Select Stocks Send Signal

289
Fri, Aug 17, 2012 - 10:43am

Perhaps we have a new acronym on our hands? The SSSS. Yesterday, quite by chance, I noticed that several of the best mining stocks are making 6-month highs. Is this another signal that higher metals prices are right around the corner?

Yesterday afternoon, I opened an app on my phone that is programmed to follow the major indices as well as 15-20 miners. I only opened it to see how the overall stock market was faring (which is something I rarely do) and then I scrolled down to look at a few miners (which is something I do even less). A couple of them caught my eye. I saw GOLD (Rangold) first and noticed that it was pushing 100. Then I noticed AEM (AgNico Eagle) and thought it looked noticeably higher, too. I pulled up charts and saw that they are both at 6-month highs. Wait a minute here. Hold on just a second. Isn't it curious that two, top miners would be moving to new 6-month highs while the metals are still stuck in a trading range?

The last time GOLD was near 100 was last March when gold was near 1700. The last time AEM was $46 was last November, when gold was close to 1750. What does this mean? Beats the crap out of me! But seriously...this could be phenomena specific to these companies...OR...it could be just another sign of the impending resurgence and rally in the price of the metals.

The next question should be: Do any of the other miners look like this? Well, not really. I did find two of our old favorites that are perking up a bit following recent earnings "disappointments" and need to be watched.

And the HUI itself is looking better. I can't give an ALL CLEAR yet but...if the HUI can keep rolling higher and post a few closes over 460...there may finally be reason for optimism in the mining sector.

And, of course, any mention if the term "HUI" here in Turdland comes with the obligatory posting of the SMOKING HOT Carrie Underwood singing about it. (Neo-turdites should know that, to my partially-deaf left ear, "undo it" sounds like "the hui".) (And I'll never understand what she sees in that meathead hockey player.)

Carrie Underwood - Undo It (Official Music Video)

OK, after I wipe off the cold sweat in which I suddenly find myself drenched, it's back to business. In an absolutely stunning development, the metals surged this morning at the open, only to be CAPPED ONCE AGAIN near 1620 and 28.25. Though I know many of you are getting sick of this crap and are dying to see the metals break out, you must remain patient. Fundamentally, gold and silver are extremely strong and, even when left to their own devices, are poised to eventually break out. ( https://stream.marketwatch.com/story/markets/SS-4-4/SS-4-9338/) But, screw that. I don't want to wait much longer so maybe we can begin forcing the issue next week. Until then, here are graphic representations of our current predicament.

And I'm not sure which of these two stories make me feel more nauseous. You'll likely read the NYT story before heading off to barf and then return to watch the video before getting sick again. First up, all of the conniving, criminal thieves at MFingGlobal are apparently set to walk free. Hmmm, I've got an idea. What do you say you and I start an investment firm where we take client money and use it to place huge, extremely risky trades. Then, when it all breaks down and the clients lose their money (which they were told was "safe" and "segregated"), we simply laugh it off as "porous risk controls" and walk away. How do you think that might work out for us? Maybe just a bit differently than it has for the criminal Corzine and his merry band of politically-connected, reprehensible outlaws? https://dealbook.nytimes.com/2012/08/15/no-criminal-case-is-likely-in-loss-at-mf-global/?hp And don't forget that just last week, your Seventh Circuit Court of Appeals established as precedent that the theft of client funds is now completely legal. God Bless the U.S.A.!

https://www.businessweek.com/news/2012-08-09/bank-of-new-york-mellon-wins-appeal-on-312-million-lien

https://www.reuters.com/article/2012/08/10/us-sentinel-appeals-decision-idUSBRE87900T20120810

And then there's this. I found this video on ZH last night. It is a time-lapse progression of the ownership makeup of the U.S. treasury market. Note that, in 2003, the Fed had a nearly even ownership across the curve. Watch then how this progresses. Now, the Fed is nearly out of short-term treasuries but they have come to completely dominate everything with a maturity of 3 years to 30 years where they own as much as 70% of the market! Simply amazing. And disgusting! This is America, land of the free and home of the brave where capitalism and free markets create productivity by equitably deciding who wins and who loses. NOT!!!

Fed vs. Private Sector Treasury Holdings

Listen up, you witch. Your days are numbered. We're onto you and soon you and all of your monkeys will be sent scurrying into exile. Perhaps you will be lucky and be allowed the fate of that goon, Corzine. Perhaps not. In the end, it matters little. All that does matter is that the game is ending and you are going to lose.

