Showing posts with label silver. Show all posts
Showing posts with label silver. Show all posts

Sunday, September 8, 2013

CHART-NADO (SECTOR MODEL RECAP)


Several key things have been in play for months and I believe they will continue to be the leaders in this environment.  We'll update a few familiar charts, but also make sure to highlight the themes that will be the beneficiaries of the same sector rotation model we've based our analysis on for several years.

Let's dive in.



In my estimation we are now in the left middle 1/3 of this graph in that we have witnessed this crazy 4 year rally in stock markets, but just to throw a wrinkle at you, we have kind of limped along in the economic recovery marked with massive repression of interest rates causing some delayed impact within the normal rotation.

My thought is still that Technology, Industrials, Basic Industry, and even Energy are the key winners now and in the short to medium term.  However because of distortions related to interest rates, finance too will benefit from net interest margin spread growth, and they should continue to benefit.  (I'll hedge my bets here and suggest that regional banks and insurance companies will win, while large money center banks may lose as they are heavily dependent on mortgage activity for some of the success.)

I'll just post the charts with little comment.

COP


KMF




XLE




 MRK





PFE



IXN



SOCL



PNC



FITB



XLF



FCX



CAT



XLI



EWC



EEM:SPX



EEM


Emerging markets seemed to have bottomed relative to the SPX and may be the area to watch in terms of "better than" performance.  


SUMMARY
We've had a correction and despite all of the crazy geo-political issues, there are simply strong looking charts and reasons to watch for a good bounce.  Technology, Financials (especially regionals), Industrials, and yes, even cyclicals and emerging markets are the place to invest.  Many of the charts are at support so further weakness would take a prudent investor out of their positions.  This is a good time to re-evaluate all positions, commit to firm stops, or widen them out if you are willing to handle a bit more volatility to ensure you maintain positions.

WILD CARDS AND GEOPOLITICS
The wild card in the context of investing right now is determining a winning strategy in the midst of amateur hour at the White House.  The President is way over his head in the foreign policy arena and his adversaries (foreign and domestic political and national rivals) are circling like sharks.  His mis-steps related to Syria are serious and his weakness here has emboldened challenges from Assad, Iran, Russia, and China.  The correct thing to do for the President now is to simply state we don't know who used chemical weapons and then suggest that we'll wait for more evidence.  Meanwhile he should continue to arm and support the terrorist rebels and engage Assad to the point in which they begin to win.  At that time, our strategy should be to withdraw arms and support till they are weakened.  This approach assures no winner arises and continues to draw the evil black eyes of Iran, China, and Russia to this little spot of dirt in the Middle East. 

Our President must learn that there is no winning in winning and there is no losing if you support and are friends with the meanest and worst strong man as long as he wins and you are committed to giving him indefinite monetary support forever (where are you Mubarak, Obama didn't mean it!).  We've had our Utopian experiments by both Bushes and President Obama.  Clearly the people in this region do not have the same value system and cannot appreciate the same type of democratic approach our country actually used a long time ago.  In addition, we cannot pick winners and losers in the region as most of the time the new guy is a lot worse than the old guy.  

My point here is simply that Obama probably won't take my sage advice and I'm sure his arrogance will be more of a guide in his approach to use a "sterile" volley of tomahawk missiles to soothe his wounded pride.  An attack will result in increased oil and gas prices, refiner losses, gold and silver gains, and an uncontrollable situation.  Keep an eye on it!

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.com/

Sunday, August 11, 2013

CYCLICALS CHART ROUND UP



Until the last week or so, you might have thought that gold, silver, and every metal on earth was worthless.  Chinese real data, or fake data was released and gave the shiny stuff and cyclical stuff a life saving does of drugs to perhaps stave off death for a month or two.  All intra-market analysis I do suggests that we are at extremes in terms of how far the US markets have gone relative to other markets.  It frankly may just be a cycle of cyclicals and emerging markets coming up a bit to bring things in line.  Here we go!

$GOLD


$1340 looks to be the magic number.  If I'd have to guess, I think we'll see a bit more upward momentum and then a slam down here for gold once again.  $1180 looks like support to keep loading up the truck for the zombie apocalypse.

$SILVER


Dare the shiny silver one get back into the channel of death?  Maybe.  If silver can climb just a bit further it has the possibility to go as high as $26, however if my hunch is correct, silver will fail and fall to the high $17 range.

