Muppet Eating Crow

The miners continue to stink it up.  Stay clear.

On the other hand, last years energy has become this year's $$.

The market is weird.  Buy the dip on stocks has been the name of the game.  I've largely missed out, except for energy. 

Muppet Miners Update

Well, Mining Muppet celebrates a year of sporadic updates, exuberance, and capitulation next week.  In the meantime, I'm posting the "Muppet Picks" from about 8 months ago.  Sunward continues to disappoint, and Tinka is currently in an interesting channel.  SilverCrest is the star of the group.  The only one I currently own is SantaCruz.

Muppet Picks Update

Here's an update of the Muppet Picks that I bought last May.  Tinka is the biggest disappointment--but at the time, it was the junior that had made me the most money, it was a winner all of 2012 for me.  It still makes up a decent chunk of my core, and I haven't trimmed since the smack-down last April.  Recent additions, that I won't be tracking (just because I haven't decided if they're trades or "core" yet) include Golden Minerals (AUMN), Quest Rare Minerals (QRM), First Majestic, US version (AG), and Sandstorm Gold (SAND). AUMN and SAND have been impressive.  Wished I had bought EXK, but it was weak early (just a lagger, it turned out), so I missed out.  I also have some GDXJ, which is just a momentum trade.  I also have to point out, that although I bought SWD.TO at $0.31, I still have some that I bought back at $1.12.  I wish I had sold--seems like the company is not much more than a shell now, although the website still looks good, and they had good drill results as recently as September--no real reason to sell now. 

Update on Yesterday's Post

The swings happened today.  I bought initial stakes in both AG and EXK, 7% each.  Strength tomorrow (a break of the trend line) I will add UGL 15%. 

In more interesting news, I'm wondering about Silvercorp again.  Gone are the days of the mysterious Wynter Benton, but I'll likely stay away.  Too much funny business.  Still, I'm going to keep my eye on them.  There is an allure there!  Check this out:  Silvercorp Valuation Outlook

Tracked Miners Update

Here's an update of the miners I've been tracking.  Only a couple are up from May, and most are down since September.  Cycle timing-wise, a buy opportunity is coming up.  The timing hasn't worked out predictably for all of the juniors, SilverCrest being the exception. 

Silver Wheaton and First Majestic will be two of my pics to buy when this final intermediate decline shows a swing.  Two tranches:  one on the daily swing, a second on a weekly swing.  I will also buy Endeavor (EXK) and a leveraged metal (UGL or AGQ). 

You can see from First Majestic's daily chart above that most of the conditions from a technical perspective are satisfied for exhaustion selling to be close: RSI 7, MACD, and SlowStochs are all showing oversold, with the SlowStoch embedded for the last two and a half weeks.  A breakdown from the lower BB at $9.44 could have this thing selling all the way down to $8.85 range, so Monday's behavior will be important to watch--I would not buy unless there is a swing into the close. Stops would be at the swing.  Breakouts have been convincingly through the 10dma, and retests per se haven't really occurred, as closes back below the 10dma have signaled further and enduring declines.  Cycles-wise, the three guys I trust are all saying we're due--including my favorite free one here:  Beneath the Surface

 The weekly chart for First Majestic shows similar conditions over the longer term--momentum indicators are oversold, although the RSI isn't as low as can be typical for intermediate cycle lows.  However, I've learned that, if this is the first intermediate cycle out of a yearly cycle low (last June), then momentum indicators may not be severely oversold when the second intermediate cycle begins.  The key is to watch for a weekly swing.  In this case, that would be a close above $10.50.  Sometimes there will be a narrow weekly range, which "eases the parameters" for the weekly swing to be met the following week.  I will watch for both.

Picks Update from May 20th Post

Just a quick post of updates to the May 20th "Picks" post.  Some good, some bad.  I continue to like Tinka, despite the performance since May!

Obviously, yesterday was a nice day to hold miners.  Some are saying the short squeeze is "on" and now it's just time to hold.  I agree, but was only able to put half my money where my mouth is, selling both NUGT and half AGQ positions while they were green. 

Selling and Buying

Today I sold my First Majestic (FR.TO), a 7% stake of my portfolio, which takes my total First Majestic down to zero.  I'll buy more at next cycle low, but I might split the allocation with Endeavor, since it outperformed.  I was a little worried about FR because it was both rejected by the 10dma and failed to move up through volume price support; it could go down to $13.50s, which about where I originally bought it ($13.65) back on 8/12. 

I also bought a little more Tinka toward the close today.  Sort of silly to see this breakdown, but as this is one I want to own long term, I didn't hesitate to add as it broke down below it's old lower bound of .68 to .65.  This was a sell the news-type fluctuation, I think, as Tinka just posted news today, reflecting more silver-laden drill results.  Go figure:)  Tinka Drill Results--NEWS

Buying and Selling

Sold positions from August 8 today, including SLW, AGQ, and GDX.  I also *bought* more Tinka today at .69.  I will be looking to reload after a correction, and will post when I do.  Endeavor has been doing GREAT, but I'm not sure if it will have the most gas left. 

