Almaden Minerals (AAU)

What do we call this Beuller? Yes Beuller, blue sky... we call it blue sky.  Funny thing is that the long undervalued exploration sector continues to go bonkers - for the quality stuff at least - while premier index HUI merely maintains its epic all time highs breakout.  Sort of like the exploration sector is jockeying to lead the bubb... blowoff, eh?  I think I should sell something.  Dohhh.

Edit (4:00)  Sold a minor portion of AAU and immediately shoveled an equal amount into a core candidate that is testing a breakout with a nice bullish looking flag.  Subscribers, you know which one because it was highlighted yesterday.  I don't know, I am a chronic balancer... ohhhmmmm. Remain balanced, centered... ohhhhmmmm.

Incidentally, for those who would proclaim we are in a bubble blow off right now - and really, my jaw is dropping watching these things (there goes Sabina) - consider that this is happening with the USD at a potential important high, with the HUI having declined from 588 to 530 over the last couple weeks, not too far above the epic breakout point.  Where are bubble blow off dynamics Jerry? SHOW me bubble blow off dynamics!

The Billion Prices Project @ MIT

Thank you to NFTRH subscriber 'K', who sent along a link to this really neat measure of daily online prices by the brains over at MIT, who are collecting online price data on a massive scale.  This to be compared to the official CPI.  Sort of a Shadow Stats for geeks.  Check it out.

Daily Prices Index

One thing I would note is that 'prices' are not inflation (or deflation).  But they are the thing that the herd is going to get hysterical about.  As noted to 'K' in response, my work exists in the vast gulf between the two poles.  There is a possibility in play of an inflationary blow off (that's where the 3 Snowmen come from) with a rapidly fading (if not totally kaput) prospect of an interim deflationary impulse. 

Ticky toc...

The prospects of the 3 Snowmen did not quite melt down even with Uncle buck over 81... Not only have I not sold anything, I have net added over the last week (and today) on the teeny weeny little possibility that the knee jerk into the USD was cooked up, if not by will of man, then by the beautiful symmetry that is the macro Ponzi scheme.

Tick toc...

I mean really, it does not feel like the USD is projecting a deflation event just yet, does it?  Especially emphatically UNconfirmed by the gold-silver ratio as it is?  One's mind might turn to thoughts about all that room USD has to decline before the next bout of QE2 outrage and rebellion against the Fed stirs up.

Da Boyz on da floor...

Da wittew birdie tweets (no, not silly Twitter, the old fashioned way): Word from the floor here on '1st Notice' day... 'unprecedented number of longs are going to demand physical Dec. settlement in silver and gold.'  "These guys hear things before any of us."

But what do I know, I just hear the tweeting and report it here.

Zacks - "Watch for THM to potentially pull back after gaining 5.83% yesterday"

Watch for International Tower Hill Mines to Potentially Pull Back After Gaining 5.83% Yesterday

Err, I don't think so Zack.  High quality gold exploration and development stocks like FRG/XAU, VEN.TO, RBY, KGN, AAU, etc. have been getting bought out, merged or are just plain old launching on good drilling.  I am starting to feel like it is 1999. THM up another 9% and yesterday's non-over bought MACD indicated it could launch higher short term.

Gold This Morning: New All Time Highs in EUR, GBP & JPY --Jon

Overnight trade has been active and higher with hardly any precision as reachieving each prior peaklet needs classic hand-to hand combat; the sellers are not making it easy, no sir. As the headline indicated the new 'strong dollar policy' has an immediate unintended consequence and my new European delivery Porsche will only cost 94 ounces of gold today instead of 100 ounces two weeks ago. Meanwhile the underlying facts remain benign...The GSR remains steady ~50.60. Open interest continues to contract and is back under 600,000 for the first time in a couple of months; yesterday I suggested selling by sissies and short covering but the boyz in the pit offered a view that as the DEC-FEB role is on a number of serious players are minimally reducing exposure for the holiday season...a little too glib for me and I remind you to never short a quiet market. RSI(14) is elevated to ~54 which is essentially directionless. Yesterday the FDIC released a stunning number (to me anyway) that US commercial banks added almost $90 billion in core deposits in Q3 bringing the total to over $6 Trillion (the most in 18 years). This, folks is all our pocket and discretionary money at essentially a negative yield and the banks having closed their prop desks and having no one to loan to are merrily buying USTs and making a nice spread. Wait until after the holidays when they start offering toasters to get you to look under your mattress. Me: just another reason to accumulate gold.

"The People Getting Rich Off the Tin Foil Hat Brigade"

I ceased with this subject a long time ago.  I figure that people should be smart enough to choose their sources wisely and the best a newish newsletter guy like me can do is just keep pumping out the analysis as I see it, b/s free.  That means trying to make actual sensible analysis instead of throwing stones at easy scapegoats like the gold cartel, the Illuminati, the PPT, PTB, master planners and the Wizard himself -- well, maybe the Wizard.  ;-)

But your gains or losses are yours alone.  The markets exist in a very crowded, noisy and heavily gamed continuum.  If you play here, you own your decisions regardless of what the scapegoats may be doing.  Look, Goldman, Morgan and the boyz wrecked our country.  Okay, get out of the markets if you want.  But Jesus, is it not better to take advantage of the way things are than having the delicate Zen required to survive and succeed upset and distorted by ghost stories?

