Best to you all

I think this is an appropriate time to just shimmy on over to the sidelines. It has been very interesting doing this blog and we all take our experiences forward and meld them into new things. This has been one tiny spot on an internet full of opinion and analysis. We got some stuff right, we got some wrong. But it was really fun regardless. Sometimes you just know when things are done. This is done. More time for actually researching stocks and markets in depth, running a business, learning songs on guitar and enjoying family. Less time for the minority elements of the online experience that seem a bit over the edge. Whatever you do, do it well and to the best of your ability. And enjoy!

Gary (just plain gettin' tired of hearin' myself talk) ;-)

Edit (1/16 @ 6:17 am) I want to add that the Biiwii.com website will function as usual with a continued emphasis on the most solid news and analysis we can find. Actually it will be better because now it is no longer run by a stressed out web master, business person, rock band player, dad and blogger. Just the first four. The blog will likely remain up as a posting place for occasional things I find important or for the odd commentary I may submit to other sites. But the day to day market watching is kaput. Too much work for too little return. If you'd like charts, by all means consider using TA onDemand. Put me in coach! :-)

PAL

Ah, profit taking urge satisfied. PAL ejected after yesterday's huge pop. Still 'own' it in the contest though so I hope it goes up significantly from here and I can win that Wii thingy. All gold & silver stocks held close. Edit (3:34) Yes and yes. Yes I held all gold & silver stocks and yes I added a bit. Oh and yes I find it funny that I can call a top and manage to not take action. Must be I thought it is nothing but a short term top, eh? Well, we'll find out soon enough. HUI needs to hold the 450-460 range for this to be what I think it is.

Gold hits target

I have nothing technical to offer in the short term now, other than things are getting stretched. It has been a great run. I you've got profit and you like taking profit, well you know... but big picture remains nice. Edit (6:46) I looked, really I did. But found nothing I wanted to sell. Some are non-starters selling for 20-25 bucks gold in the ground and others that have run up are the stocks that are long term holds. I don't really have many traders. Maybe VGZ, but that has done nothing yet. Maybe PAL at some point. So I'll generally stick with the hold and add pullbacks theme. 2008 off to a great start and at some point down the road it may get better adding class tech stocks when they become sold out. As for gold, given that the patterns I went by (weekly sym-tri and daily sym-tri) have come to target, I have no new data points. But this thing could well just take a consolidation breather as the growth story - industrial metals, silver (vs. gold) and even stocks - gets a bid for a bit and outperforms. Edit (1/15 @ 7:03) Steve Saville checks in with a good read on the gold miners' advance: No Speculative Froth, Yet. The first line is "A pullback should commence within the next few days..." (this was originally written on the 13th, so we're there). He makes a point that hedge funds may have been piling into the major gold stocks (absent the public). As you know, when the hedgies begin selling it can be gut wrenching. So the question is whether or not this is the end of the gold miner run. I think not when considering the outperformance of their product vs. most financial assets, now including oil. This actually tells me that the proverbial 'smart money' is taking positions. Will the Dollar rally? It's daily chart still looks awful but the weekly is constructive for a rally at some point. But the gold-oil ratio has been leading the dollar, has it not? The yield curve is bullish. Credit spreads are bullish. To ride a major bull market you have to take some lumps. I still may skim a few profits here and there but given the 'buy the pullbacks only' discipline, I still have ample cash as there has only been one pullback (450 to low 430's HUI). Fundamentally, it is a lot more like 2000-2002 then the expansion enviro that followed, during which I was often uncomfortable with the gold miners running up in tandem with their bottom line cost drivers. That is not happening now.

PS: I disabled comments as there is a gnat buzzing around looking for attention and taking up too much of my time filtering out the foolishness. Have a great day.

XAU Cup & Handle - Big Pic A-Okay

Once again, it's back to the big picture chart that kept us steady during all the hand wringing in 2007. A huge cup w/ handle on the XAU showing that no matter the short term angst - and da boyz is really puttin' on da full court press to gold bugz as dey tries ta scare 'em wit all kindsa bearish jive and da CoT's - the big picture is technically positive and in line with the positive fundamentals. Measured target is much higher. Once again, you do not pay me to tell you what is going to happen and even if you did, I wouldn't be able to do so. You make your own decisions. I can only put up what I see.

A full technical look at GSS

Sometimes I need to take a break from the macro-fundamental mental masturbation and just look at some stocks. GSS is one that I own in all accounts and is also one of my entries in the SINLetter stock picking contest... WHEEEE!! or should I say wii (that's one of the prizes - anybody know WTF that is?). Regarding the contest, you know and I know that I am just hitting the gold run (current % would be even better if they'd allowed my original pick, YNG.to instead of PAL) and stock market top (AMZN short) and when the contest ends in 3 mos. things could be different. Anyway, here is Golden Star, a company I feel is improving fundamentally in slow increments and certainly has been in the kind of technical set up I am always interested in. Here are daily, weekly and monthly views for a nice comprehensive picture. No recommendation as I bought much lower. Edit (9:39) On a related matter, see post and thoughts on the high profile bearishness cropping up in gold (CoT chart included).