$COPPER



China's latest doctored reports last week seems to be the saving grace for all cyclicals and copper.  JJC may be a nice option for the speculator looking to ride copper's recovery to $3.80.


FCX


I'd feel a bit more comfortable with a pound on the table buy for FCX if it were able to power convincingly over $32.  If it does, $39.00 is back in play.  Go long with a good surge higher.


DD


Nice breakout here for Dupont.  It's hard to buy more here and with any overall market weakness, it is probably time to finally harvest nice gains.

XLI


Wish I'd bought this rather than watching for literally the last 2 years.  There is probably room for this to come down to the $39 area, which at that point would be just another opportunity to buy the dip, until proven otherwise.


CAT


CAT has been the victim of a terrible global growth story.  It has still managed to fight back from the scary free-fall in the summer of 2012 and December of that year.  For all its scratching and clawing to stay above the $80 level it just seems as though a break lower is inevitable.


EEM



EEM, the emerging market ETF looked like someone was going to put it out of its misery once and for all.  The bounce off of $35 was very nice and I fully expect to see an attack on the upper boundary of $42.  Will it succeed in going higher?  If it does, it is game on for all emerging markets and we'll see massive out-performance of them relative to domestic equity markets.

EEM:SPX


Inter-market analysis of emerging markets (EEM) to the S&P500 is shown here.  Since 2011, emerging markets have been under-performing significantly and we've gotten to the point where there HAS to be some reversion to the mean where emerging markets actually post some gains on a relative basis against the US markets.  There really has only been two other times since 2007 that the EEM:SPX relationship has been this low, and in both instances, emerging markets posted monster gains.  Please note, this does not mean that the US markets will go down, it simply means that emerging markets could really outshine and US markets could be seen as fully valued while shoppers choose the potential up and coming asset class.

IDX


As much as I've been a fan of Indonesia for years, the recent beat down of IDX has been heart-breaking and wallet destroying.  There is not option here, if you are a supporter of IDX, it must hold a close over $27 this week; otherwise it is a sell or a short candidate down to $24.

EWM


$15 is a potential destination for EWM the Malaysian etf.  I would look for pretty strong lower support and if it does not bounce, it too is a sell.

EWS


Support for EWS is at $13.25.  A move below this level brings the lower channel into play, almost a full dollar lower.

EWC


EWC (Canada) just looks to be locked in a battle between levels of support.  I think this is a very nice range to trade, however the area where EWC sits now is simply in no-man's land.  Wait for a move lower to $26 or a break higher to short at $29.

EWA


As China goes, EWA goes.  If we see good news from the Asian tiger, EWA will resume its ascent.


EWJ


While not an emerging market, Japan certainly trades like it is.  Abe is showing the Fed its future, and while the threat of unlimited stimulus shocked the market for a time, we are finding that reality always comes back to bite you.  Sell Japan and anything not nailed down in Japan.  Toyota (TM) has had the mother of all moves, I think it is a fine time to sell.

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.com/


Thursday, July 18, 2013

TAPERING.....RIGHT!

I have been very busy tending to so many things I have not had much time to post. I plan on doing a chart bonanza in the next couple of days since we have just finished a very good quarter with some drama thanks to Uncle Ben Bernanke and his pals at the Fed. To think they could even hint at tapering! What a joke.

Ben's tapering threat certainly didn't get received well, but he came back and simply suggested that he was kidding!  I think the tapering talk was really forced on him and will be again as the bond market's rates are rising, and we all know that Ben can only do so much.  In fact, we've discussed often how the Fed actually follows the market, I'm guessing this is some of the same.

Speaking of the Fed, let's go back in time and examine just how things were back in the 1920's leading up to the crash of 1929. It may be instructive and entertaining. I've wanted to comment on all the best of Americana given the court rulings of the Supremes and also the case involving a hooded teenager, but alas, I have no time to comment on things that are simply a distraction from investing and trying to figure out what next weakness in the economy will reveal itself. Enjoy the video and look for more posts in the days to come.


GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.blogspot.com/

Monday, April 15, 2013

ALL YOUR HARD STUFF, IS WORTHLESS!!



SUDDENLY, GOLD, SILVER & BITCOINS ARE WORTHLESS.....
Just when the bitcoin mania was going great and everyone I knew was emailing me about them, blamo!  Goodbye bitcoins!

What specifically happened today to make all assets (excluding paper dollars and bitcoins) much more worthless than Friday?  While I am not stepping in front of this train that is heading south, I find several things quite odd.