Post inspired by IKN's hilarious and painful screed The People Getting Rich Off the Tin Foil Hat Brigade

Broad Market (SPX) Where we at?

Well to review, if SPX loses the support around 1175 off of this bogus looking daily topping pattern, it is going to 1125.  As yet, unresolved.  But if I were a bear I would be deeply suspicious of the fact that USD is already near 81, Ireland has hat in hand as Europe melts, N. Korea is belligerent, and yet this pig continues to hold 1175.

THM on the other hand, was highlighted...

Right at the breakout point.  THM subsequently holds support zone and hits new highs today.  It does not seem to be overly frightened by Uncle Buck as of yet.  Another quality explorer in a politically stable situation.

Rubicon crossed...

Or in the case of RBY, resistance in the mid-4's is crossed and then some.  I bought the chart last week even before it broke above the solid blue line, due to the bullish 'feel' to the pattern. 

I am bummed out that it was not noted for subscribers in an email update, but then again, that is not the nature of the service.  I did not see a compelling risk vs. reward scenario so I just added it as part of a rebalancing of personal exploration holdings and noted the buy only casually in NFTRH112. We have had several others that have been highlighted and worked out, so....

Anyway, this is what happens when quality gold explorers in safe political regions with major gold mining history (Red Lake) release good results.  Part of the reason I did not note it was RBY's already rich valuation (this is now close to a $1.25B+ exploration company.  Would-be buyers might wish to stalk the stock for support level buying opp's.  As for me, I have not decided whether or not to sell the spike.  35% in 2 days is kind of compelling. 

You see dear reader, gold just does not care

...about the short term noise events, that is.  Okay, so gold was an over bought sensation against the euro several months ago.  We patiently awaited the correction to this condition.  Now, the global monetary game of whack-a-mole says "gold is okay in euros" but needs more correction in its defiled competitor, USD.  So what?  Big picture... ohhhmmmmmm.

Chart guy not buying it...

I go by the charts, yes; but I also go by my B/S detector and at this moment my BSD is telling me "screw the dollar's target (though it's still in the zone), a predictable debt event in Europe - which conveniently comes at a time when USD needed some backers in the confidence game - is no reason to run to US dollars. 

In this episode of As the Herd Sways, we find a knee jerk into the very instrument that was the subject of all those anti-QE screams and screeds, do we not?  Is this not convenient for the would-be QEers?  Will this not shut the anti-QE voices up for a little bit?

'C' down, if that is what it is, continues.  It does not change the fact that the USD and its major competitor are each in deep doo doo.  'C' up for Uncle Buck or no...

Gold This Morning: Morning Rant --Jon

I am trying to understand how 95% of the inhabitants of Ireland are agreeable to pay with their livelihoods, toil, and tears for years to come for the bail-out of the less than 5%, all categorically miscreants, that put them in this position. While all the Euro-hacks and economists who never met a bottom line are patting themselves on the back because they believe they have again dodged a default or restructuring that more appropriately should have skewered their barely liquid banks. I think it's time to let these cheesy, corrupt shaggers get a taste of where they have placed their fellow citizens with a term in Ireland's 4-Star adult facility, Mountjoy, to pick up soap bars of Irish Mist. Gold? Robust overnight volume within a $15 range. Open interest is down about 10% in the past two weeks either shaking out sissies or short covering but that's sizable. Yes, it may seem like we are going nowhere while legitimate euro concerns force USD strength on ill-conceived carry unwinds but I defy you to make a long-term USD strength case. GSR is ~50.80 and the RSI(14) is also back at 50. Just conjure up the image of any of these smug perps picking up the soap if you need reinforcement as to why you are long gold.

NFTRH112 Out Now...

And drum roll please... it tells subscribers that it is NOT SURE OF WHAT TO EXPECT NEXT! :-)

I want to highlight something I think is very important; none of us - you, me, anyone - should take in only one viewpoint or orthodoxy when managing something as violent and multi-faceted as the global financial and asset markets. 

Subscribing to newsletters can be very helpful - and to be honest, if I were not writing one and thus in need of inner calm and peace, I would be subscribed to a couple or few reputable ones in order to cross reference ideas and data points.

But nobody should ever get behind one genius and let it go on autopilot, is all I'm saying.  These are the markets and they sometimes tend not to care what any one mortal happens to think.

That said, the USD has come to our target - yey!  But the crosscurrents are significant and while NFTRH remains on theme, the very fact that the main indicator to the current theme - the USD - has come to target, means that it must now do what is envisioned at said target; namely decline.  We'll just have to see what transpires, and adjust if compelled to do so.

The Speculation portfolio is +34% for 2010 (less than many subscribers, due to my relative ongoing risk management I would assume) and 136% above baseline (9/28/08).

A-B-C down in the gold stocks after all? Really?

NFTRH111 noted "watch for a 'C' leg down of a theoretical A-B-C correction" in the precious metals complex along with the likelihood of a USD 'C' up to target.  Boink!  One 'C' leg comin' up.

Interestingly, a majority of my holdings are either green or around break even today - a net green day so far.  This means either a) the sellers are going to get down to business and tank the bull case next week or b) this is a shakeout and finalization of an expected corrective event before new bull action.

Don't you just love the markets?

Gold-Silver Ratio gets a bounce...

GSR bounces off of a daily bullish divergence during holiday 'weirdness'.  This is a routine spike to be taken with a grain of salt for now.  When we clear the holidays and the latest round of euro hysterics, we shall see what we have here.  d Boys are getting excited, I can just tell.  Will they be right... here? Now? 