Gold-Oil Ratio predicting a rise in USD?

As shown previously, the Gold-Oil Ratio (GOR) and USD have been partners in downtrend during the latter part of the manic commodity, stock market and foreign currency rises. Well, what is good for the gold miners (GOR breakout) may be good for Uncle Buck as well if the correlation holds true. Given that gold is extended vs. not only USD, but also major foreign currency we again view the sector as ripe for a correction. But that would be a what... Beuller? An opportunity. Because now fundamentals are kicking in all around and it again says here that to ride a major bull market with funda's confirming you need to tune out the noise. I am now more comfortable with the commodity bulls (oil, indust. metals, etc.) - bullish on all non USD assets and making no distinction between the monetary and the economically positively correlated 'resource' trade - having been tamped down. So bring it on... a nasty correction or continued run away bull action. I for one am ready for either.

Huey - Flyin' around up there in blue sky

HUI has broken to new all time highs and in the process has eliminated the divergence to gold. But it has done so as the XAU struggles with the same breakout and in an over bought condition. Over bought means that the buying power is stretched and the sector is very bullish. So don't be surprised by a correction. But over bought markets can as they say become more over bought which is why I am not smart enough to trade in and out. With oil finally dropping materially vs. the metal, another major cog in the gold miners' fundamentals may be kicking in here so that one day gold sector traders may once again enjoy that famed leverage to the POG the best miners are known for. FWIW, most of my miners are red today even as the Huey is up and that may be a hint that the sector is ready for a shake out. My miners are generally the little fellers that will eventually offer the best leverage to the gold bull. Patience and risk management remains the modus. Have a great weekend and GO PATS!

Separately, here's Mr. Moskow on just how desperate the situation is for the hopped up financially engineered segment of the economy. Risks are not on the inflation side? Maybe he's right because for gold to hit the inflation adjusted level of oil, using the 1970's as the basis, gold should be over $2000 - hence my oft repeated longer term target.

CHICAGO, Jan 11 (Reuters) - Former Chicago Federal Reserve Bank President Michael Moskow said on Friday that the U.S. central bank is likely to be "very aggressive" on interest rate cuts at its next few meetings.

The Fed "clearly has to understand that the risks are on the growth side, not the inflation side," Moskow said while answering questions from the audience after a speech on the economy to a business group in Chicago.

Moskow said there was still debate about whether the Federal Open Market Committee would cut rates by 25 basis points or by 50 basis points on Jan 30.

"I'm guessing there's at least another 50 basis points there" in terms of rate cuts after January, he said.

Moskow was making his first comments on the economy since retiring from the Fed in August. He is currently a senior fellow at the Chicago Council on Global Affairs.

GG

Anybody find it funny that Goldcorp was nailed with a downgrade after the stock was threatening a blue sky breakout after these results and forecast? The major gold stock indices are sporting a bearish divergence to the already broken out (and heavily shorted by da 'commercials') metal and it would be inconvenient to have the richest gold stock on the planet breaking out, now wouldn't it? This paranoid moment brought to you by the good folks at Biiwii.com

Interesting Gold Ratios

While gold is currently trading [rightly] as if it is the best currency on earth - including oil, it is also beginning to take on a bearish tinge measured against the industrial metals and importantly, silver. It is still technically bullish vs. the other metals but the ratio charts are at least hinting that we could get a dose of 'it's really not as bad as the headlines (and stock market action) would have us believe' sentiment somewhere in here over the next several weeks. I surely think that the dangerously (and immorally) levered up 'something for less than nothing (debt)' financial economy is still in deep trouble, but real (productive) industries are well intact - for now.

Dow

There is room for a rebound, but it does not look like it has the makings of anything sustainable. I wouldn't think the 'potential' H&S top will become a realized H&S top without at least a fight from the bulls. Edit (4:07) Neck line broken (same w/ SPX), at least for now and Dow joins the Trannies, SOX and Nasdaq in Palookaville. This is err, not so good. Can you imagine the panic that could set in if the likes of CFC & ETFC are mere dominoes on the Ponzi-financial landscape?

Huey - Healthy Picture

You can't get a much nicer picture than the current HUI. Corrections - if this is one and if it amounts to anything - can be opportunities. Opportunities for some to get shaken out and for others to add. For my accounts, I'll choose the latter.

Separately, it is really neat when I find that unsolicited donations have shown up in the PayPal account for no other reason than someone is finding value here. I will never tire of saying thank you. Also, thanks to those of you who have used the TA onDemand service. It's a nice model; order comes in, I get to work.

Nominal Gold & Gold-Oil Ratio

Gold is getting into an area at which it could take a hit at any time. This would be healthy and perhaps add sustainability. The chart says our 920 target remains locked and loaded, but I would rather get there with a little angst in the mix as opposed to a hyped up blow off. Shorter term indicators are becoming over bought and a test of the breakout to all time highs would be healthy.