WEIRD THINGS IN THIS MARKET OVER THE LAST COUPLE OF WEEKS
First, that everyone in the world could watch oil, gas, and every other commodity collapse and assume that the stock market would continue ramping higher.

That all conservative stock holdings like utilities, consumer staples, and healthcare easily beat small caps and other companies and no one was concerned about the market's path.  If everything is great, why was all the money going into defensive stocks?

That unemployment was greater, housing, was slower, and consumer spending was falling, didn't worry anyone.

That the market reached all-time highs everyday yet emerging markets kept getting destroyed.

Bond markets suddenly were going higher even though the equity markets hit highs.

THOUGHTS ON GOLD AND SILVER
I think gold can visit $1,200 so I'm not moving too quickly to buy this drop.  Longer term, I am betting on physical assets as there is no way Japan can continue their actions without destroying the yen.  If they destroy the yen, the daisy chain of connected global financial entities will pretty much destroy it all.  I'd rather have some shiny stuff than an electronic asset in a bank that can be given a haircut to save a few important financial institutions.  Don't believe me, just ask the citizens of Cyprus.

THOUGHTS ON BITCOINS
Do not do it!  I have not had time to finish a post on bitcoins, but at the end of the day, you don't want to own this very interesting and scary electronic currency.

No other comments are necessary.  By Friday the markets will be back to moving higher, nothing to see here folks!



GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments athttp://www.goatmug.blogspot.com/

Tuesday, March 19, 2013

DIVERGENT REALITY - MARKET UPDATE


Somehow, someway, the markets simply keep moving up.  Perhaps they are climbing a wall of worry.  Perhaps stimulus that is coordinated and assisted by loose monetary policy simply keeps all the plates spinning.  At some point, gobs of stimulus will meet the headwinds of a global financial slowdown in Europe, an inflationary overheating and under performing Asia and Pacific Rim, and a flight to safety from risky assets as smarter money says, "screw this".

ISLAND BACKGROUND
Quickly, let's review a little about Cyprus.  The tiny island attempted to create its own niche economy in Europe by becoming a financial haven.  They offered very low tax rates and an even lower concern for the origins of the global cash horde that was being deposited within their banks.  Cyprus become an outsized financial powerhouse and a haven for money laundering.  Russian gangsters like Putin and his crony oligarchs have hidden massive amounts of stolen money in Cyprus.

Bankers were all too happy to take the money and of course, they had to invest in bonds of other Euroland sovereigns.  They purchased a ton of Greek debt, which of course has been a disaster.  Cyprus' financial condition has been a known problem for a while, but clearly, the ECB desired to act.  As little as a month ago, financial and political leaders in Cyprus stated emphatically that bank institutions were fine and depositor money was safe.  This weekend, this all changed as Cyprus posted documents outlining the "bailout" where the ECB would step in and give approximately $10 billion in funds, but it required depositors to kick in a total of about $7 billion.  Now think about this.  This isn't the bank getting crushed.  This isn't some bond holder or stock purchaser, this is someone that was saving and simply putting money away.  Depending on how much you have, you'd potentially pay anywhere from 7% to 12%, in a sense, you just took a pretty big haircut for being dumb enough to save and trust a bank.

LOCKED OUT
Over the weekend, the people started hearing about a bank lock up and started sharing information about the vote about the fate of their money that was going to be held on Monday.  Clearly the upset people took to the street and wouldn't allow politicians to steal their money and give it away.  As I type, political and financial leaders in Cyprus attempt to walk a very small line where they can somehow appease the ECB and global banking syndicate and yet keep their heads as they have awoken a very interested and angry population.  The Cypriot legislative body will attempt to forge a solution that placates the bankers and limits the impact on regular folk that never had anything to do with Cyprus banking institution's purchases of Greek bonds with their deposits.

Don't forget too that the Russians are the ones that will take a huge hit in this "bailout".  Possibly the ECB calculated that the funds were illegally garnered, but my guess is that Putin and his buddies will not take kindly to a 12% or greater haircut of their stash.  The ECB is screwing around with these guy's personal cache of money, they better watch it.