Big daddy D is going to be right one day.  But he is not nearly proven so as of now.

Uncle Buck to Target...

USD is right in the middle of the 80-81 target zone.  I expect it to fail in and around here, launching the next and perhaps final phase of the global rally.  That is the current plan, and we will know soon whether it is a good one or not.

Almaden (AAU) - Okay, what now?

Evidently at one point it was Casey, then RevShark @ TSDC.  Now? 

All I know is that this one is a core holding of mine, but things are much different than in the quaint old days when it was not only under the radar, but buried 6 feet under.  One look at the yahoo! message board shows that indeed it is filled with pumping yahoos, one of whom is touting an $8 target. 

So what was it this time?  Was the news on extension of the Ixtaca zone that good or did somebody's herd get the high sign again?

The same general scenario happened with Fuel Tech (FTEK), a core holding of mine years ago as it floated seemingly eternally in the 4-6 range before getting the TSDC pump (via Cramer).  I dumped at 10 and 13 for 100% and 160%, before it ultimately got taken to the mid/high 30's by a bunch of yahoos.  Lesson learned.  I'll stick w/ AAU for now and enjoy the celebrity I guess.  But I really can't stand the way stocks tend to get pumped by various smart Alecks.  I guess it's all part of the process of watching your little children grow up and find out the way the world really works.

Speaking of Fuel Tech, that is another candidate for review in NFTRH112.

Okay, NOW have a great TG and a great Thursday for those not about to indulge!

Singapore - A Cup of Sound Investment?

EWS, the iShares Singapore Index ETF shows a pattern against which bears stand in denial, at least technically.  While I have no interest in broad investment in the US (possible niche manufacturing and technology areas aside) and while a meltdown in the US would certainly have effects the world over, this center of finance and commerce in ascending Asia is worth a look.

And look at it we shall in NFTRH112, which is going to go easy on the TA and theory and look at a few investment opportunities in the event that the current favored plan - bullish into an intermediate bearish - plays out.  With SPX holding our critical 1175 level thus far, it looks like we remain on track.

NFTRH112 will also look at a sensible mutual fund theoretically for all seasons, a Uranium focused ETF fund that finally exhibits the characteristics that I am personally looking for, and a few other things that I find relevant for the times.

Okay, happy Thanksgiving folks.  We got a lot to be thankful for.

Understanding the Fed --Prechter

Big Daddy d Boy Robert Prechter is someone I am often positioned in opposition to, being a precious metals trader and all.  Big Daddy d Boy is also someone I learned a lot from, beginning with Conquer the Crash.  Big Daddy d Boy explains the Fed here.

This is part 3 of an ongoing segment, but what you should do is sign up for Club EWI if you have not already done so.  This is a free, no strings attached service.  There will be no spam or contact from EWI.  What there will be is a complete eBook by Prechter explaining his views of the Fed, among many other things.  It is made up of segments from Conquer the Crash and his monthly newsletter The Elliott Wave Theorist, beginning with 2002's Money, Credit and the Federal Reserve Banking System and ending with December, 2009's The Coming Deflationary Pressure on the Government.

Understanding the Fed - How to protect yourself from the common and misleading myths about the U.S. Federal Reserve

At the bottom of this segment you will find a link to the entire PDF file "Understanding the Fed"

Just download that and get the whole thing.  You know that Prechter is ultimately going to be right, at least in large part, when the inflated system becomes so saturated that it simply expires.  Obviously, the Federal Reserve and its debt monetization tactics are front and center.

DIA - Bullish Target

Remember the Diamond by this monthly chart shown a couple months ago?  Well, here it is updated and its bullish objective is 125.  Oh, but then again, the world is ending...

Gold This Morning: With a Little Help From Our Friends --Jon

Yesterday's mischief was as advertised as buyers defied those that had sold calls (particularly the $1350s) and the squeeze played out like an overly-zealous TSA inspector...bye bye DEC options. Now, the morning-after reality with modest turn-over and no compelling reason to re-establish a directional position as a looong weekend is upon us. The numbers are benign...open interest came in by several thousand on Monday; the GSR is again slightly elevated ~50.20 and still well-away from leading indicator levels warning of liquidity concerns and most likely reflecting the easier tone in the broad commodity patch; RSI is ~55 leaving room for upside momentum. So looking ahead our basis is now the FEB expiration and while our focused Thanksgiving familial buoyancy this weekend could mute much of the insignificant noise from Ireland and points East don't count out an overripe lecture from some newly self-righteous politico spewing the gamut from austerity to bail-outs to goose the market. Absent our bruised shorts from yesterday let's expect low volume and an early rush to the exits today.

'What Korea Means'

Received today from an associate.  I have edited the credentials of the [very informed source], but the source is very informed.  About as informed as one can get in my opinion. 

One of the members of this distribution list  is [a very informed source].

His view is that North Korea does not sneeze without asking China for permission.  Without Chinese assistance N. Korea starves.

Therefore, he believes that the shells lobbed last night were a provocation by the Chinese, in response to our rhetoric and our policy moves.

Shelling would also scare investors away from Asia and the RMB.  Given China’s inflation problem that is the idea.

There is also little doubt that Washington DC will get the message.  The Chinese are pissed at what we are doing.  The shells reflect that.

Food for thought.

