The sheeple are being taken to the cleaners by banksters manipulating the mining ETFs. Now is NOT the time to sell! The big boys (whatever the ---- that means) are selling it to buy it.
'I have written extensively about the negative sentiment towards both metals and miners at the early March lows. The data at the time was typical of what happens at lows - oversold price oscillators, horrible sentiment, bullish Commitment of Traders report and an extended cycle - so, I continue to see early March holding as the lows in both metals and miners.
'However, after taking a quick jog around the web, I can see that not many others agree with me. Former bulls have gotten completely worn out and doubt that the bull is still alive even though they admit that the fundamentals are bullish for the yellow metal. Without a quick rally out of the lows, I can't blame them.
'Over the past decade, we have seen price both rocket up from significant lows as well as meander for a while before moving higher. As long as price does not break the March lows, the current action is not worrying me at all. As a matter of fact, even though most people dumped their mining shares at the lows, some continue to sell miners and buy into the "all-time high" stock market. Long time readers know that I wrote about going long the stock market at the November lows and have been long since, so I am not negative on the equity market, but it is my opinion that the biggest gains moving forward are going to be in the miners and people are going to miss out because they are worn out.
'If price continues to chop in sideways action, more traders will leave the space thinking that they will get back in when it looks better. The only problem with that is, if I am right, they will end up being late as the miners experience a stealth rally. The longer the base builds, the stronger the base.
'You can see that we are expecting a low sometime within the timing band so this morning's weakness is not unexpected. Simply watch the support and resistance levels and trade accordingly.
'I can see it now, the stock market rally takes a breather in May only to see the metals rally hard with many not having made the the switch.
My wife told me a story she's heard from friends who have visited. Serious players. Some walk in barefoot, with blackened faces and torn clothing, then plunk down a few large at a time.
NUAN fundamentals look solid. 5 year top line and bottom line growth is very solid, as is free cash flow growth. I remember I was looking at this about 9 months ago but can't remember what kept me from investing. I think that Cody Willard guy was pumping it.
"• Consuming more information does not help you make better decisions — rather, it helps you be more confident about bad decision you are making. (Sounds like a Jesse I know)
• 9/11 was 12 years ago; 1987 was over 25 years ago.
• CEOs who cite” Uncertainty” are kidding themselves. They are ripe to be disrupted, see their companies marginalized and their best employees stolen from them. (They have my gratitude)
• Pick three money losing blogs to remove from your RSS feed, blog roll and daily routine. (Buh-bye) (who's your Sista?)
• This remains the most hated rally in Wall Street history (TBP 2009).
• It is exceedingly difficult to change the world. It is apparently impossible to change human nature."
Articles like this often mark a bottom, change the title to "Home builders" and backdate, as an example?
Doesn't say anything about retiring of older ships or potential effect of US energy boom, and they want people to actually pay for articles absolutely void of comprehensive analysis?
"More downside: cutting PO to $14, reiterate Underperform While shares have fallen to near nine-year lows, we see more downside as investors digest a deteriorating earnings outlook, and steel prices fall with iron ore. Most competitors (NUE, STLD, AKS) are cutting their cost structures, while we see only small improvements ahead for U.S. Steel. Without positive catalysts from selling European ops and with April scrap prices dropping, we expect X drops further. Our new $14 PO (down vs $16) uses an average 7x EV/EBITDA multiple on ‘13-14E (previously 6.75x 2013E)."
Intestinal fortitude Submitted by xyz (3 comments) on Tue, 04/02/2013 - 13:09 #118738 Vad disagreed with bullish precious metal miner calls at the 2011 conference. Bill said if you don't have the intestinal fortitude to be in the junior miners for the next several months, you should not be in the sector.
If gold goes to $1200, which is at or below the true cost of production for the miners as a whole, then they are pretty worthless. So perhaps that issue should be discussed when discussing that the precious metal miners trade at very reasonable metrics.
Also, in the WIR there are recent comments that there is no reason other than implied manipulation, to explain how the industrial metal miner sector is holding up compared to the precious metal miner sector. I disagree, they have different risks, only precious metal miners go down if gold goes down.
I used to post as Menock, but I eliminated my OpenID identity to attempt to stop obsessing on content like what is on this blog,
A Few Questions For Bill Submitted by sps50trader (11 comments) on Tue, 04/02/2013 - 12:46 #118735 Bill,
Every now and then someone asks a question that may not be easy to answer, and we all hate getting those questions, but I hope that you will allow me to ask a few of those questions... I also have a few examples below as well to help illustrate my points.