THE GLOBAL BANK DEPOSITOR'S DILEMMA 
Banks essentially removed the "haircut" from bank accounts almost immediately, and therefore the effective "tax" was confiscated.  As a depositor, what would you do now?  Can you trust the bank?  As a citizen in a Euroland country like Italy, Spain, or even Portugal, are you certain that this would not happen to you?  The outright theft of deposits is simply too easy for governments when they can shut a bank down electronically and remove funds before anyone has a chance to prevent it.  The Cyprus example is surely a scary test case.  So what will they do?  We are hearing that there is calm in other Euro countries and no one is rushing to take their funds.  The better question in my mind is WHY AREN'T THEY?  It only takes a few people to start a panic, reasonable depositors should be calmly removing funds.  Do you think they wouldn't do something similar in the United States given extraordinary circumstances?

I've often advocated that you should have some cash on hand in case banks were suddenly inaccessible and you should also couple that with some physical metal holdings like gold, silver, or even palladium.  Make a trip to the bank today and get enough cash to ensure you could make it through a couple of weeks with no problem.  I'll do another follow post about metals, but is there any way this cannot be bullish for them?

INVESTMENT IMPLICATIONS - EMB:TENZ -




Despite what you are told and what we are seeing, the global financial markets don't like this.  US markets somehow keeps levitating, but that divergence is getting way out of bounds of what it should look like.
Take a look here at the EMB:TENZ ratio chart.  Remember, this is a measure of the emerging markets stocks versus the ten year treasury.  Essentially, this is a measure that show when investors desire risk versus when they want safety.  Emerging markets have been really under performing and in a sense, the 10 year treasury is beating on a relative basis.  If investors were feeling risky, they'd want to go long emerging markets.  As you can see in this view, the ratio of EMB:TENZ has been very good at tracking the SPX (black line behind the red/black ratio) and probably even leading it up and down.  Now look what has happened recently.  The ratio has cratered suggesting that investors don't want emerging risk at all.  Despite the risk-off move, SPX continues to power higher.

RISK ON?  RISK OFF?
This is a slightly different look, which might be better.  It is still the same concept charted with the MSCI Emerging Markets Index against the Dow Jones Treasury Index.  I provided a monthly view and I think it shows how strikingly in sync this relationship is.  The only two questions we should be asking is how long can the divergence remain, and which direction will it resolve?





GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments athttp://www.goatmug.blogspot.com/

Wednesday, January 30, 2013

NO EXITS - GOLD AND SILVER


CONTRACTION?
This morning's release of GDP data suggested that government spending reductions in military have caused a fall in the growth USA's GDP.  The third quarter had a growth rate of 3.1%, the fourth quarter showed a -0.1% GDP.  Inventories are building, and it looks as though alot of "income" was pulled forward to avoid the fiscal cliff and increasing tax rates.

THE FED IS HERE
Despite the stock markets being down just a tad, gold and silver are higher, why?  The reduction reaffirms what we should all know, that the Fed will never exit and cannot remove their stimulative QE which is shuffling $85 Billion monthly of Federal Reserve Notes between different assets like treasuries and MBS.

GLD
Intra-day Gold looks to really like the report of GDP contraction as it's ETF proxy GLD is bouncing.




http://scharts.co/XSeCgL

SILVER 
Silver also bounced.  The key for silver will be to clear through the $32.50 area.  Stock charts won't do an intra-day chart for commodities in my set up, so I'll have to post a chart later.


In addition, here is a view of silver that is a 1 year look.


$36.88 seems a long way away from here, but continued real action by the Fed cannot hurt.  If anything, this continues to provide a very solid "fundamental" base from where silver will mount an attack higher.


GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments athttp://www.goatmug.blogspot.com/

Saturday, December 22, 2012

WHERE NOW WITH SILVER?



SILVER DONE?
Clearly the recent action in the markets has caused many to completely abandon the notion that precious metals are awesome and they now contend that they are dead and gold and silver will become the next prepper's widow maker.  This may be true, and to confirm it, I wanted to examine the charts and also some of the reasons that this would be correct.... and why it wouldn't.

CHART HEADING DOWN....MAYBE
Take a look at the weekly SLV chart.  Some may ask why SLV, the easy answer, is this is the one that I have saved in my stockcharts system, but very importantly, this is what you'd buy if you didn't have a safe full of silver bullion or Silver American Eagles.




In this example we see that SLV did hit near the $35.00 area that we had identified a turn and then melted lower to the $31.00 level where it bounced off it's 200 day moving average (black line).  That strong bounce sure looked good, however the rebound was short lived.

