. LT winner targeting $50bn TAM."
GMO- 3.09 is the biggest VWAP area over 180 days. Monthly is 2.80-3.20...So this is a really interesting area.
DeleteFrom our friends at Twitz...
Delete"$GMO From 52 week high to POS in a month."
I'd expect GMO won't be a POS for long if Hanlong makes good. Sounds like they maybe bit off more than they can reasonably chew and need to find some partners before China Development Bank gives the final okey-dokey?
DeleteI feel like GMO is where it is currently due to the recent Sundance delay. Twitz doesn't mention Sundance, I'd bet.
How about insider activity, anything there? Finviz reports 17% insider ownership.
DeleteInsiders sold about 250,000 shares in January, similar to last year? Gotta have money to eat.
DeleteAlso, there might've been some selling in sympathy with MCP? Similar phenomenon as when Obama goes to Thompson Creek Windows to talk about energy conservation TC jumps?
DeleteGMO's $7 price tag from 2 years ago was similarly attributable to the MCP crazies.
Actually, I seem to recall GMO was trading around $2.40 before Hanlong entered the picture, and the permits have been obtained since. That adds value.
ReplyDeletePKX(POSCO) looks good to go on Asia strength, so POSCO might even step up their position if Hanlong coughs up an hairball.
3993.hk/601958.ss - Sometimes these can give a clue as to what might happen for GMO and TC.
ReplyDeleteIMH - Gonna break to the upside?
VMW - Looks very cheap...why is EMC buying so much of their stock? I know they were a big shareholder but what's up with that?
ReplyDeleteSure is tempting to start a position in gold miner Barrick (ABX). Trading at a forward p/e of 6, good yield, good management. If they would decide to restart their hedging program to better manage their business I would buy. They got rid of this a few years ago when gold prices were skyrocketing and they eventually took a $1b+ wwritedown. But in the current environment with stable prices and downside risk, hedging would be a great strategy to lock in prices when building new mines, etc. to lock in profits.
ReplyDelete