First, I have been right there with you for a long time now (keeping a bullish mindset long-term on Precious Metals and Miners and refusing to capitulate when necessary), however there seem to be a lot of confusing developments taking place in the Precious Metals that I am finding hard to understand. I have been following your blog for a long time now and a little while ago you posted that you believed a rally would take place in the Precious Metals area beginning on April 1st. In your WIR that you posted this past Sunday I believe you revised that opinion (understandably) saying that the rally might begin starting in Mid-April. Today you said that: "I can see it now, the stock market rally takes a breather in May only to see the metals rally hard with many not having made the switch." You also said in today's blog that as long as GDX can hold it's March low then you will not be worried. I am wondering, what has changed about the market that has caused you to push back your prediction on a rally taking place in the Precious Metals and Miners? Obviously the prices have gone down, but you also had been predicting that that would happen and that lows could be re-tested. However, those are a lot of revisions in a short period of time and I am just wondering if you think something has changed in the market or if you might not be quite as confident in a major rally as you were before?
Second, you mentioned that if GDX does not break below it's March lows then you will not be worried. Personally, I am less worried about GDX holding it's March lows and more worried about select Precious Metal Miners (ones that I like and you also have mentioned that you like and are long) holding their March lows. It appears to me that the recent sell off in GDX has forced many impressive Miners to threaten to break their March lows. It seems to me that GDX still has a fair amount of room to go down before it hits it's March lows (approximately $0.72 at the time I wrote this post) and going down that much more will likely force many very impressive Miners to break below their March lows. For example: SLW set it's intraday low in March at $29.66 and today (at the time of this post) it has already crossed well below that point and reached an intraday low of $29.53. If Precious Metal Miners, such as SLW, that you endorse (and I fully agree with you that SLW is an amazing company) have already broken their lows, will that force you to reconsider which Precious Metal companies you would want to invest in if a rally occurs in the Precious Metals? Do you still think the Miners will be the year's top performers if new lows are formed? If new lows are formed will that push back your estimate on when a rally could occur?
Third, it appears that GDX's bollinger bands are tightening and that a breakout to one direction or another is likely, does that affect your forecast at all?
I know that these questions are very difficult to answer as you can never quite be sure what is going on in the rest of the world, or why other people act in the manner that they do, but I hope you wouldn't mind answering some of my questions as they are probably questions that other people are also considering. Also, I know of course that when it comes to predicting the direction of the stock market it is all a guessing game, so please understand that my questions pertaining to your predictions are not meant to point out mistakes, but I am simply asking if your mindset has changed at all.
Anyone else can feel free to chime in and post their thoughts.
I can't shake off the feeling of a divine intervention taking place with the miners. Last week, after a session of morning meditation, I realized that infinite consciousness doesn't care about the stock market, about making or losing money. Moreover, I realized that if I were "rich and successful", it would be REALLY hard for my consciousness to distance itself from the aggrandizing thoughts arising in the mind. So I figured that if I want to stay in touch with the infinite consciousness, rather than get pulled into the egocentric identity created by the mind, I have to distance myself from the stock market. So I did it, and I said that I'll let God manage what remained of my portfolio. The very next day silver crashed through its March lows and has been going down ever since. The hand of God can be pretty heavy sometimes...
What is your intention? If being prosperous would disconnect you from the source and yourself, then will poverty do likewise? If one is true then so is the opposite.
What are you going to choose? Not choosing is a choice.
After observing my mind closely for the past year I noticed that during the brief periods when my port was growing, the mind was full of thoughts of how cool/smart I am and of the good life that lies ahead. These thoughts were preventing me from seeing life as it really was, being at one with the flow of reality. On the other hand, when things were not going well with my port, the mind was not building any palaces and did not have any expectations of the future -- it just stayed focused on what was happening at the moment, since there was nothing cool for it to imagine/desire. Living in imaginary palaces filled with more expectations (and fears of these palaces breaking down) is pretty draining. Why not just live in reality and do what reality demands at every moment -- not being a servant to the mind but being a servant to God/reality? In the latter mode of life the concept of failure cannot even arise, since I am not trying to get anything for myself. Every day is a successful and a happy day.
A beautiful chart with a steady sequence of higher lows. Until this sequence is broken, there is no reason to even think of going short. Many others are probably thinking the same way -- hence the complacency that Jesse noted in his update last night...
T3 - I don't think YRCW honors any technical setups right now. The issue as I mentioned last night is the convertible notes are most likely adding pressure to the stock. However, I've seen plenty of stocks power through convertible notes and in my opinion, the conversion of those is a good thing as it substantially lowers interest expense (and increases EPS) and total debt outstanding. I think it will take time for this to play out.