It is interesting to note that oil's all time highs are being jiggered in the media to adjust for inflation and not panic people (it's only at the 1970's levels!) while the barbarous relic of the past has not nearly kept up with inflation. "Who would own such a bum asset?" asks the average paper pusher. This is a big part of the reason for our $2000+ eventual (years out) target; catch up moves can be a bitch. Meanwhile, in the here and now, we await a break of the downtrend in the Gold-Oil Ratio. Here is a chart with an interesting correlation to the USD for your consideration.

Click charts to enlarge

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SINLetter Stock Picking Contest

First of all, neither Biiwii.com nor this blog are 'stock pick' sites. Secondly, it is far more important to me to get a handle on the macroeconomics than it is to ferret deeply into individual stocks, and thirdly, Biiwii.com is currently leading this stock picking contest presented by Mr. Asif Suria at SINLetter.com. Wheeeee!! Of course, by the time you read this I may not even be on the front page of leaders because we all know how stocks move.

A couple notes: I picked these on 1/1/08. PAL (I don't own it) was a replacement for my original pick (YNG.to, which I also don't own) which was disallowed due to its Toronto listing. I own GSS and I picked AMZN short (currently short nothing in real life), which I think may be my undoing in this contest. You know I deplore the casino mentality and generally do not have a high regard for owning stocks as anything other than short to intermediate term profit vehicles (there are very few I consider indefinite holds), but this is fun and even we gloomy Gus's get to have fun once in a while.

SOX - Next Support Level

Preferred support (trend from '03) has been lost but the SOX has more support at around 385. An analyst downgraded the chips yesterday (don't you love it when they do this after a head & shoulders topping pattern has already expressed itself to target?) and we are left to wonder where was this genius a few short months ago @ 540? The semi's are an important indicator of overall market health and it would be good for bulls to get their $hit together here.

Dow, SOX, GLD & SLV Charts

The stock market is sucking wind here and I do not like this SOX breakdown. Recall the weekly trend from 2004 that was part of the bullish case for semi's. Well, that was lost today and it needs to be immediately remedied. Also, the Dow and S&P are in hot water and very close to some critical supports. Precious metals look a-okay to targets but the paranoiac in me can't help peeking ahead in this election year and wondering if 'dey got somfin' up dey'r sleeve?' for later in year. But that of course is getting way ahead ourselves. Right now everything is just dandy and that's the way I like it.

VGZ - 1st trade of the new year

Now the fun begins. The pig is down big on manufacturing contraction, profit taking and naughty Wall St. pro's with bonuses firmly in hand. Gold & silver, among other hard assets (to be discussed going forward - oil breaking out) are in launch mode, with gold headed for our 920-940 target. The fun part is because I held everything and added to beaten down tax loss selling victims in December and now there is no need to scramble for positions and in fact we can look at picking up some other beaten down stocks that have not yet stirred. My first trade of 2008 is Vista Gold (VGZ) @ 5.05 off of one of those chart patterns that I just find 'feels good'. I became aware of this stock by a blog reader last year and have had it on watch ever since. The company spun out Allied Nevada Gold (ANV) and retains a nice low cost business model with at least one Mexican property beyond the feasibility stage. But I am not a fundamental analyst when it comes to miners, so if there is any interest you must go and read the reports, PR's, etc. I have simply bought the chart here and may sell at a moment's notice... or not. ;-)

2007 Final

Actively managed portfolio: +11.3% (net after commissions)

The stated goal is 20-40% per year, up market or down, while managing risk (keeping relatively high cash levels) at all times. 11% cannot be considered a very successful year but 2007 was a buzz saw and the cash discipline kept me in the game through some very painful periods (at one point the port declined from +18% to -2% in the span of a very few weeks). There was a very costly vacation last summer during which I mostly let things ride and also recently a transfer out of e*trade (I shot first and asked questions later despite their pleas that all was well) during which I had to ride a couple things down lower than I would have liked.

The way I run the portfolio, I simply will not ever have a year where I make a killing (100%+ like you see some places) because I am never 'all in' and do not take the risks needed to accomplish that type of gain. But I should always outperform the broad market with another stated goal being to at least double the broad market's performance to the upside and avoid entirely any significant downside. That goal was in essence accomplished although 11% is not much better than the Nasdaq's performance.

Portfolio composition:

SHV (US T-bill fund) @ 36.5%
Gold/Silver miners (w/ some base metals exposure) @ 29.8%
Cash Reserve (current yield 4.7%) @ 20.8%
Uranium miners @ 5.3%
Base metal & gold royalty company @ 4.9%
Canadian Oil & Gas royalty trust @ 2.7%

Again, I want to wish you dear readers good luck in 2008. Keep your heads screwed on straight in the face of what is sure to be a blizzard of conflicting information coming at us.