After losing -35/ounce yesterday, gold is tumbling another -15/ounce heading into the open. GDX/ GDXJ bidding 38.9x/ 16.4x.
Paulson just walked into the bar, and obviously had a long night. It's no secret that Paulson is the single largest shareholder of GLD: http://www.businessinsider.com/paulson-and-co-gold-stake-2012-8. He's now headed our way with a bottle of Glenfiddich! Hussman spent the night battling his own demons.
In company like this, cash is about as exciting as a broom. But that's exactly how I plan to use it when I join Cinderella in sweeping up after the party's over.
The big risk with commodities like gold and silver is if people start selling the ETF's. These funds will dump the metal onto the market regardless of price and you could get a situation where selling begets more selling.
ReplyDeleteBMO is showing silver ETF's holding 650 million ounces now, with annual demand of 884 million ounces and production of 994 million ounces. They are counting on investment demand or inflows to ETF's to keep the market in balance and are calling for $33.50 silver this year, but if we actually get outflows, I could see this driving silver back down below $20 pretty quickly before things rebalance.
"I could see this driving silver back down below $20 pretty quickly before things rebalance."
DeleteI'll be there with cash in my pocket, rings on my fingers and bells on my toes. Can't believe I got shook out of oil around $30......
BALT - CP I've been following this one for several weeks now. They're the most levered to spot rates.
ReplyDeleteI was talking with Jesse last week about how the shippers are going to go nuts at some point this year...the key is when and identifying the trigger on the charts. The BDI is putting in a long basing pattern with slightly higher lows since this time last year. Since BALT is so levered to spot rates and is looking like one of the better charts, perhaps the turn has already started. EXM and GNK both trade at less than 0.10 times book. EXM went on a 50 fold run in 2003-4. Can it do it again?
Good thing is we don't have to wait long: BALT and GNK both will report today after hours.
DeleteIt would surprise me but hey, I'm all for it!
DeleteWhy doesn't Bernanke just hire these ships and send them on a sea cruise?
DeleteMUX - Going to $2.20?
ReplyDeleteAdded @ .24. Last 2 lots.
ReplyDeleteVMW - This could be the day.
ReplyDelete$72.81....
DeleteDavid- Consider this. Sell it all. When miners finally bottom and then begin to climb back up, put the positions back on. What if AUMN has a 1-handle at that point? You could then double your money with a 2-handle. We've all seen the relentless nature of declines in miners. It doesn't end until it ends, and no one (not even John Paulson) has a clue when that will occur.
ReplyDeleteThat's why I've been offing the physical. In most cases I'm still up 200%. WTF. Sell it and wait for a bottom to print.
DeleteAUMN has to close under $2.80 before it can move to $2.20 and lower. SVM is now trading under $3.80
DeleteNot happy about ANAD today. Getting kicked in the ANAD's doesn't fell all warm and fuzzy. Should have micro-managed it!
ReplyDeleteOh well, sold GASS and SOL yesterday, so once again the market giveth, and the market taketh away.
Anyone watching SNE? I bought a little yesterday.
ANAD's stinking up the room, take a bath!
DeleteYep, a bad case of bromhidrosis.
Deletehttp://www.youtube.com/watch?v=lO4d0sU2Tm0
Added some more YRCW at $6.51.
ReplyDeleteOn the road today. Headed out now. Good luck, guys. Keep your eyes on big sister..
ReplyDeleteCOW?
ReplyDeleteNo horsing around, now.....
DeleteGDXJ- I can't readily find any chart that matches how far it's outside the lower BB. Pretty amazing, although I don't plan on watching it for long.
ReplyDeleteNSPH having an interesting day.
$1.80 -> $2.20?
DeleteRBY - $2's day.....
ReplyDeleteVG - not doing half bad today so far.
ReplyDeleteWill the beard pull the wool today? Housing starts numbers came in weak and CRB/10yr price back in QEi zone.
ReplyDeleteCopper - Someone knew housing starts would be down?
DeleteGMO - "Lui Han never loses, Lui Han always wins"
ReplyDeletehttp://online.wsj.com/article/SB10001424127887324296604578178693593527394.html
China Molybdenum Co., Ltd. (3993.HK)-HKSE
Delete4.04 +0.03(+0.75%) 2:59AM EST, 52wk high is 4.37 Market cap 5B
Jinduicheng Molybdenum Co., Ltd. (601958.SS)-Shanghai
12.50 +0.09(+0.73%) 2:00AM EST, 52wk high is 15.91 Market cap not provided.
BERY - Pretty strong, huh?
ReplyDeleteVMW - Stink bid filled @ $72.48
ReplyDeleteHome base is Palo Alto, so it can't lose, right?
DeleteI like this one but still watching/waiting.
DeleteIt did seem to fold easily.