There are two other risks:
(1) ABFS is bringing YRCW to court for the 3rd time to try to get their concessions from the unions revoked. I have no insight on this whatsoever but my hunch is they're doing it to bolster their own argument for getting concessions granted (i.e., well you guys granted YRCW concessions, why not us?). But I really have no idea.
(2) Network improvements - these were hinted at in the presentation at BB&T in mid August and the company proposed these improvements to the union a couple of weeks ago. I think the company can be successful without them as I wasn't factoring these in but if they get denied the market will probably react negatively in the short term.
Ultimately, they need to post a positive EPS quarter. I think they do that this summer. Until then this is basically a penny stock that will fluctuate wildly. It trades at an absurd valuation but there are still risks and people aren't willing to jump in with both feet yet. A positive EPS quarter will go a long way toward that.
Even if this goes to $5 again I stand by my belief that this is one of the few remaining stocks out there that could be a 10 to 15 bagger from here. I think it peaks out at a $2 Billion valuation during its up cycle. With 21 million shares fully diluted, you can guess where that would be. Obviously, if they lose their union concessions then things would get dicier. I doubt that happens because it has been thrown out twice but you never know.
Spot gold down -25/oz or -1.6%. Spot silver down -2.5%. GDX/ GDXJ both down about -4%. (DJIA rallying +70!) Hussman's crying. Paulson's dying. Cinderella's firing up the sweeper, and I think I'll join her.
I expect closing and opening prices are quite relevant. Note the 80/20 rule appears in effect too, I think. $7.20 was a logical stopping place, just like $5.80 was.
I still can't bring myself to buy here though, due to the possibility YRCW may need to retest the 50SMA, or even retest lows if the broad market goes into a correction.
"Look, I know a lot of people are selling. What I wanna know is, 'who's buying?' "
Miners:
I think it's short-term traders like you who are hoping for a rebound tomorrow and who will sell if no rebound takes place to those short-term traders who skipped today and will want to try their luck tomorrow...
Gold/silver:
Central banks with a simple policy of trying to keep hard assets as a fixed percentage of their paper assets.
What I find fascinating is that while in 2008 there was a very good reason for the miners to get totally trashed -- banks and hedge funds were selling EVERYTHING to raise the much-needed dollars, the current destruction of the mining sector (which brought PNPFF back to its 2008 lows) has no grounds whatsoever, considering the steady printing of $USD that is happening right now. I can't classify it in any other way than a pure miracle.
David- I know you probably didn't see it, but there was what I thought a pretty credible guy on CNBC basically saying 1/2 of the juniors will be gone in a year or two. Increased production costs and the 'easy' money for them is gone. Also, did you ready the comments about the MUX lunch the other day? YIKES!!!
mark - whenever i hear blanket statements like that from the CNBC guy you're referring to it makes me want to get bullish about what they're dumping on...
Who's going to benefit from $2.80 copper? Skate to where the puck's gonna be, right?
Of course there's no guarantee copper will drop that far, but housing in China and Europe are saturated at the moment aren't they, or not? US housing seems to have picked up thanks to low rates and SPECULATION? How much do banks still have plenty spooled up they've been withholding?
And then there's the chart, geometric target, which we know can fail but it hasn't yet.
How to be a contrarian without losing your shirt.....
TOF- No, this guy wasn't like that at all. He said great returns were to be had but you had to be VERY careful about who has enough money etc. Just look at what has happened to MUX. Crikes, read the notes at Sista'. MUX is in a real bind...and that with the 'best' mining cat at the helm.
The situation with MUX was obvious, and that's why I sold it it as soon as I learned about Argentina blocking funds. I don't know why anyone stayed long MUX after that. That is a single story, however.
The recent price destruction of the mining sector has nothing to do with juniors running out of funds. If you overlay the charts of GDXJ and GDX since the bottom on May 20, 2012, you'll see that they look IDENTICAL. This means that the majors have suffered as much as the juniors have, despite having fat profit margins. Something else is at play here...
Could be a good entry point if this is the start of a new bull market. Same thing happened in NOK, FSLR, BBRY, GMCR, CZR etc after they came out of their bases. They all had really rough pullbacks of 30% or so then went on to huge gains.
TOF, standard convention for retracement levels is off of lows and highs, not closing prices. In any event these levels are areas of interest as you know.
I think Mark is right in saying that half of the junior miners go bankrupt. You need to think of junior miners like dotcom companies in 1999. Many of them never should have been created as their business plans are faulty (poor mine, poor infrastructure, permitting / environment issues, lack of funding, etc.), but many went public because they could. You have no idea how easy it was to raise money for a junior mine in Canada a few years ago with companies like Pinetree and Sprott flush with cash. Canada really is a good environment for taking a mine public, just like Silicon Valley for tech startups.