Drago: You Will Lose

TF

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  289 Comments

  Refresh
Aug 18, 2012 - 10:14am

My last on LF

OK, I concede the point. LF is quite a ways from us and though he may cheer the banker downfall, that is probably where our "alliance" will end.

Yes, Clinkin, that's a pretty big handout. They see it as the reparations from slavery that the US Gov reneged on after the civil war. Each head of household was promised 40 acres and a mule. Few received it and instead went into the sharecropping system.

Where can anyone find justice and equitable reparations? Does a conquered nation deserve reparations? The questions go deep and are irreconcilable.

Everyone is a mixed bag. LF is one of the few AA leaders I have heard who even talks about personal responsibility, and I am glad to hear him speak of it.

I don't defend him. He has been called the Prophet of Rage and certainly deserves the title. When the economy goes into the pit, I don't think I want to be a white man in a region where the NOI is powerful.

Excalibur
Aug 18, 2012 - 10:02am

I swan to goodness, I <3 Stacy Herbert

Something about that mischievous grin and those sleepy eyes make me me crazy. Goodness gracious sakes alive!

¤
Aug 18, 2012 - 10:01am
ClinkinKY
Aug 18, 2012 - 10:00am

John McCain and Dick Lugar open new business...

...in order to supplement Lugar's income after his recent Indiana primary defeat:)

¤
Aug 18, 2012 - 9:59am
Aug 18, 2012 - 9:50am

Good Morning - from my favourite Austrian economics Prof:

Josiah Ober of Stanford University talks with EconTalk host Russ Roberts about the economy of ancient Greece, particularly Athens. Ober notes that the standard view of ancient Greece is that it was very poor. Drawing on various kinds of evidence, Ober argues that Greece was actually quite successful, and that the average citizen of ancient Athens lived quite well by ancient standards. He suggests two possible explanations for Greece's economic success--an openness of the political process that reduced transaction costs and encouraged human capital investment or innovation and cross-fertilization across Greek states. The conversation also explores the nature of evidence for understanding antiquity and the prospect for future discoveries pertaining to ancient Greece.

Ober on ancient Greece

(el Gordo - I have a doctor's note)

ratioarbitrage
Aug 18, 2012 - 9:49am

SGR lags 10 yr yield - synthesising XAG, XAU correlations - wow

I previously posted that XAG follows the 10 year yield at a rising multiple.

I had also noticed that XAU tends to move opposite the 10 year yield - risk on/off trade.

But we all know that XAG and XAU are correlated in a leveraged way with slippage in favour of XAU.

So X is correlated with Y, which is anticorrelated with Z, which is correlated with X. Hmm.

So I looked at the SGR ($silver:$gold). Wowowow. It is correlated almost perfectly with the 10 year yield, and at a convenient ratio: currently about 100. So recently SGR was around 0.0155 while the yield was 1.55.

The SGR has followed the 10 year yield faithfully through the ups and downs of the last three to five years. EXCEPT when there was QE. So the SGR to 10 year yield multiplier was around 200 (yield of 4%, SGR of 0.02). When QE2 happened (for example) the multiplier slipped all the way to 100. It stayed there while the SGR went up to 0.03 in early 2011 and it has stayed there ever since as the 10 year yield has drifted downwards.

The SGR lags the 10 year yield by a couple of months.

The 10 year yield has just added 30% from 1.4 to 1.8.

It is a thing of beauty, for two reasons:

Finally the SGR is not meaningless to me.

This is yet another KWN-esque pointer to that unexplained and yet strangely inevitable spike in the SGR and XAG.

Excalibur
Aug 18, 2012 - 9:48am

David Morgan on the Max and Stacey show

Before that Max is funny on suicide ( as well as taking it seriously). The QE stuff is wonderfully surreal.

Keiser Report: Consumption-tration Camps (E329)
ClinkinKYAdmiral Ag Bar
Aug 18, 2012 - 9:46am

@Admiral Ag Bar

Laughing so hard, I'm crying.

I miss Chris Farley.

Thanks for that.

boatman
Aug 18, 2012 - 9:45am

human nature is the devil

not any one race.

blacks in africa own black slaves til this day.

blacks in africa rounded up other blacks n sold them to whites in the day.

human nature ensures the failure of fiat money and the failure of Modern Monetary Theory and the lasting value of gold.

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