DeleteInteresting atrticle by Howard Marks. It is probably worth reading a few times over a few week period to think about vs a tweet world.
ReplyDeletehttp://business.outlookindia.com/article.aspx?283882
Well reasoned article, thanks.
DeleteDavid for you.
ReplyDeletehttps://www.youtube.com/watch?feature=player_embedded&v=RQSRY69RiD0
First 10 minutes, will give you a great insight in AUMN and pre-production projects.
Hat Tip Jock at sister site.
PAL - Sub $1.20 coming, no doubt. I'm wondering now about ore grade and if it's feasible, considering the unrealized emphasis given by management to chasing gold mines.
ReplyDeleteAt least country risk is low, not Venezuela or South African anti-colonialism.
Wow, I never thought it would come to this. Did you folks see the sentiment chart on gold that Geoff posted this morning? It is at the lowest point EVER, even lower than during the 2008 crash! Sorry, I can't sell at a time like this. I am not good at waking up pre-market to make sure that the price doesn't run away from me. What if AUMN gaps up 10% one morning -- am I going to chase? Probably not. Then it will gap another 10% and I would be gone. If I stay invested, then in order to profit from the current situation all I would need is to survive the brief period of lower prices. I am lining up more credit card checks at 0% for a year for this purpose... I also placed a buy limit order for 20 October $2.50 calls on AUMN at $0.7.
ReplyDeleteSince no one wanted to sell me the AUMN calls at the bid price, I decided to buy 5 contracts of January 2014 $15 calls on GDXJ at $2.80. This will reduce the company-specific risk in my portfolio...
DeleteAlso, the reason for buying GDXJ calls *now* is that gold has reached its 2-year support, which successfully defended the December 2011 sell-off and the May 2012 sell-off. Gold should put up a fight around this level, with all the central banks interested in buying gold at the pace "determined by the market prices", implying that they, as very long-term investors, will simply buy more gold the cheaper it goes, thus providing support for it.
DeleteIn order to answer this type of question you have to honestly answer the inverse. What if you wake up and gold is $1000 and AUMN is $1.00?
DeleteShould doesn't enter the equation.
In short: "Those that fight and run away, live to fight another day".
DeleteDavid - if you're going to go into debt do it with a stable company that you know will be around for a long long time...you know like YRCW with it's massive negative book and huge debts :)
Deleteseriously, though, go with something that has shown signs of bottoming at the very least.
Okay, so if the market went on a tear b/c earnings estimates increased, then as PM miners earnings estimates increase, they act the same as equities and begin trending down as they become overbought?
ReplyDeleteOkay, whatever..... I'll note that my broker is positive on the PM mining sector and apprehensive on the industrial metals. Last week they also covered their treasury short and closed their SPX long.
Bloodbath equals mining shares.
ReplyDeleteThat's what I expected to see when S&P finally pulls back. :)
Delete"if the SPX finishes today down 7 to 10 handles or more, this should lead to lower numbers tomorrow morning"
ReplyDeleteGold - Leading the way again, how's that euro H&S look?
ReplyDelete"David - if you're going to go into debt do it with a stable company that you know will be around for a long long time..."
ReplyDeleteI thought and I still think that AUMN is such a company, which not only will be around 1 year from now, but will also turn the profitability corner as they finally complete the San Mateo ramp in 3Q, lower the heavy machinery into the productive high-grade Santa Juana area and start expanding their production.
"Fed backs away from asset buying"
ReplyDeleteSo if the Fed is concerned about devaluation of $USD and upcoming inflation, why isn't the market concerned about it, with spiking $USD and gold at the 2-year low???
Because the Euro is driving the dollar higher and gold moves inverse to $USD. Also, investors are selling gold to fund other investments that will move more.
DeleteMy reason? The chart says it's trending lower. Price is falling, time to go.
If the market corrects, ALL assets will correct, including PM's and miners. That is a lot of pain.
Is gold trading below average real cost to produce, or not? If so, it's not favorable to BC's PM miner windfall profits model, is it?
DeleteIDK, how can miners possibly make more with lower prices?
"Fed Meeting Shows Dissent on Measures to Lift Job Growth"
ReplyDeleteThis is just the kind of a headline that can put the end to the relentless rally we had in S&P over the past few months...
David, be careful using sentiment indicators which have only been tracked during a rip-roaring bull market.
ReplyDeleteRremember back in the 1990's, but central banks had caps on how much gold they were allowed to sell they all wanted to get rid of it so fast, Barrick was being praised as the smartest gold company because they used hedging to protect against price declines and nobody though gold ever went up in price. This was really bad sentiment.
The point with trading based on sentiment is to check how low it is relative to where it was over the past 2 years. Back then, I am sure that 5-year lows in sentiment provided good local buying opportunities...