Last week, the $30.00 level was breached and the etf suffered a nasty close at the $29.00 level.  If you were an owner of SLV you'd have to be very concerned that a fall back down into the downward channel through $27.50 would be very, very ugly.

$SILVER
For those of us that hold silver in other forms than SLV, I wanted to put up the commodity silver price up so we could look and see if there were any differences in the chart.



Unfortunately, real silver is already in a downward channel and a similar level of $27.50 is very important.  The close on Friday was actually odd to me in that the equity markets got spanked (if we now call down 1% spanked) while silver was up a tad.

As bad as it looks for silver, there is one shining hope left, and that is that the 14 day EMA is still above the 40 day EMA (on a weekly chart) and the slope of that relationship is still positive (flat to up to the right).  As of this moment, this very long term trend indicator still has a hold on the trade and no sell has been signaled.

WHY NOW?
It has seemed like that ever since the Fed tied their unlimited QE to achieving some job employment number that all precious metals have been falling with renewed vigor.  I'm not sure it that is a result of many suggesting that there is now some end on the horizon of infinite Federal Reserve action and that would somehow tame the beast of inflation that was surely expected to come.  Or, perhaps traders realized that the Mayan calendar prophecy was going to fall on its face and therefore there was no need for extra stores of the shimmering metal.

Another rumored explanation for the recent vicious sell off is none other than that some hedge funds are forced to sell GLD and SLV due to redemption requests.  The famous manager John Paulson has been rumored to be selling his largest positions which do include GLD.  As we all know any significant move in gold will cause silver to move in lockstep with it.

In the last week, Morgan Stanley and Citibank both called on their clients and advisers to sell shares of Paulson's fund and GLD was the single largest holding at nearly 30% as of September 30, 2012 - http://www.stockpickr.com/pro/portfolio/john-paulson/ .

AN EYEBALL'S GLANCE
As I eye ball things, it also seems like the period from October through year-end is always weak for silver as well.  Perhaps it is seasonal.  2011 was up significantly, so we can't say that it works all the time, but hopefully it won't be like October 2008 where silver was completely destroyed and taken down to the $8.00 level.

CONCLUSION
The real story here is that silver has some issues and you'd be smart to look for some kind of bounce at the $27.50 area.  If it doesn't come, the low twenties are easily in play.


GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments athttp://www.goatmug.blogspot.com/

Thursday, November 8, 2012

PRESIDENTIAL THOUGHTS


Our country's voters (and probably a few voters that are not from our country) have cast their ballots and re-elected Barack Obama.  I am not shocked by the outcome of the election, although I did think that Romney might win the popular vote only to lose the electoral college vote, so the end result is the same.

How did we get here?  I'll list a few major themes that allowed Conservatives and Republican's to lose another major election.

NO ONE WANTS A PRESIDENT FROM MASS.
1)  Republican's selected a John Kerry-like candidate for their man.  As wonderful and honest a man as Romney is, he is a Boston RINO from the upper crust of society.  He is soft spoken, cultured, and totally dry.  Poor people and minorities would not give this guy a chance simply because he is typical "white guy" that hates them or doesn't understand them in their view.  Romney could give 100% of his annual earnings to charity and the poor and this would only reinforce to them that "rich whitey" has so much money he didn't even need it.  While we don't want to say it, many of the religious right and the African American religious did not support Romney because Mormanism is perceived as a cult.  It was not until mid October when the Rev. Billy Graham endorsed him that some Evangelicals came into the fold, but I am sure this was an issue for more than a few people.

FALSE PARTY
2)  Republican's are not conservative.  The Republican machine did a pretty good job of co-opting the Tea Party movement in 2010 and essentially neutralizing the threat of those wacky tea-party people.  Right-wing conservatives are waking up to the fact that the Republican party is very similar to the Democrat party on 90% of the issues with the exception of three social issues.  These issues are immigration, sexual orientation, and sex/life issues.  While the Republican's all speak a ton about fiscal control and limiting the size of government, they somehow don't think that applies to two major things as they end each sentence with, "We'll never cut defense spending and don't tax the wealthy".  So, effectively they don't believe in reducing government or fiscal control.   Real conservatives are tired of this bull and the facade that Republicans are their party is falling apart.