S&P 500 fills gap...

...and now must hold noted support or it is going to 1125.

Gold This Morning: Full of Sound & Fury, Signifying Nothing --Jon

Artillery shells, Irish stew, insider trading, clueless administrators and politicians...all have impacted the $12 range on decent turnover in gold this morning and you can categorize all of it as meaningless noise. All you should focus on is that today the DEC options expire, open interest as of Friday actually came in ~3,000 contracts, RSI is neutral to attractive, GSR is slightly elevated but well in the range. If indeed as we have expected the furry fellows downstairs are leaning on the expiration since as of this morning $1350 options are 3 to 2 to the call side we should expect some relief later this morning or surely tomorrow. However let's throw out a few timing caveats...The FEB options which come into play tomorrow are typically overpriced due to the number of holidays, short trading sessions, and a seasonal absence of 'qualified' traders in December. So be mindful of decay creeping up on you as you celebrate Black Friday with the FED-energized American public ready to clear the shelves with inflationary zeal and prepare to roll sooner rather than later into APRILS and have 'time' on your side...always a plus when your vision may be cloudy.

'A Different Kind of Deflation'

The top item on the list today is a PDF file of Clif Droke's latest submission A Different Kind of Deflation.  I thought it was a pretty good journey through the past with input from two elderly gentlemen about the Great Depression era as compared to today's 'Great Recession' (and its policy-induced 'price' pressures).

What really caught my attention however, was the inflation/deflation sequence and timing that Droke puts forth as the sequence at least, matches my own work.  As to timing, he is a few months further out for a coming deflationary melt down - into 2012.  Whereas I have got an 'intermediate' deflation issue cropping up after 4 months or so of inflationary fun - culminating quite possibly with a final drink at the punch bowl and a vision of the '3 Snowmen' (888 on the HUI for gold stock traders).

But Droke and his long term cycle work agree with the premise.  Interesting stuff.  Take note; this party will end one day because the policy - try though the Fed may - is doomed to fail miserably.  From there, I expect Jon's "great leveling of the global economic and social playing fields" to resume.

Rennaissance Gold (REN.V)

This little feller showed up in my accounts as it was spun out from AuEx Ventures in its biz combo with Fronteer Gold (FRG).  Accounts show zero value and a funny number soon to be replaced by some thus far increasing value and what I have found to be the new pink sheet symbol, RNSGF.  Kind of like a bonus freebie, if it'll ever show up. 

What do you suppose is the underlying meaning behind all these business mergers, buyouts and spin outs going on in the gold exploration sector, hmmm?  Over the last very few months I've got THM spinning out KOR.TO, FRG/XAU spinning out REN.V, AR.TO absorbing Pediment Gold, Ventana being acquired with cash.  I kind of like this.

Gold This Morning: Nothing Has Changed --Jon

Well I am back after 15 days moving around Africa (7 different markets) observing again first-hand that the great levelling of the global economic and social playing fields remain intact. I also find gold this morning sort of exactly where I left it...decent turnover, GSR slightly firmer at ~49.40 but well within the range, and open interest ~630,000. The more pertinent changes are option vols are ~23 up from the high teens and a leading indicator of future eruptive activity and RSI is back under 50, a level that served well as a launch pad earlier this year. This morning: December options expire tomorrow and clearly $1350 has become the line in the sand. $1350 options are running around 3 to 1 on the call side so expect possible pressure as the hairy-legged guys have a significant economic interest to mitigate exercise. Keep in mind that the last major options expiration which occured this past September was a rather robust springboard to higher prices.

NFTRH111 Out Now

As is typically the case, by the time I write one of these letters, let it stew over night, and go back and review/edit/finalize on Sunday morning I am a different financial market player than I was on Friday afternoon when I started thinking about and/or writing the current week's letter.

The blog is a relatively rapid fire forum where an individual trader puts out thoughts - sort of a bulked up Twitter, really.  By the time NFTRH111 was done, I saw the reason why putting in a bearish hedge with silver may have been a good idea in the short term, and why I had a nagging feeling the USD was not done on the upside.  Real, hard work can be very comforting because it provides answers - at least to the question 'what are the probabilities?'

There is a very short term scenario in play, which is intimately tied to a much different scenario in the four month (+/-) run up to an intermediate term scenario that is different yet again, potentially drastically so. 

Then again, I am just a teeny tiny little player in a really big, really noisy macro circus.  Thus, the risk that things do not unfold as currently anticipated will be managed as well.  These are the markets after all, and try as we may, we can't control 'em.

Silver CoT excellent... and I am getting out of dodge...

Or at least that short... Rah rah sis boom ba PM's!!

Speaking of THM...

Here it is updated.  I bought a non-setup bottoming pattern for fundamental reasons in August and then highlighted the low risk technical buy setup in an NFTRH Update.  Still holding every share.  I leave you with the chart and also a promo compliments of subscriber Joe...

Joe's 'coin' probably out does my approx. 32% YTD (cannot get actual calc. until tomorrow) but then I am a chronic risk manager.  ;-)  Have a great weekend.  By the way, my answer to Joe's question was a) Yamana.

Gary
During the past year I've made some serious coin.  I'm blaming you for a large portion thereof.
Seriously, thanks very much for the excellence of your weekly letter.  I also have to mention what a great 1-2 punch when combined with Otto's contributions. I'm looking at replacing Ventana with Yamana or Minefinders.  Do you have a preference?
Regards
Joe

Bought ZSL on Silver's rebound...