DeleteFair enough David. I am taking more the position of trying to figure out if the long term bull market in gold is over as opposed to looking for a good local buying opp.
DeleteLook at it this way, if someone had a position that is up 426% from the low and his off 18% from the high, why should they be too concerned here?
DeleteIt will not suprise me if gold trades down to 1350-1400 here. And wee still have negative interest rates.
I would however give thought if I have been averaging down all the way on a losing trade. I can see if someone has a plan to do this in three or four lots, but continuing to do it in the face of relentless downtrend sees tragic to me. At some point you have to have a reason to cut loss or you will not survive.
All out @ .88. Got to run. Will add up the damage when I get back.
ReplyDelete"First 10 minutes, will give you a great insight in AUMN and pre-production projects."
ReplyDeleteThank you, T3d! I should have done such a study myself *before* buying call options on AUMN! For one thing, I am glad that they did not take on any debt to finance themselves. :)
http://www.bloomberg.com/news/2013-02-20/san-jose-pot-shops-use-ipads-to-lure-silicon-valley-techs.html
ReplyDeleteHeadline from WSJ:
ReplyDelete"Fed Officials Feared Easy Money Could Rattle Markets"
Over the past month, when the market was in fear of easy money, it was really "rattled." Today, however, the market can breath a sign of relief and calm down. :) Thank you, caring FOMC members! :)
They are talking out of their assess, as if they really know what thery are doing.
DeleteOne trick ponies, at least a hooker can give you multiple positions (I imagine).
"They are talking"
DeleteI assume you mean the FED...... I recall last week someone(from the FED?) was floating the idea of raising rates.
I wonder when they take their foot off the currency wars gas pedal. Recall this rhetoric last cycle led to bigtime downside?
LOL! What they feared is gold getting away from them. This is all jawboning, but what else can they do?
DeleteThey are between a rock and a hard place, out of ammo and unable to extricate themselves without some real improvement in the economy and employment.
If the secastration happens they will be forced to turn on the tap again. (above the billions they are already buying in debt).
Until then it's best to sit on the sidelines and wait.
20 pts, eh? Nice......
ReplyDelete"It will not suprise me if gold trades down to 1350-1400 here."
ReplyDeleteThanks, I was trying hard to comprehend how PM miner earnings estimates were increasing.
I guess $1520 is the next downside target for gold, that should really ramp those miner earnings!
"At some point you have to have a reason to cut loss or you will not survive."
ReplyDeleteI will survive, no questions about that. :) The total debts I took on can still be serviced easily with my job income. So even if my portfolio goes to 0, my family will simply have to live in a frugal mode for a few years, using all the extra income for paying down the credit card debts. This may actually be a more educational experience for my children than living in abundance and getting used to being "consumers." My wife and I have already agreed that we don't like the "consumer" attitude prevailing in the US, and so she has no problems living frugally. So we'll survive. :)
I think the fed notes are really just an excuse to sell after the long uptrend. Not a major impact on the overall economy or market.
ReplyDeleteGDX and GDXJ are down today on 3X the average volume as they make new 3-year lows. There may be many people left to sell GLD/SLV (right into the hands of central banks), but who is left to sell GDX/GDXJ???
ReplyDeleteWell, looks like we are right at the lows from last May and December, 2011, so we are at a good place to expect a bounce if we are going to get one.
DeletePlaying Ping Pong with my 2 hardcore gold bug friends tonight, so will be interesting to see if they are getting worried. Would be a good contrarian sign, but have my doubts.
Bought more YRCW into the close at $6.31, $6.29, and $6.27. Preparing for a long term large position in this.
ReplyDeleteSPX -- looks like 61p8 still has a target of 1543-1553 after a back-test of the Inv-HnS neckline ...
ReplyDeletePeter Ghostine @PeterGhostine
$SPX chart update (price/momentum analysis) http://stks.co/aLQC
http://charts.61point8.com/20130220-SPX-Mom.png
1475 is the obvious target for sure. could get there tomorrow given how today went.
DeletePAY: perfect example of why i don't like holding thru earnings. yeesh.
PAY PE was 54 with insider ownership 9% and they were buying? Proof high PE's aren't necessarily justified. CRM reports in 8 days.......
Delete2nd - good call on today. nice to get it right huh? in cash to boot. my port took a 2.5% hit today thanks in part to YRCW. ouch.
ReplyDeleteLooks like Kashkari wants to run for governor of California...
ReplyDeletehttp://www.investmentnews.com/article/20130219/FREE/130219925
I got a margin call in my main account today, so in order to raise some capital, I decided to lower my first sell limit for TVIX from $5.50 to $5, for the 500 shares I purchased at $4.50.
ReplyDeleteyou know what i would do right? sell that mofo right now after hours.
Deletepeterbrandt has posted updated PM chart observations.
ReplyDeletenew post
ReplyDelete