47% OR WAS IT REALLY MORE?
3)  47% is really closer to 51%.  Romney said some pretty politically incorrect things when he was video taped speaking to wealthy donors.  The only real issue with what he said was it was correct.  The unfortunate truth is that the demographics are really worse than the 47% he spoke about and we are now entering a stage where I believe it will not be easy to reverse.  When almost 1/2 of the electorate relies on government for some sort of service or income, it is difficult to sell them that "free stuff is not a good thing".  Obama has used the economic crisis to increase dependency and the future is very bleak for politicians that promise austerity and cuts to bring the US fiscal house into order.  Right now, Republicans are saying we'll cut your benefits and Democrats are casting them as evil and promising more help.  If you were the 50% of American's on some sort of government program or service, who would you support?  Another strike against the Republicans is that this 50% is the only group that is growing (having kids or coming across the border).  Hispanics, African Americans, and others have birth rates that far exceed those of conservative whites.  This growing group of voters will clearly vote for candidates and policies that force the wealthy to support them.

A SOCIAL CHANGE
4)  Social issues need to frankly go away in the Republican talking points.  Yes, conservatives love to talk about how they hate abortion, gay marriage, and other moral high-ground issues, the problem is that the US is no longer moral.  Our country is a collection of people that simply desire to distract themselves with sex, sexual expression, drug use, and technological distraction.  As long as they are "satisfied" with cheap food, a home, electronics like cable tv, games, and computer access, a sexual partner, and transportation their basic needs are met.  The secularization of America simply means they don't care what God says and they feel they have no right to judge that gay guy or child molester as long as it doesn't bother them.  Anything goes in the US today as long as it doesn't interfere with Joe 6 Pack's time in front of the toob or on his IPAD.  If the Republican's want to win, they must drop the social platform and simply answer every question about social issues with the following statement, "My personal view on XXX doesn't have anything to do with government, I think we need to concentrate on making the government smaller and more efficient and getting American's jobs.  The bigger government is, the more it crowds out the private sector.  Next question."  Until the Republicans master this statement, they will be doomed to run out a bunch of vanilla candidates that often times will be found as adulterers and will lose every election.

Now my fellow Christians might be offended that I am saying to repress my/our thoughts on social issues that are sin and an abomination in the eyes of God, but I will state emphatically that we must know the real state of the country we live in and realize that we will never have elected officials win positions of power with our current approach.  Our children have been fed daily doses of inclusiveness and have been told that all people deserve to win even if they don't make an effort.  Even in children's sports we award the worst team a trophy encouraging poor results and essentially reducing the accomplishments of the winners.  Kids are told they are told to never discern between right or wrong as wrong might be "right" for those people.  The liberal agenda has been successful in destroying the moral fiber in much of the United States and it is getting worse.  Those kids that have been the target of this re-education are now voting!.  My point here is simply that real conservatives need to focus on the issues that will put them in power, after election they can then attempt to change the tide of moral bankruptcy as leaders.

LADIES
5)  Finally, the Republican's didn't win women.  As crazy as it sounds Democrats did a great job of painting Romney (and all Republicans) as monsters that don't want to let them have contraception or abortions.  Think about this just how low our country has fallen when a single issue defines if a person votes for a candidate..  For younger women the election hinged on who would allow them to get the pill and abortions so they could have sex without consequences!!!!  When this is as far as our female voters think, we really are in trouble.  Once again, this issue underscores that voters are now more concerned with their own welfare and pleasure than that of the country.  The Declaration of Independence states that we are endowed with the Right of Life, Liberty, and Pursuit of Happiness.  We now are a nation that believes we have a right to Free Food, Free Healthcare, Free Homes, Free Phones, and Judgement Free Pleasure.  Notice that I used the word FREE not Pursuit.  The issue for the Republican party here is that they need to address the economic situation of these women and leave the moral choices out of the political arena.  Telling women that they cannot have birth control will not endear themselves to the new voting women.

RACE
6)  I planned to end this post here, but I'll state what I've thought since last election in 2008.  I am proud that my country elected Obama as our first half-black man to the office of President.  Race hustlers like Al Sharpton and Jesse Jackson will tell you that our country is terrible and that racism in this country is pervasive, but clearly that isn't true as we would never have elected Obama had that been the case.  A huge group of white women and white young people re-elected President Obama this cycle.  Frankly in my mind, it is simply more supportive of the fact that the US is not racist as we elected President Obama twice.  It is hard not to argue one single thing though, that African American people are racist.  Exit pooling data suggests that black voters voted 12:1 for Obama, meaning that only about 8% of African American voters went for the other guy.  That is pretty much block voting and that suggests to me group-think rather than individual assessment and analysis.  Group think is essentially racism.  My contention here is simple, that black voters voted based on the color of the candidate and not based on the merits, skills, talent, experience, or the record of the two people.  Perhaps it is like Obama said, it was revenge, but I've never seen revenge work out well for anyone involved.  Ultimately African-American unemployment is higher than it was 4 years ago and I see very little that this President has done to improve conditions for our minorities except promise them help.  Republicans better find a minority candidate that will appeal to African-American voters or else they will remain on the outside looking in if African Americans continue to vote based on color.  You might counter and simply say that Republicans just don't address or represent the issues that blacks are concerned about, but I'd simply say, till we have a viable African American candidate we'll never know.