As short term protection for gold stocks and one core silver holding, FVI.TO (FVITF).  ZSL is added to a couple other (non PM related) bear positions initiated two days ago.  Feel free to fade if you'r an unbridled bull.  Edit (2:22) And while not a large position, if markets float into the close I will probably not carry this or any bear positions into a light holiday week, when things can tend to levitate.  Boy I love taking small losses!

Bernanke vs. China --Bloomberg

Take a look at the two items from Bloomberg linked here:  http://www.biiwii.com/analysis.htm and consider them stand alone and in conjunction with each other.  To me, this is a picture of the US desperately trying to take the easy way out, while China pretends to play along; knowing full well that with its reserves, it can hold out longer.

I don't know, I just feel kind of embarrassed for us.

Doctor Copper - Writing a bearish prescription?

Bearish divergence by MACD, potential Reverse Symmetrical Triangle, impulsive decline (w/ most everything else) and then rise to test the highs/fill the gap?  All amid over bullish sentiment among the dumb money?  I don't like what I think this quack is prescribing.

Naval Gazing

Edit (8:59) What's wrong with gazing at large war ships, anyway?

People read the blog and people subscribe to its resident newsletter.  There are people accessing this little corner of cyberspace where I put forth opinions; you are not just bits, data packets and servers robotically accessing.  With this in mind, allow me to self-indulge with a response I sent yesterday to a novice investor who inquired about the NFTRH service, with a lot of questions and input.  Her mail is not included here, save for the one statement about silver below.  But following is my response, which especially for prospective NFTRH subscribers, can help give clues as to whether the writer is right for one's particular orientation or not.

I was heavily bulked in the financials and [pharmaceuticals], which were not making me happy, until a chance meeting with a Wells Fargo dude resulted in his comment, "Dump everything and buy silver"

Okay Jennifer, let's try to address each of your concerns, questions, etc.

We were all new to trading once, and the only way to get a feel for it is by DOING it, which you are.  You will make a lot of mistakes along the way and truth be told, we all do - even pro's do, consistently.  But mistakes simply must be limited.  Learn to love taking a small loss and hate taking a big one.  Learn to take a profit, because you earned it.  But also understand your goals for a trade before you enter it, and then try to keep these goals in mind.  Think about balance and the strength that having an ample level of cash on hand can give you; in other words, if things go south you are not all in and frightened.  Depending on the situation, you might even be looking to take advantage.  Most of all, HAVE PATIENCE.  Trading is a mind game, heavily psychological and most of the time your opponent is you, or at least your greed/fear impulses.  It sounds weird but if you can come to an almost Zen-like state in viewing the markets, you will be fine.  But it takes experience... and a lot of mistakes along the way. 

And for heaven's sake, try not to be so naive and trusting, because these creeps will eat you alive!  Nobody knows what will come next and anyone who advises dump everything and buy silver is demanding you take untenable risks.

Please be wary of the silver crowd and its promotions.  While silver can run to amazing highs, it can drop just as quickly.  Gold is much more a metal for all macro backdrops, inflationary, deflationary and much of what is in between.  Silver is more positively correlated to economic growth.  The gold mining fundamental case can actually improve during economic contraction.  Of your stocks, I like and own FRG, FVITF and THM and would like to get RBY at a lower price if possible. 

"My point is, I am smart enough to know I have a lot to learn..."  And that is half the battle right there.  Just do not extend yourself (i.e. don't go all in), the market will still be there when you feel you are ready to manage it.  FWIW, there are financial professionals in the NFTRH subscriber base who do not always know what I am talking about.  But it seems that there is an aspect where people seem to 'get me' over time.  I am trying to promote a more mature way of navigating the markets as opposed to a "look at me, stock pick guru!" kind of thing.

I have been on top of the current correction, but according to my work this correction remains within the context of a large upward move - possibly an epic move.  As of now, this remains a test of the weak hands and nothing more.  But since I cannot control markets and am not a guru, all I can do is update the moment something goes NOT according to plan.  The PM's are very volatile in both directions and again, balance and perspective are called for every step of the way.

There is no 'Uranium is out' or 'Copper is in' because the people who say these tidbits are just thinking lazily.  The market is constantly deciding what is in and what is out.  For me, Uranium was in last summer as NFTRH added several U's during the depths of despair for the sector.  I just unloaded all of them, most for 100%+ profit.  So yes, Uranium is now 'out' for me.  But again, I do not control the market.  I can only control the risk I take on or avoid.

A final note:  NFTRH includes interim email updates during the week, usually focused on individual stock opportunities but also on important market moves and their potential meanings.  For instance, we recently managed the topping of the PM sector and continue to manage the ongoing corrective activity.  Subscribers seem to really appreciate these updates.

So, I hope this gives some answers for you as you try to make your decisions.  I always enjoy receiving thoughtful mail like yours.  The biggest thing you have going for you in my opinion is that it seems like your ego is in check.  It will have to be for long term success.

Regards,

Gary
http://www.biiwii.com
http://www.biiwii.blogspot.com

Dow at a critical point, don't you think?

Just filling gaps or off to bull races once again?

USD has not quite reached the target around 80, but the Gold-Silver ratio (GSR) has remained lame.  Let's keep the bull in play while remaining morbidly fascinated (and mindful) of that yield curve / GSR chart.