He is also right in that picking the right companies going forward will be key. I just wonder if you want to even bother when their are much better odds elsewhere and you are competing against the Canadian mining establishment to pick winners. In a bull market, it great, but in a tough market, do you think you really know more or are better connected than guys like Cara and Sprott? And there are lots more of them.
It's the same reason I don't invest much in high-tech - too competitive. JDSU - $3 billion market cap with 11 analysts. ORI (insurer) - $3 billion market cap, 1 analyst. Where are you more likely to find a stock pricing discrepency?
http://www.kitco.com/charts/livesilver.html
ReplyDeleteThe sheeple are being taken to the cleaners by banksters manipulating the mining ETFs. Now is NOT the time to sell! The big boys (whatever the ---- that means) are selling it to buy it.
DeleteThat will be $27.
Is this going to cost me $39?
DeleteI wanna know if the post was deleted.
DeleteStill rockin'. The average censor has more important things to worry about right now.
DeleteOr maybe they all agree with the rant.
Delete$KOSPI - This one sank last night. Perhaps the munchkin is having an effect?
ReplyDeleteNUAN - I'm thinking of this one, speak up if you don't like it!
EHTH - Underperform -> Buy
ReplyDeleteRithholtz: " America does not have a debt crisis, she has a Pundit Crisis."
ReplyDeleteAmen to that Sista!
CP- I don't know anything about NUAN...or much else for that matter!
ReplyDeleteYour caution gives me pause, but I must consider your circumstances differ from mine.
DeleteBGCP - Taking half off here.
ReplyDelete[7:00am ET] Good morning, Geoff here.
ReplyDelete'Gold miners update:
'I have written extensively about the negative sentiment towards both metals and miners at the early March lows. The data at the time was typical of what happens at lows - oversold price oscillators, horrible sentiment, bullish Commitment of Traders report and an extended cycle - so, I continue to see early March holding as the lows in both metals and miners.
'However, after taking a quick jog around the web, I can see that not many others agree with me. Former bulls have gotten completely worn out and doubt that the bull is still alive even though they admit that the fundamentals are bullish for the yellow metal. Without a quick rally out of the lows, I can't blame them.
'Over the past decade, we have seen price both rocket up from significant lows as well as meander for a while before moving higher. As long as price does not break the March lows, the current action is not worrying me at all. As a matter of fact, even though most people dumped their mining shares at the lows, some continue to sell miners and buy into the "all-time high" stock market. Long time readers know that I wrote about going long the stock market at the November lows and have been long since, so I am not negative on the equity market, but it is my opinion that the biggest gains moving forward are going to be in the miners and people are going to miss out because they are worn out.
'If price continues to chop in sideways action, more traders will leave the space thinking that they will get back in when it looks better. The only problem with that is, if I am right, they will end up being late as the miners experience a stealth rally. The longer the base builds, the stronger the base.
'You can see that we are expecting a low sometime within the timing band so this morning's weakness is not unexpected. Simply watch the support and resistance levels and trade accordingly.
'I can see it now, the stock market rally takes a breather in May only to see the metals rally hard with many not having made the the switch.
'Keep your eyes on the prize.'
Eyes on the prize. Good one.
DeleteI in fact have eyes on the miners.
DeletePM's could be embarking on a decade of downside?
DeleteOh yes...the "stealth" rally....seriously?
DeleteI don't about you, but May isn't even on my mind right now. I can't really dismiss April entirely.
Delete"Gaming: Macau March revs up +25.4%, record month"
ReplyDeleteSomeday, bro. Macau must be a gas.
DeleteMy wife told me a story she's heard from friends who have visited. Serious players. Some walk in barefoot, with blackened faces and torn clothing, then plunk down a few large at a time.
Delete"Some walk in barefoot, with blackened faces and torn clothing"
DeleteEffective mechanism.
CKH - Was, or was not this one in the $80's a couple months ago, one chart says it was and another says it wasn't.......
ReplyDeleteHelicopters must be out in full force, complete with assist for PM shorts.
ReplyDeleteDip buyers rushing in (miners). I'm not so sure their timing is ideal.
ReplyDeleteWhoa! Another wave of selling in gold.
DeleteGet used to it, meanwhile find something else?
DeleteWell, this open is likely to be sold, feels like bull trap being distributed into.
ReplyDeleteSame setup as last week, buy end of day and sell the morning pop?
BIDU - At least this one is back over $87, perhaps Macau is BIDU territory?
ReplyDeletePKX - I moved my $72.19 bid lower before open, maybe I shouldn't have......
ReplyDeleteAGO - Their still whipping this one around, trying to keep me out.
