"Who can say..."
What a difference a couple of days can make.
DOW up almost +1000 in two days, gold breaks $800, and
commodity stocks are leading the market. But, I wouldn't
be flying any "V" for Victory flags just yet.
Can you say massive short squeeze?
Calpine/CPN was really beaten down last week, it opened this
am around $6.76. I bought it at $6.86, then sold 1/2 at $7.86
and raised stops up to $7.50. Then around 2 p.m. it just took
off... an absolute short squeeze. I dumped it at $8.30 after
it pulled back from $8.41 and started to rollover. This was
one of the most violent short squeeze's I've seen. But, it
rolled over hard & fast at the close.
I also bought KWK back, as it was lagging the oilpatch rally,
and everything else opened up too strong to catch. And with
nat gas up and oil screaming... looked like a nice laggard.
I actually thought KWK would get a huge "short squeeze" move,
but it didn't. I bought at $5.96 and then added some more
at $6.05. It spent the day channel trading between $6 and
$6.30 and never really broke out. I took off 1/2 for a
gain of 3-4% when everything else in the patch was up in
the teens.
This one feels like a coiled spring, but it scares me. I'm
still holding a nice positon going into tomorrow, just hoping
that there's a seller that's about to be exhausted.
I did get a nice pop in FWLT and dumped it for a day trade,
kind of middled it... didn't get the top, but made a good
day trade. Kept a few shares for the long term bin.
I've got a pretty big position in TBT (Short 30 yr ETF),
it was only up +2.89%... but, I'm holding it as what I feel
is a low risk alternative to cash with 20-30% upside potential
...but, with tight stops if we get another crisis flight to
safety run, or additional Fed cuts.
The 30 year looks like it may have bottomed. But, I've been
in and out of TBT 3 times this year, thinking the same thing.
Didn't chase anything in golds, but did take a bit more off
on ABX, NEM, & GG. We should expect some resistance at HUI 250.
I'm back over 50% cash and that's what's working for me
with this volatility.... because you can't step in "large"
and take advantage of forced (liquidation/margin call)
selling - if you don't dump into forced (short squeeze) buying.
Fwiw, I would NOT be shorting gold, or gold stocks here, but
I wouldn't miss ANY short-squeezes, or breakout rallies to
take profits into... especially "if" you bought the major
meltdown days. And I'd look to add some puts for "insurance"
around HUI 250, or if the market starts to rollover.
Regarding Nova Gold and the small caps...
Message 25195612
["And more later on a disturbing trend for the smaller cap
golds, and why large caps may be the way to play..."]
Financing is literally drying up... even AEM did a private
placement. It sold off initially, but because it's growth
profile is so strong, and it wasn't that large of an issue,
along with the good timing it had with an analyst junket to
the Kittila mine in Finland just days before... it didn't get
whacked.
agnico-eagle.com
MFN is going to have to dilute. Get out of
MFN -- NOW. I'm surprised it wasn't whacked
harder today...
biz.yahoo.com
And the majors who are buying assets like KGC's purchase of
Aurelian & their most recent buy of Teck Cominico's interest
in Lobo-Marte, are stealing them!
The play on the juniors & explorers was that they were now
beaten down, and so cheap... that they'd become prime
buyout candidates.
And they are... but at much lower prices, because it is now
clearly a buyers market... filled with soon to be distressed
sellers who may be unable to obtain financing in 2009,
and even into 2010.
Look for GG NEM and ABX to snap up assets on the cheap in
this financing drought, as juniors who need financing
within the next two years get liquidated by funds.
You must now own the majors who will be prime acquirers here.
And how bout Citi?
Funny how no one demanded that they appear before Congress
with a survival plan? Nor did they demand they sell THEIR
private jets (ever see Weil's boat?). And how about the
naming rights of the Mets stadium? No out cry there?
Is it just a no respect for Detroit thing, or what?
...maybe because they actually make things out of steel,
and rubber... instead of "thin air"?
Next time you apply for a loan, ask your bank if you can
move some of your debt -- off your balance sheet...
JPM, C, and BOA are all bankrupt.
Literally "Enron's Walking."
Paul Miller of FBR wrote a great report last week, where
he says the major banks will need at least ANOTHER
$1.2 Trillion dollars...
U.S. Needs to Pump $1.2 Trillion Into Banks, FBR Says (Update3)
By Dawn Kopecki
Nov. 20 (Bloomberg) -- The U.S. may need to spend another $1.2 trillion to recapitalize the eight largest financial institutions and stabilize the markets because private investors won't take the risk, an FBR Capital Markets analyst said.
``The sheer size of the capital deficiency, coupled with the opaque nature of credit risk, will keep private capital sidelined,'' Paul Miller said in a research note yesterday.
Can you say AIG-deja vu?
There are also analyst reports stating that the ultimate
stimulus package that may be needed for the US is...
"$10 Trillion Dollars."
That's for economic stimulus, infrastructure job creation
...not bank bailouts.
Sweden had to put almost 20% of GDP into the nationalization/
bailout of their banking system, and they didn't have a debt
bubble, or anywhere near the leverage in their financial system
as we have.
Right now US projections are 3%-4% of GDP.
...that's a pipe dream.
And that's why gold has rallied.
Already, smart money (non-gold bugs) like hedge fund
manager David Einhorn are buying gold stocks (KGC):
biz.yahoo.com
The US will end up spending an unfathomable amount of
money to bail us out of this credit bubble collapse.
I think the CEO's responsible, along with those individuals
like the guy from Citi who personally made $15 million last
year selling CDO's, will be smart to find exile on remote
deserted islands before the masses riot in the streets and
come looking for them with pitchforks and torches.
Watch Paulson run to China as soon as he's out of office,
and watch Bush jet off to his Paraguayan ranch.
With the still unfathomable costs that this country will
end up paying, it is unimaginable that both the architects,
and the perpetrators of the greatest transfer of wealth, and
the largest ponzi scheme in history won't end up in jail
beside Jeff Skilling, Bernie Ebbers and Dennis Kozlowski
who now appear to be Snow White, Little Miss Muffet, and
Cinderella compared to the Paulsons, Mozillo's, Caynes,
and O'Neals...
SOTB
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