And so it begins... to the sound of a laugh track

Bernanke goes behind closed doors with the Republican automatons and the process of laughing at the Tea Party mandate begins.  Of course these are all very serious men with very serious and forthright agendas... Ha ha ha...

I guess Sara Palin has a sense of humor.  Good for her. 

“It’s time for us to ‘refudiate’ the notion that this dangerous experiment in printing $600 billion out of thin air, with nothing to back it up, will magically fix economic problems,” wrote Palin, who said in New York Times and ABC News reports this week that she’s considering a 2012 run for president. 

And then there is this comedy...

Republicans “don’t trust the Fed and see it as rewarding the bad behavior of the opposition,” said Vincent Reinhart, a resident scholar at the American Enterprise Institute in Washington and a former Fed board division director.

Ventana - A window to profits...

An NFTRH update advised of the technical buying opportunity a few weeks ago as VEN.TO (VENGF) came down to support in the 9 area.  I myself did not add any since the position was well balanced to other holdings.  TA at the time said 'if you like the stock, now is the time to buy, not when it is momo'ing upward'.

Well, it is momo'ing upward again thanks to a cash buyout offer.  The heavy fundamental lifting was done by Otto Rock over at IKN since TA after all, can only spot opportunity within the context of fundamental assumptions.  And thanks to Otto, my assumptions were decidedly skewed toward Ventana being a quality opportunity.

One contraction, coming up...

Fed May Hesitate on More Easing After Critics Question Employment Mandate

Even as Barney Frank babbles on pro-QE, one wonders if the Tea Party and the automaton Republican politicians that parrot their mandate understand just how bad it is going to be when Ben's LCPD fails.  There may not be any second chances to revisit this after the cracks turn to fissures turn to gaping sink holes.

Be P.R.E.P.A.R.E.D... they taught me that in Boy Scouts.  I always kind of kept it in mind.

And one chart that says... "Prepare for the worst"

Dear subscribers and blog readers, we are now compelled to manage the potential for the gold-silver ratio (GSR) to get out of control.  Its implications - along with a rising USD - would ultimately be quite good for gold mining companies.  But the interim period would need to be risk-managed. 

If conditions are similar to early 2008 as the chart implies, there is going to be asset destruction far and wide, as the depression takes the next leg up.  Inflationary depression?  Deflationary one?  How about both?  Will we have a strong mandate from the frightened masses to ignore the T Party and austerity people and INFLATE at all COSTS... again?  Or is this the one where the market (and popular sentiment) finally overwhelm Ben, Paul Krugman and all the other people of influence who believe the big picture can be managed by policies designed to sweep the dirt under the macro rug forever?

I mean, the Academic clerk in charge of the Fed is really only doing what the majority expects, is he not?  Gold, in getting roughed up right now while under performing other 'go-go' assets is a good thing as this market is  losing the speculators and players.  One day, the anchor to financial stability will hold true as world currencies battle to depreciate their way out of this mess.

The message of the above chart, if there is any predictive value to it, is to prepare for the worst, do not think you are a player in the face of historic events to come, take stock of what you have and own that is real and beloved, kill off as much debt as possible, have cash liquidity and realize that neither you nor I, nor powerful policy makers are stronger than a long term system, leveraged beyond imagination could be if it is in meltdown mode.

It looks like NFTRH is going to go deeper still into risk management mode.  If GSR turns up, one implication will be that the easy money - off of Hope '09 come Ben's LCPD - has been made for a while.  Another implication, considering the docile GSR taken in a vacuum, the pro-Ben charts of the last few posts and current market sentiment profiles is that a lot of people are set up to be most unprepared.

Two charts that say...

"Move along people, nothing to see here.  The man behind the curtain has got it all under control."

Copper continues to rise vs. gold, implying we are happily on the inflation-fueled economic recovery.

While the equity put/call ratio continues along in its slumber. 

Of course the other way to look at it is that copper has hit an upside extreme in ratio to gold, while remaining below resistance and CPCE continues to indicate complacency on the part of dumb money trying to make back some coin now that they have been lured back into the market.

SLV, GLD & GSR

Although, if I were a d Boy I would try to refrain from chest thumping just yet.  SLV just tried a go green a moment ago and remains strong in comparison to gold.  GSR is lame and gee, you would expect there to be a major spike if Uncle Buck meant business to the upside, liquidity was draining and Armageddon 2 - The Reckoning was on tap.

This chart favors Gentle Ben still...

Okay, I am all posted out.  This is what we wait for folks.  If the markets were easy, if life were easy, we'd lead pretty boring lives.  Keep dem heads screwed on the right way.

And they're off!!

The Republicans won, spending will be cut!!  New austerity to be imposed in America!  Obama a lame duck! Muni's imploding! China's tightening!! Commodities are going down you stupid inflationists!!

As speculated in NFTRH of late, the d Boys are let out of the padded room again.  Here is the thing... my favored investment (as far as stocks go), the gold stocks, will be far better served by economic contraction  than running with the commodity herd.  What is happening now is the flushing out of the herd because as we all know, the majority of inflationists see gold as copper as oil as 'hard assets' of all kinds.  Not to say there is not a global big picture case for the resource trade - in my opinion, there is - but insofar as we get these nasty corrective deflation events, there is only one sector that benefits.