Happy trading! 

Leaders Today

Here is a quick list of the leaders I'm watching:  First Majestic, Endeavor, PanAm, Silvercorp, Silver Wheaton; and for juniors, Scorpio and Alexco are doing well.  Stops have been moved up on yesterdays large positions in GDX, AGQ, and SLW, so unless there's some major premarket action, should profit at least 6% on the miner positions.  Tinka did move up today, but only to .74, so I could not excersise my exit target of .75.  SantaCruz is down slightly, but this is a move down from the upper BB (10,1.9) about halfway to the 10dma.  Not worried (yet).

Buying Today

Like many other PM watchers, I was a buyer today.  I bought SLW, TK.V, AGQ, SCZ.V, and GDX.  I have stops on the larger positions (SLW, AGQ, GDX) but not on the juniors.  Tinka seems to have reestablished it's pattern of lagging a day behind the mining sector.  Tomorrow will test this. I bought at .69, and will sell this tranche when (if?) TK gets back to .75, which would represent an 8.7% profit.  Fine by me. 

SLW looked glorious today:

Weak Sauce

Taking profits here on OLE and SCZ.  I'll leave the Tinka position on since the range feels more established.  Weak sauce here from the little miners.  Plus, gold just broke down some more, and the dollar looks to me primed for a bounce.  I'm also selling a UGL position from a couple weeks ago for a small gain--basically enough for some chicken teriyaki for lunch! LOL.

Adding Some

I added to positions today in TK, SCZ, and OLE, which looks good on the daily chart going into the close, while the weekly had shown a swing and the MACD has turned up.  Small position with this setup.  Check it out: 

Muppet Miners--Price update

Just wanted to post an update of the spreadsheet this week from the miners I've been watching.  The big winner is First Majestic, which continues to have massive output, and a gain of 32% in two months since the spreadsheet was originally posted.  The big loser is Alexco, which has had to implement cost-saving measures as the metal prices have dropped. 

I'm going to be adding a few more miners to the tracking sheet, including SantaCruz (SCZ) and Gold One (GDO).  Other smaller ones to watch include KOR, ORG, OLE, ORV, RPM, SSP, and USA.

Tinka closed above the 10dma with no upper tail on the candle, so that looks initially positive.  However, this isn't confirmed by either strength on the weekly chart or price support from the underlying metal (silver). 

The only trade I've made in a while was a few USO puts a few weeks ago.  Those didn't work out as oil seems to have caught a speculative bid, and continues to climb.  Right now, waiting to see how oil responds to being overbought and how miners respond relative to their PMs.  Long term, though, I'm excited about these smaller miners, as cost saving requirements are forcing management to take a more serious view of spending and also of borrowing.  Hopefully, not too many are hedging in order to make this happen... 

For Whom the Tinka Bell Tolls...

Last time I checked in on June 3, I wrote: "I will add back the 2% if there's either (a) a successful retest of the 200dma, or if (b) it's going to close above the 50dma."  Neither of those criteria materialized, however, in spite of some strength from gold in the interceding weeks. As you can see in the chart below, after being rejected by the 200dma, the lower BB was tested, and then .70 became the new floor.  Friday saw an almost 10cent range, closing strong with a long lower tail at .79, just above the middle BB, which in my preferred setting uses Ira E's 18-day average of closes.  The bar has got a lot lower since the June 3 post, where the 50dma was then above the 200, it is now below it. Overhead resistance next week should be at .83, then .86, then .88. Friday showed strength for the miners in general, though, so Monday will probably be weak, especially if the metals continue lower (and double-especially after the CME 25% margin hike sinks in).  Just looking at the daily chart, I don't see a whole lot to get excited about here with all the overhead resistance, the embedded stochastic low, and the RSI 7 in no-man's land.  Plus, the latest news out of Tinka headquarters, from almost 2 weeks ago, is that they found some zinc.  *yawn*  Still, if it can break through resistance at the 50 and then successfully retest it on the downside, I'll buy a little.  On the lower end, if it is rejected by the 50, I would set a buy order at .70, since that has been a good buy zone for the last month.

The weekly chart is a bit more interesting, in my opinion. As you can see in the chart below, the last couple times there was a lower BB crash--in October '11 and later in December '11--the stock recovered the middle BB.  After first recovering the middle BB in November, there was a retest of the lower BB, then up above the middle AND holding above the 50wma almost in its entirety, with the exception of a bit of weakness from June-August '12. So what I want to see on this chart is a retest of the lower BB, followed by a strong move to close above the 50wma.  That gives me confidence. 