WRAP UP - GASOLINE, GOLD, AND SILVER
To wrap this up, I've considered this election cycle to be entertaining and revealing.  I still believe that no matter who would have won, the US is in a terrible situation and the financial consequences for our collective irresponsibility will hit home very hard in the next four years.  The reality is that the winner of this election is/was going to be a big loser and receive the blame for the "big one" that is coming.  Perhaps Romney will be grateful that he didn't win as the situation unfolds.

Continue to watch the Middle East as this win puts Israel in a position that it is alone and now will act in a fashion as a person that feels cornered and unsupported.

The election of President Obama bodes well for gold and silver as Bernanke now has received a clear mandate to continue what he does best.  I also like gasoline here and am actually buying UGA.

GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments athttp://www.goatmug.blogspot.com/    

Friday, September 21, 2012

MINING FOR PROFITS - SILVER UPDATE






Photo by Florian

THE NO-THOUGHT WAY TO PRINT MONEY
I wanted to revisit the silver and metals trade and check in on our latest call post QEIII that all metals would be awesome.....forever and beyond.  Since Bernanke made his unlimited and unending threat just like Draghi to sterilize and monetize away every bond on the planets, we have suggested that it is quite a good strategy to simply buy metals, watch, and wait.

So far, that mindless and plodding strategy has paid off and we haven't even had to be patient since just one week ago QE has essentially blasted SLV into the stratosphere with an overhead test coming at $35.00

SLV CHARTING (Click on the Chart for a Better View)
http://scharts.co/QGaYV9  - WEEKLY CHART

Let's look at SLV's chart and I'll pull out some items that suggest we are going higher and I'll also highlight points that at least make me believe we'll slow a bit and digest these very short-term gains.




THE BULLISH CASE
First, we note that the QE announcement pushed SLV out of its declining channel which had been holding since the peak in silver of May 2011.

There was a crossover just yesterday on my charts of the 14 Week EMA and the 40 Week EMA AND it was upward sloping.  This is a longer-term indicator of significance and has proven for me to be a powerful tool in making very profitable longer term swing trades.


The daily CCI chart I add to the bottom of my SLV has also shot into wildly bullish territory.  The guy I picked up the use of this indicator from calls this the Crazy-Investor Indicator and it really measures the herd mentality of the market participants.  In this case, when the CCI goes into the "Green" area this is a significant signal that there is real momentum.  You would stay out and not purchase when in the red.

CCI - CHART FOR SLV



THE BEARISH CASE
I see a couple of things on the chart that might cause you to pare positions if you were a shorter term trader in hopes of loading up again in the future.

Overhead resistance at $35.00  There is no doubt that the $35.00 level for SLV has been rejected twice now and this will be the third attempt to thrust through that area.

The green Bollinger Bands I use are set at 2 standard deviations above and below.  Notice how SLV nicely fits in that moving envelope and can only briefly ever plow through these levels.  Obviously trading prices above or below the outer bands suggest you should quickly reduce position or buy and this is why I use them.  In the most recent case, SLV has been hugging the upper Bollinger band and in fact has been outside them for several weeks.  This does leave me wondering if we're a bit overdone in this most recent move.

FINAL SLV THOUGHTS
The $35 level will once again fall and SLV will move higher eventually, but not yet.  In the short-run I do think that all the "good news" is out and we don't have much to look forward to except for the bad stuff (China and Europe slowing more than anticipated).   Headline concerns like continuing short-falls in the periphery of Euroland, Greek elections in October, and the looming fiscal cliff and elections will serve to put a lid on SLV's upward trajectory until we see more inflation information in the coming month.

(EDIT)
CHART OF GOLD
I was looking at a few other charts and so wanted to post this one of gold as well.  Clearly $1800 is strong overhead resistance.




GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments athttp://www.goatmug.blogspot.com/

Monday, September 10, 2012

GOLDILOCKS - METALS UPDATE


AMAZING PUSH HIGHER
Gold, silver, and pretty much all commodities have been on a tear recently.  I had updated a post several weeks ago mentioning that silver was a strong buy and thought that we might see resistance at $31.50.  I never posted that post here on the blog, but put it up on Tim's blog www.slopeofhope.com .  I suggest you visit his site daily.  Anyway, the title of that post was POUR SOME MONEY ON ME - SILVER UPDATE from August 12th.  In the post I suggested that everyone was supportive of the Fed that is supportive of the policies that will push silver and other commodities higher.  With unlimited bond buying promises from the ECB and a Fed meeting on the 13th, the commodities markets went into overdrive and quickly blew through all previous areas of overhead trouble.

Levels on SLV to watch now include $35.50 and $42.50.  Please note, I used SLV, not silver in this chart!



Finally, enjoy this bullish video from Frank Holmes and Jonathan Barratt as they discuss the outlook for gold, silver, wheat, and other commodities.


BIG WEEK THIS WEEK
Key things to watch this week are the German High Court ruling on the legality of the ECB bond-buying actions (Wednesday) and on the 13th, the Fed will come out an stimulate us again.


GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments athttp://www.goatmug.blogspot.com/

Tuesday, July 3, 2012

SECTOR ROTATION MODEL - REVISITED


THE FED CONFOUNDS INVESTORS
Given the release from the Fed last week that they would hold rates low and continue Operation Twist more ,(they will never stop twisting by the way), I think it is more important than ever to review the Sector Rotation Model that I've posted in years past.

This model helps us review where we are and look at the industries and sectors we should be examining to purchase in anticipation of where we will be.  Thanks as always to www.stockcharts.com, I recently became a member of their service and find it very helpful especially since I punted E-Trade Pro for good!



As we look at the overall economic environment it appears as though we are at a market top and we are entering a recession despite all of the attempts by the Fed to do something to stimulate the US.  Based on the Sector Rotation Model we'd be getting ready to move from our consumer staples positions into healthcare and utilities and then ultimately into finance.  However, we've been in these extremely profitable positions for almost a year and a half now, so something is amiss with the rotation model right?  Even though the trade is a bit old, I still continue to expect that these same positions may not go higher, but on a relative basis will outperform..... (portfolio manager speak for keep your money in my fund!)

I would caution though, that the "normal" progression to go to finance and banks will be a deadly one.  There are several key factors that will make this a bad move in the future.  First, banks continue to hide and lie the embedded risks they have on balance sheets and the issues with Europeans sovereigns will only reveal these more of these problems.  (I am speaking of the mega banks here).  In addition, in a recession, you'd see normally that the Fed would step in and lower interest rates creating a stimulative environment for these institutions, but as we know, the Fed has no room to lower anything.  Thus, banks will be dead money.  Some might suggest that you'd buy preferred from some of these institutions, I'd say, "Why Risk It?

MORE OF THE SAME
So to quickly wrap up this macro-perspective, we need to stick with more of the same here.  More defense (PPA), more healthcare (XLV), and more utilities (XLU).  Don't get too ahead of yourself thinking that the coming recession can be avoided as we are in the wasteland created by ZIRP, courtesy of the Fed and there is no stimulus that can be provided that will be lasting.

RISKS ON THE HORIZON
What could jeopardize our strategy?  Simply put, the tax on dividends created by the expiration of the Bush tax cuts.  Ultimately if dividends are taxed at any higher rate and Congress doesn't do anything to address this, there could be a move to sell many of the significant winners that investors have benefited from over the last couple of years.  What caused this great surge in dividend paying stocks?  The Fed of course!  As rates have been crushed lower, investors has fled from bonds into dividend paying stocks as a proxy income tool.  It would seem like any tax hike could usher in a wave of selling to avoid the new revenue grab by our wonderful government.

GIVE UP ON GOLD, SILVER, AND OTHER COMMODITIES?
I'll leave you one last thought, despite the slow down here, is this rotation suggesting that gold, silver, and other commodities are done.  Yes.....and no.  We'll talk more about how even though the model suggests that these commodities would be the worst place to be, they just might be in the sweet spot.  Look for that post later this week.



GOATMUG

Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments athttp://www.goatmug.blogspot.com/