ReplyDeleteNUAN - Probably low of day right here.
AGO - Looks like IH&S, doesn't it?
DeleteNUAN fundamentals look solid. 5 year top line and bottom line growth is very solid, as is free cash flow growth. I remember I was looking at this about 9 months ago but can't remember what kept me from investing. I think that Cody Willard guy was pumping it.
DeleteWillard's timing is horrible, or maybe he was selling.....
DeleteNLS just keeps rocking. $25 coming in 2 year
ReplyDeleteSheesh yeah, the emphasis on exercise as preventative healthcare will probably keep on pushing it, too.
DeleteI regret not sticking with the plan to but it at $2.50, what a great plan that was!
$copper - Geometric target is $2.80, Peter Brandt.
ReplyDeletePKX - In at $71.80, wish me luck!
ReplyDeleteI like this.
ReplyDeletehttp://www.ritholtz.com/blog/2013/04/what-i-am-thinking-about/
"• Consuming more information does not help you make better decisions — rather, it helps you be more confident about bad decision you are making. (Sounds like a Jesse I know)
• 9/11 was 12 years ago; 1987 was over 25 years ago.
• Blah blah blah Euro blah blah blah Cyprus blah blah blah ECB.
• CEOs who cite” Uncertainty” are kidding themselves. They are ripe to be disrupted, see their companies marginalized and their best employees stolen from them. (They have my gratitude)
• Pick three money losing blogs to remove from your RSS feed, blog roll and daily routine. (Buh-bye) (who's your Sista?)
• This remains the most hated rally in Wall Street history (TBP 2009).
• It is exceedingly difficult to change the world. It is apparently impossible to change human nature."
Sounds upbeat, to me. So unremarkable, bears hyperventilating in the rear view mirror while the market rips them a new one.
DeleteLOL, NATI's CEO did just that, cited uncertainty. AA's CEO claimed the market was in error.
DeleteVLCC's hurting
ReplyDeletehttp://www.bloomberg.com/news/2013-04-02/frontline-rejects-oil-cargoes-amid-rout-in-tanker-rates.html
Articles like this often mark a bottom, change the title to "Home builders" and backdate, as an example?
DeleteDoesn't say anything about retiring of older ships or potential effect of US energy boom, and they want people to actually pay for articles absolutely void of comprehensive analysis?
VLCCF backs up a possible bottom thesis here up around 40% ytd. And TOF has been talking about shippers for weeks now.
DeleteSame with you CP about NUAN, was surprised that you had not bought any.
NUAN - F'in, the old guy beat me to NUAN!!!!! He was buying while I was pondering. Now I gotta buy IEP, I guess.....
DeleteDid not know Ichan was invovled.
DeleteAGO - Current trading range from $19.80 to $20.20 and ready to break to the upside, I can feel it.
ReplyDeleteMarch gold low is 1566.90 Jun contract and Feb low is 1559.80. We may get their today!
ReplyDeleteI keep looking at VNM, but can't pull the trigger.
ReplyDeleteSorta looks like upside down bear flag to me. Which would place it in the bullish formation category, wouldn't it?
DeleteMight coil a bit more, and put in another higher low, or could vault higher, really hard to say.
DeleteAsia's been giving me mixed signals lately, but $KOSPI hasn't broken down so I'm remaining positive.
MU - This one supposedly got beat down on the Korean scare as well. I didn't know MU had Korean production, good on them.
ReplyDeleteMUX - Right at the intersection of 20SMA and upper trend line.......
ReplyDeleteX - Downgraded yesterday:
ReplyDelete"More downside: cutting PO to $14, reiterate Underperform
While shares have fallen to near nine-year lows, we see more downside as
investors digest a deteriorating earnings outlook, and steel prices fall with iron
ore. Most competitors (NUE, STLD, AKS) are cutting their cost structures, while
we see only small improvements ahead for U.S. Steel. Without positive catalysts
from selling European ops and with April scrap prices dropping, we expect X
drops further. Our new $14 PO (down vs $16) uses an average 7x EV/EBITDA
multiple on ‘13-14E (previously 6.75x 2013E)."
Intestinal fortitude
ReplyDeleteSubmitted by xyz (3 comments) on Tue, 04/02/2013 - 13:09 #118738
Vad disagreed with bullish precious metal miner calls at the 2011 conference. Bill said if you don't have the intestinal fortitude to be in the junior miners for the next several months, you should not be in the sector.
If gold goes to $1200, which is at or below the true cost of production for the miners as a whole, then they are pretty worthless. So perhaps that issue should be discussed when discussing that the precious metal miners trade at very reasonable metrics.