I'll spare you all the theory until we get a handle on just what is happening here, since HUI, GDX and GDXJ have targets that are lower, assuming they do not hold the targets they currently sit right upon today.  The play, if it is an extended and painful deflationary event that visits, is 'gold stocks above all else' after perhaps savage correction.  That was not the case two weeks ago.  Gold stocks were running with the herd.

Don't ya love this?  Hmmm?

GDXJ fills the gap

PM traders will note that the speculative leader has filled a gap...

Maybe this will shut them up...

All those voices bitching about Bernanke's QE that is.  How about a nice US dollar rally right up the a$$?  If I were a paranoid sort, I would note how conveniently timely it is that Ireland is on the meltdown, Muni's have imploded (surprised?), and a Congresswoman is talking about a 100% chance of an attack against the power grid that would immobilize the country (thanks John).

Well, I have personally been living under all of the above fears since 2002 or so, which is why I have a generator, 3 wood stoves, guns, ammo, canned food... you name it.  A real nut.<--- It's a joke, but it is helpful to have a healthy level of anxiety.  :-)  The preparedness however, is no joke.

But pardon me if I do not become terrorized because some governmental clerk is saying scary things, markets are cracking and the US dollar gains the rally that everyone should have known was coming.  So I am paranoid, but I think this may shut the anti-QE crowd the fuck up for a while.

What was that line in Blackhawk Down?

"A hiss means it's close... a snap means they're shooting at us."

"Okay, NOW they're shooting at us!"

VIX - Bear opportunity?

I just found this one updated in the NFTRH chart list.  Have not looked at it in some time. Yikes.

Wonderland...

Yup, that is where you 'invest'.  Go ahead little sheeps, buy those US fixed income assets.  Run for safety!

Treasurys Rally As Fed Defends Easing Measures

"NEW YORK (MarketWatch) — Treasurys rallied Wednesday, as investors sought the safe haven of U.S. fixed-income assets amid concerns about inflation in China and debt woes in Ireland, while Federal Reserve officials defended U.S. easing measures through billions of dollars in bond purchases"

"That's Straight Up Gangster..."

So funny, it hurts...

Critical Point for the Euro (Elliott Waves) - Jim Martens

Keegan (KGN) trimmed

You're sitting there saying hmmm, how can I boost cash amid my less than rosy short term orientation? 

You sell a non-essential cleaner coal stock and trim a bit of a non core goldie.  Then you look over at one of your core holds and you say "now Gary look, you can keep some if you want but nobody was reinforcing you at fitty cents when you first bought it, and nobody's gonna tell you when to take something off the table for your hard work". 

So I trimmed some KGN.  I learned to love taking a loss long ago.  Why not love a profit as well?  Now I can go back to ignoring the remaining KGN shares.  This is all about comfort and strength in uncertain times, no?  Cash makes me strong.

Silver

C'mon baby, torture those momos...

NAAIM Investment managers are really bullish

...and that ain't bullish my friends.  Look at their tendency to be bullish at some very important peaks.  I do believe I am not going to worry so much about picking the exact top (technicals not broken) and begin to look for opportunities to raise cash and take bearish positions.

Graph comes from the highly recommended Sentimentrader.com, to which I subscribe.

Bond Yield nears target...

The Inverted H&S targets around 4.45%.  Hmmm, Ben gets a better rate than he would have just before labor day and even better than he would have on the recent QE2 day.  A great deal if you're looking to monetize debt and create new inflation.  The trick is in finding the right level to buy; rates too low and you are getting a bad deal.  Too high and inflation fears break down the barn. 

NFTRH110 Out Now

...and oy, my head is spinning.  :-)

SLV leading overbought PMs

...both ways.  Silver around 25 and SLV around 24 would be my personal tolerance levels.  Below there and I may want to cry for mama.  Until then, I am a big boy.

Bearish the gold miners?

If so, hey you might be right.  But this chart gives no technical evidence in support of such a stance.  So I shall do what I have done since the slingshot out of the dumpage of 2008 and let the charts keep me strong until such time as they no longer do.  Edit 10:37 TA & good cash management are critical to remaining firm when needed.

VIX

I almost forget that our old friend the VIX existed.  I am sure it will come front and center at some point in the not too distant future as I am becoming increasingly bearish on the intermediate - esp. if the broad markets hold support and the PM's and commodities turn back up.  There is a case for a very bearish 2011, where Prechter will reassert himself and today's greed will be a quaint memory.  We'll look at this in NFTRH110.

But for now, I am not so sure that is a falling wedge in the VIX (bullish for VIX, bearish for market) because I have seen this indicator bullishly flag so many times in the past, only to break down further.  Could VIX be headed for new recovery lows into a 'C' correction leg off of the 2008 climax?  Only your crystal ball enabled market guru knows for sure.  I however, am guessing that the bears are not quite ready for prime time, even considering this week's plethora of negative news and market activity.

Dow at the tolerance level...

16 Historical Photos...

On the news and analysis page (2nd item) is a PowerPoint presentation of 16 great photos, some of which are very famous.  A subscriber forwarded this along with "and I wonder what my stocks are doing???" in the body of the email.

As gold and silver take the hit in pre, and the US markets battle with support and this and that and the other thing crop up from the noise, sometimes a little perspective has a calming effect.

Yesterday we honored our veterans.  Today, 16 historical photos help us realize how small we financial market players are before people who have actually helped change or affect, the world.  Regardless of political or religious orientation, perspective can be gained.