I also want to see some *new* drill news.  If I go back to the news releases from late December '11 to early January '12, what I see is evidence of "finding what we expected," mineralization-wise.  Look at this language from the release (emphasis mine):  "Hole16 intercepted banded, "zebra-stripe" sandstone and progressed into the underlying siltstone breccia and fluidized sulphide unit. This unit is generally quite thin or nonexistent, but it marks the transition between the underlying Pucura limestone and the overlying Goyllar sandstone unit that hosts the bulk of the silver mineralization at Zone 1. The hole intercepted the high grade veins/faults/gossan zones within the sandstone roughly perpendicular to the dip of the hole, while the intervening fracture-controlled mineralization in the sandstone was intercepted at about 45 degrees to the inclination of the drill hole, on average."  I want to see language like this where there is a marked transition to quality mineralization--from zinc to AG.  

Tinka Update--Booking Profit

Tinka was rejected by the 50dma, so I'm going to book profits here from the .77 tranche.  Not a lot, but I'll take it.  I'm still holding the 3.5% from .91 from April.  I will add back the 2% if there's either (a) a successful retest of the 200dma, or if (b) it's going to close above the 50dma. 

Just Nibblin' (on TK.V)

Got a little more Tinka when it dropped below .80 per the plan.  Should have waited as it went as low as .67 the next day, but my order (2%) filled at .77.  I was glad today to see it up a bit, but since most other miners were down, I'm curious to see if the old pattern of lagging a day behind the mining sector still holds for good old TK.V.  I wasn't bold enough to buy anything else just yet, but I'm watching the stock market for weakness.  Hopefully if there is a top soon, the big boys will begin to rotate back into PMs and miners.

Here's the Tinka chart:

Muppet Miner Positioning and Updates

It's been a month--so I decided to put up some numbers I'm watching.  I've not been trading actively during that month, but contemplating how to trade more methodically.  To that end, I've made myself a spreadsheet with the miners I'm watching, most of which I've traded in the past or still hold.  Currently, I have small positions still in TK, SWD, and SLW.   I will be posting the sheet from time to time--most likely on days when I adjust a price target or buy/sell. 

I'm still nervous about miners because of bullishness I'm reading on the message boards.  However, I will start to reenter in the near future--the above are first tranche prices only.

The Gold:HUI ratio is starting to look better, at least based on the MACD and the declining oversold RSI.

 

On the other hand, the Dow:Gold ratio still looks to have momentum, despite it uber-stretched position over virtually all of its weekly moving-average indicators.  I took profits on my limited involvement in stocks back in February, so if I had some more, I would definitely be well into trimming now.  This ratio is ridiculous, if not historically so...

Still here, still sober.

Tinka has been range-bound for the last week, basically oscillating between .86-.91.  Buying the .86 and selling here gives you almost 6%.  I'm putting an order for this tomorrow, a stinker, at .85.  We'll see if it works.

First Majestic, Silver Wheaton, Silvercorp, SilverCrest... all cheap. Alexco looks crazy cheap on the heels the silver/gold smash last week--in retrospect, I think Alexco's price breaking down from it's range was the tell.  My bias and the pro-cyclicality of thought assumed that the range would continue.  Thank god for stops... but... sill massively oversold. From this month's press release:  "Accordingly, as we progress through the second and third quarters we will be sequencing back into higher grade areas of the mine. We continue to expect to produce approximately 1.9 to 2.1 million ounces from the Bellekeno mine in 2013."  I think I'm going to start back in at these levels.  While staying away from GDX, GDXJ, NUGT from now on.

In other news, Netflix is up 25% in AH.  Crazy times.  Miners are undervalued and hated, while virtual happiness streams to 25% gains.  Welcome to the Matrix!

95% Trimmed

Sold half of the Tinka at 0.91, a little lower than planned.  Today is brutal.  I have a sell order in for FR, too.  I'm not going to sell SWD at this point.  This is not how most investors invisioned it, right?  Time to practice some Zen.  All I have to say is that I'm glad I'm only 37 and I didn't have that much to risk in the first place.  If I were retired, or on fixed income, and caught in this, it would be a different outlook, I'm sure.  For now, I just feel a case of the coulda woulda shouldas.... Back to the drawing board.

Another opportunity will present itself.  To learn from mistakes is where the real pride will come from.

Mining Muppet... signing off.

Mining Insanity

As if holding GDX and NUGT over the last 6 months weren't crazy enough... Now production the US's second largest silver mine and the world's largest copper mine has just imploded via landslide:

LOOK OUT BELOW -10% OF U.S. SILVER SUPPLY JUST SLID AWAY 

Predictions on how this will impact the PM and mining sectors?  The blogosphere holds that the selling will continue.  We'll find out starting in 3 minutes when the Asian markets open.

Edit:  Selling Friday sucked, but I can say now that I'm glad I sold what I did, and wished I had sold more.  This takedown is EPIC.  Here's a little tinfoil, which should be of a little comfort if you're like me:  Assault on Gold