Also, in the WIR there are recent comments that there is no reason other than implied manipulation, to explain how the industrial metal miner sector is holding up compared to the precious metal miner sector. I disagree, they have different risks, only precious metal miners go down if gold goes down.
I used to post as Menock, but I eliminated my OpenID identity to attempt to stop obsessing on content like what is on this blog,
Menock
A Few Questions For Bill
ReplyDeleteSubmitted by sps50trader (11 comments) on Tue, 04/02/2013 - 12:46 #118735
Bill,
Every now and then someone asks a question that may not be easy to answer, and we all hate getting those questions, but I hope that you will allow me to ask a few of those questions... I also have a few examples below as well to help illustrate my points.
First, I have been right there with you for a long time now (keeping a bullish mindset long-term on Precious Metals and Miners and refusing to capitulate when necessary), however there seem to be a lot of confusing developments taking place in the Precious Metals that I am finding hard to understand. I have been following your blog for a long time now and a little while ago you posted that you believed a rally would take place in the Precious Metals area beginning on April 1st. In your WIR that you posted this past Sunday I believe you revised that opinion (understandably) saying that the rally might begin starting in Mid-April. Today you said that: "I can see it now, the stock market rally takes a breather in May only to see the metals rally hard with many not having made the switch." You also said in today's blog that as long as GDX can hold it's March low then you will not be worried. I am wondering, what has changed about the market that has caused you to push back your prediction on a rally taking place in the Precious Metals and Miners? Obviously the prices have gone down, but you also had been predicting that that would happen and that lows could be re-tested. However, those are a lot of revisions in a short period of time and I am just wondering if you think something has changed in the market or if you might not be quite as confident in a major rally as you were before?
Second, you mentioned that if GDX does not break below it's March lows then you will not be worried. Personally, I am less worried about GDX holding it's March lows and more worried about select Precious Metal Miners (ones that I like and you also have mentioned that you like and are long) holding their March lows. It appears to me that the recent sell off in GDX has forced many impressive Miners to threaten to break their March lows. It seems to me that GDX still has a fair amount of room to go down before it hits it's March lows (approximately $0.72 at the time I wrote this post) and going down that much more will likely force many very impressive Miners to break below their March lows. For example: SLW set it's intraday low in March at $29.66 and today (at the time of this post) it has already crossed well below that point and reached an intraday low of $29.53. If Precious Metal Miners, such as SLW, that you endorse (and I fully agree with you that SLW is an amazing company) have already broken their lows, will that force you to reconsider which Precious Metal companies you would want to invest in if a rally occurs in the Precious Metals? Do you still think the Miners will be the year's top performers if new lows are formed? If new lows are formed will that push back your estimate on when a rally could occur?
Third, it appears that GDX's bollinger bands are tightening and that a breakout to one direction or another is likely, does that affect your forecast at all?
I know that these questions are very difficult to answer as you can never quite be sure what is going on in the rest of the world, or why other people act in the manner that they do, but I hope you wouldn't mind answering some of my questions as they are probably questions that other people are also considering. Also, I know of course that when it comes to predicting the direction of the stock market it is all a guessing game, so please understand that my questions pertaining to your predictions are not meant to point out mistakes, but I am simply asking if your mindset has changed at all.
Anyone else can feel free to chime in and post their thoughts.
FD: I am long select Precious Metal Miners.
Why doesn't someone ask who's selling their gold to central banks and if this was a reversal indicator?
DeleteADM - Remember last Summer's drought and the beating this one took?
ReplyDeleteAmazing, huh?
I can't shake off the feeling of a divine intervention taking place with the miners. Last week, after a session of morning meditation, I realized that infinite consciousness doesn't care about the stock market, about making or losing money. Moreover, I realized that if I were "rich and successful", it would be REALLY hard for my consciousness to distance itself from the aggrandizing thoughts arising in the mind. So I figured that if I want to stay in touch with the infinite consciousness, rather than get pulled into the egocentric identity created by the mind, I have to distance myself from the stock market. So I did it, and I said that I'll let God manage what remained of my portfolio. The very next day silver crashed through its March lows and has been going down ever since. The hand of God can be pretty heavy sometimes...
ReplyDeleteWhat is your intention? If being prosperous would disconnect you from the source and yourself, then will poverty do likewise? If one is true then so is the opposite.
DeleteWhat are you going to choose? Not choosing is a choice.