Attn: FOREX jocks: Ready, set...

EWI's FREE WEEK

It's free, no strings (or spam) attached and it is for anybody still interested in whatever the hell value-challenged paper is doing in relation to other value-challenged paper.

Amid the manufactured recovery, some sordid details...

Infographic by Mortgage Rates

Ren Gold (REN.v)

Say, look at this little feller that magically showed up in my accounts this morning.

A little guy called Renaissance Gold, AKA the pure exploration arm of top NFTRH holding (in one form or another - XAU.TO and/or FRG - since the bottom of Armageddon '08) Fronteer Gold.  This happened with THM as well, as it spun off cute little KOR.TO.  Cool.

Dow at support

Best to be patient my furry friends.  Bears that try to impose their will sometimes get trapped.

Thank You

GDXJ-GDX Ratio

AKA more speculative leader vs. more stodgy laggard.  It matters not what triggered the correction... this condition had to be rectified in order to get back to healthy dynamics.

Blog Housekeeping Note...

The blog is free.  The newsletter is paid subscription.  I have made a concerted effort to write clearly in the letter and try to assure I am getting my points across to a varied and global segment of people. 

The newsletter is very serious and the blog is fun, sometimes silly and yes, also serious at times.  But for subscribers, the blog should be looked as an add-on to the newsletter or maybe as comic relief.  For regular blog readers, I hope you get some value.

Here I 'speak' in a voice that is me, and there is a lot of lingo, jargon and implied meaning involved.  It is too much work to try to consistently connect the dots here in an overly deliberate way.  I am sorry, but this is the way it is.  You must be here for a reason, or have turned me off for a reason.  It's the way the cookie crumbles my friends.

I hope readers get the gist (and I know that many readers know exactly what I am getting at) here, but being forced to ask and answer one's own questions is of value too.  So, da blog is what it is and not really going to change.  It can't or else my (in essence) 3 jobs will turn into 4 and dat's not gonna happen.

Junk Bonds? Party mode

These crazies continue to lead speculation... eh, Garth?

Party on Wayne...

So too does the FXI (leader) - SPY (laggard) ratio...

IEI-TLT Ratio says party on...

Garth... Party on Wayne.  Maybe.

Dow settles deeper into support zone...

...as MACD rolls.  Good stuff.  Bad stuff if MACD rolls too far and support & EMA 20 are punctured.

'Why did silver just sell off?'

This is why...

IKN presents a PDF file announcement from CME:

Why did silver just sell off? This is why

The leader got absolutely smashed, and in my opinion this is not a bad thing.

And here comes the GSR!

Which would of course be an, errr. ominous signal.

C.A.U.T.I.O.N

Dear regular, well adjusted folk...

Welcome to the gold markets!  We (me, anyway) have been awaiting your arrival for the better part of a decade now.  Harry Schultz - here by way of a Jim Sinclair email - has been waiting much longer. 

So welcome, and get used to the violence like today's reversal.  It comes with the territory, especially after days when the Comrades In Golden Arms win a media battle like yesterday.

Dear Comrades In Golden Arms,

The Dean of Gold and my dear friend of 45 years, Harry Schultz, utters these very important and milestone words.

Heed the Dean!

Dear CIGAs,

Yesterday, Nov 8, 2010, was a day I've awaited for 40years, since President Nixon shut down the last vestiges of the gold standard. Yesterday, at last, a respected member of the ruling classes called for a discussion to readopt a modified global gold standard as a lynchpin for the monetary system. Robert Zoellick, World Bank President and a former US Treasury official, says a new system is needed (as called for in HSL for 20 years), using 5 main currencies, with gold as the international reference point for future currency values. He wondrously said "Although textbooks may view gold as the old money, markets are using gold as an alternative monetary asset today." I couldn't have put it better and in fact I have put it in those exact words, as has Jim Sinclair and a number of free market analysts.

RZ said "The development of a monetary system to succeed Bretton Wood II launched in 1971, will take time. But we need to begin." Amen, Mr Z and thank you! Also, thanks to the Financial Times for making this the leading page one headline story, despite their traditional aversion to gold. Ethics won! This story broke in the early AM Nov 8th and halted a correction that began in the gold price, after which gold rose to a new high. The story freaked out ruling politicians around the world who despise gold because it acts as a governor on government spending. After Nixon closed the gold window, government spending and deficits rocketed, as the data charts prove, from that exact moment. Germany, the US Fed, and Trichet of ECB all patted Mr. Z on the head, but said it's not practical.

What would you expect them to say dear reader? They will fight a gold-linked system, but in the end they will give in, because the system is dying, fast, as the gold price reflects. How good a new system will be, whether it will have only a symbolic link or a strong one, can't be guessed today, nor how soon. The gold price will tell us. My prediction on Bloomberg TV in Paris a few years ago was that "Gold will force a system change when gold hits $1,650, but that it might need $2,000 to bring a change." That may still come true, because, as you see in the press today, most political leaders tried to discount Mr Z's brave, but wise recommendation.

I shall frame this FT front page and hang it on a wall. It was a watershed day.

Harry Schultz

Gold-Silver Ratio & today's correction

GSR has not confirmed the reversal in the PMs and any hoped for correction in the broad markets.  Not yet.  GSR is hideously over sold and one reason I feel this is ultimately not going to end well, but in so far as one can usually expect GSR to lead high impact events, not follow, there is no signal as yet.