After observing my mind closely for the past year I noticed that during the brief periods when my port was growing, the mind was full of thoughts of how cool/smart I am and of the good life that lies ahead. These thoughts were preventing me from seeing life as it really was, being at one with the flow of reality. On the other hand, when things were not going well with my port, the mind was not building any palaces and did not have any expectations of the future -- it just stayed focused on what was happening at the moment, since there was nothing cool for it to imagine/desire. Living in imaginary palaces filled with more expectations (and fears of these palaces breaking down) is pretty draining. Why not just live in reality and do what reality demands at every moment -- not being a servant to the mind but being a servant to God/reality? In the latter mode of life the concept of failure cannot even arise, since I am not trying to get anything for myself. Every day is a successful and a happy day.
DeleteI just glanced at the 1 hour chart of S&P futures:
ReplyDeletehttp://www.finviz.com/futures_charts.ashx?t=ES&p=h1
A beautiful chart with a steady sequence of higher lows. Until this sequence is broken, there is no reason to even think of going short. Many others are probably thinking the same way -- hence the complacency that Jesse noted in his update last night...
BRKB jsut sold for a 400% gain. Longest position I ever held.
ReplyDeleteMy intention is that YRCW is my new BRKB, I hope it is as good to me. But generally I do not believe in HOPE when it comes to the markets.
Most of my remaining positions suck, and thinking about selling all.
DeleteIt will be disappointing if YRCW preaks below 6.86 as that would be a complete failure of b/o, the 50ema sits around 7.
addidos amigos
breaks below 6.86
DeleteT3 - I don't think YRCW honors any technical setups right now. The issue as I mentioned last night is the convertible notes are most likely adding pressure to the stock. However, I've seen plenty of stocks power through convertible notes and in my opinion, the conversion of those is a good thing as it substantially lowers interest expense (and increases EPS) and total debt outstanding. I think it will take time for this to play out.
DeleteThere are two other risks:
(1) ABFS is bringing YRCW to court for the 3rd time to try to get their concessions from the unions revoked. I have no insight on this whatsoever but my hunch is they're doing it to bolster their own argument for getting concessions granted (i.e., well you guys granted YRCW concessions, why not us?). But I really have no idea.
(2) Network improvements - these were hinted at in the presentation at BB&T in mid August and the company proposed these improvements to the union a couple of weeks ago. I think the company can be successful without them as I wasn't factoring these in but if they get denied the market will probably react negatively in the short term.
Ultimately, they need to post a positive EPS quarter. I think they do that this summer. Until then this is basically a penny stock that will fluctuate wildly. It trades at an absurd valuation but there are still risks and people aren't willing to jump in with both feet yet. A positive EPS quarter will go a long way toward that.
Even if this goes to $5 again I stand by my belief that this is one of the few remaining stocks out there that could be a 10 to 15 bagger from here. I think it peaks out at a $2 Billion valuation during its up cycle. With 21 million shares fully diluted, you can guess where that would be. Obviously, if they lose their union concessions then things would get dicier. I doubt that happens because it has been thrown out twice but you never know.
DeleteTOF, gracias for your thoughts and insights.
Deletehttp://www.bing.com/videos/search?q=gracias+&view=detail&mid=2489C322D9F632F1F7282489C322D9F632F1F728&first=0&FORM=NVPFVR
Spot gold down -25/oz or -1.6%. Spot silver down -2.5%. GDX/ GDXJ both down about -4%. (DJIA rallying +70!) Hussman's crying. Paulson's dying. Cinderella's firing up the sweeper, and I think I'll join her.
ReplyDeleteRYPMX at the close.
Look, I know a lot of people are selling. What I wanna know is, 'who's buying?'
DeleteCB's are buying, they sold just prior to the decade-long rally?
DeletePKX - I'm waiting for Ichan to follow my lead, with an announcement in AH....
ReplyDeleteLong TZA on close
ReplyDeleteGM - Closed green despite claims that pickup sales disappointed, eh? Off the high, but better than $27.80
ReplyDeleteBofAML 5 Yr. Est. Growth 16.20% - Is this forecast overly optimistic?
"General Motors Company: Good enough for now, more still to come
DeleteApril 01, 2013" 12mo PO $35
HXM - Elephants crapped at quarter of 4:00
ReplyDeletehttp://www.dcvelocity.com/print/article/20130402-abf-teamsters/
ReplyDeleteThis is what I was talking about. Looks like 4/10 and 4/19 are big days, although I'm not quite sure we will know of the outcomes on those days.
Perhaps the outcome will be reflected in share price, the question is if the initial move will be an head fake?
Deletei don't know if people use closing prices on retracement levels but YRCW hit the 50% retracement today at the close. $5.85 > $8.7...50% is $7.27.
DeleteI expect closing and opening prices are quite relevant. Note the 80/20 rule appears in effect too, I think. $7.20 was a logical stopping place, just like $5.80 was.
DeleteI still can't bring myself to buy here though, due to the possibility YRCW may need to retest the 50SMA, or even retest lows if the broad market goes into a correction.
"Look, I know a lot of people are selling. What I wanna know is, 'who's buying?' "
ReplyDeleteMiners:
I think it's short-term traders like you who are hoping for a rebound tomorrow and who will sell if no rebound takes place to those short-term traders who skipped today and will want to try their luck tomorrow...
Gold/silver:
Central banks with a simple policy of trying to keep hard assets as a fixed percentage of their paper assets.
How about longs constantly selling puts, in an effort to reduce their cost basis?
DeleteWhat I find fascinating is that while in 2008 there was a very good reason for the miners to get totally trashed -- banks and hedge funds were selling EVERYTHING to raise the much-needed dollars, the current destruction of the mining sector (which brought PNPFF back to its 2008 lows) has no grounds whatsoever, considering the steady printing of $USD that is happening right now. I can't classify it in any other way than a pure miracle.
ReplyDeletedavid - all industries go through cycles. you know this. the mining bull market was well over a decade long.
DeleteDavid- I know you probably didn't see it, but there was what I thought a pretty credible guy on CNBC basically saying 1/2 of the juniors will be gone in a year or two. Increased production costs and the 'easy' money for them is gone. Also, did you ready the comments about the MUX lunch the other day? YIKES!!!
Deletemark - whenever i hear blanket statements like that from the CNBC guy you're referring to it makes me want to get bullish about what they're dumping on...
DeleteWho's going to benefit from $2.80 copper? Skate to where the puck's gonna be, right?
DeleteOf course there's no guarantee copper will drop that far, but housing in China and Europe are saturated at the moment aren't they, or not? US housing seems to have picked up thanks to low rates and SPECULATION? How much do banks still have plenty spooled up they've been withholding?
And then there's the chart, geometric target, which we know can fail but it hasn't yet.
How to be a contrarian without losing your shirt.....
I'm just trying to think this through......
TOF- No, this guy wasn't like that at all. He said great returns were to be had but you had to be VERY careful about who has enough money etc. Just look at what has happened to MUX. Crikes, read the notes at Sista'. MUX is in a real bind...and that with the 'best' mining cat at the helm.
DeleteThe situation with MUX was obvious, and that's why I sold it it as soon as I learned about Argentina blocking funds. I don't know why anyone stayed long MUX after that. That is a single story, however.
DeleteThe recent price destruction of the mining sector has nothing to do with juniors running out of funds. If you overlay the charts of GDXJ and GDX since the bottom on May 20, 2012, you'll see that they look IDENTICAL. This means that the majors have suffered as much as the juniors have, despite having fat profit margins. Something else is at play here...
Stopped out of CEF today and close on GDX
ReplyDeleteNAT- Wow, what a disaster.
ReplyDeleteCould be a good entry point if this is the start of a new bull market. Same thing happened in NOK, FSLR, BBRY, GMCR, CZR etc after they came out of their bases. They all had really rough pullbacks of 30% or so then went on to huge gains.
DeleteTOF, standard convention for retracement levels is off of lows and highs, not closing prices. In any event these levels are areas of interest as you know.
DeleteStill way above it's 52wk low, the market has been more than kind to a company that looks doomed.
DeleteMaybe NAT really isn't doomed, just wounded, eh? Wonder how many years the impending rally runs, once it starts?
Look at the sectors....
ReplyDeleteDefensive issues making new highs.
Transports, r200 down toward former support.
Time to watch our stops and pay attention to Jessie's missive.
Too soon to short but time to be cautious.
I think Mark is right in saying that half of the junior miners go bankrupt. You need to think of junior miners like dotcom companies in 1999. Many of them never should have been created as their business plans are faulty (poor mine, poor infrastructure, permitting / environment issues, lack of funding, etc.), but many went public because they could. You have no idea how easy it was to raise money for a junior mine in Canada a few years ago with companies like Pinetree and Sprott flush with cash. Canada really is a good environment for taking a mine public, just like Silicon Valley for tech startups.
ReplyDeleteHe is also right in that picking the right companies going forward will be key. I just wonder if you want to even bother when their are much better odds elsewhere and you are competing against the Canadian mining establishment to pick winners. In a bull market, it great, but in a tough market, do you think you really know more or are better connected than guys like Cara and Sprott? And there are lots more of them.
It's the same reason I don't invest much in high-tech - too competitive. JDSU - $3 billion market cap with 11 analysts. ORI (insurer) - $3 billion market cap, 1 analyst. Where are you more likely to find a stock pricing discrepency?
Credit Swisse downgrades gold, silver and copper.
ReplyDeleteADP employment leaves something to be desired, I think is what I heard.