There have been some tremendous developments in the precious metals’ market this week and we’re therefore obliged to start our discussion there.
To begin, let’s just say that the jump higher in both gold and silver last Thursday was exceptionally large and equally unexpected. It caught a tremendous number of shorts off-guard and also spurred a good bit of independent buying. But whether or not it marks a final bottom for the three-year bear market in the PMs is a question whose answer we don’t yet have. We’re perfectly ready to jump back on the gold bandwagon if the technical evidence is on offer and advises as such. But for three full years, it’s been absent.
Let’s see what it says now.
We’ll start with silver, because the chart there is somewhat easier to read.
Here it is –
This is the iShares Silver Trust ETF (NYSE:SLV) for the last six months and it shows clearly a bullish break above three of the four most important moving averages in just the last seven trading sessions (in red). Two of those MAs were hurdled in a single day, as SLV rallied nearly 5% late last week.
But we should be quick to point out that Thursday’s wild climb on six times average daily volume (in blue) also put SLV’s Relative Strength Indicator on bed-watch, so to speak (in black). That is, we’re now flirting with a strongly overbought (+80) RSI read, and that should temper the buying, at the very least, over the near term. In a worst-case scenario, we could see a strong round of technical selling based solely on RSI.
If that, indeed, does happen – if price action moves back below the 274 day moving average and heads toward the key 137 day MA, we’ll lean toward last week’s price explosion as having been a short covering event and little more.
But if price stabilizes here above the 274 DMA (and that’s what MACD readings are indicating, having pushed above their midway waterline just last Friday) we should be in for a run higher to the long term (411-day) moving average, now at $22.65 and falling.
What about Gold?
The setup for gold is a little more complicated, mostly because she’s less temperamental than her silvery stepsister. He moves are less dramatic, produce a more muted technical reaction, and are therefore harder to gauge.
Here’s the SPDR Gold Trust (NYSE:GLD) for the last six-months –
GLD’s pop in price came on equally impressive volume, brought the metal above her same three moving averages, but didn’t set off the RSI alarm bells (in black) as silver did. The move was slightly more modest, at only 3.5%, and doesn’t look as endangered, technically, as silver.
Additionally, we may have an island reversal pattern (in red), a formation generally associated with a longer-term change in trend.
Taken together, that could mean imminent upside.
Warning: precious metals bears are going to have to tread VERY carefully here, as longer-term trend changes are very often presaged by technical bursts of the sort we witnessed last week.…
New paradigm-shifting industries like 3D printing always give birth to huge stock market winners, with 3D Systems (DDD) and Stratasys (SSYS) as the current sector torchbearers. While the competition among big-cap market leaders usually grabs the spotlight, related businesses invariably emerge with innovative ways to leverage a breakout technology’s growing acceptance and success. Today I want to bring your attention to one of those companies in the 3D printing space — 3D Pioneer Printing, Inc.— trading under the symbol DPSM.
By way of background, 3D printing refers to the process of making a solid three-dimensional object from a digital model, also called “additive manufacturing.” With 3D printing, an object is created using successive layers of material, laid down in different shapes to form the final product. Beyond the flashy headlines about guns and human skin being 3D-printed, it has already become an especially “disruptive technology” for a wide variety industries. In fact, it can completely restructure the way products are made, leading to efficiencies—along with bigger profits— for those companies adopting this revolutionary new approach.
According to Wohlers Associates, a consultancy firm, the market for 3D printers and services was worth $2.2 billion worldwide in 2012, up 29% from 2011. Ultimately, however, the size of the 3D printing marketing is expected to dwarf those numbers relatively quickly, because the technology has such a wide-range of applications. Some of these include engineering, healthcare and a rapidly expanding, diverse array of manufacturing tasks. Even the bellwether financial publication Forbes has said that 3D printing will ultimately have a “radical impact” on every industry.
Following the meteoric rise of 3D printing companies that have targeted the manufacturing needs of big businesses, several young companies began battling to bring 3D printing into the home. One of those is 3D Pioneer Printing, Inc., which has developed a simple “plug and play” software application for consumers to be able reap the benefits of this breakthrough technology either at their own businesses, or in their homes.
With the goal of bringing 3D printing to the mainstream consumer, the company has developed a flagship product called Appaloza. The Appaloza application, developed by company Chief Technology Officer Mark Flores Martin, is a cloud-based platform that allows users to manage a 3D printer from anywhere there is internet access. Just like iTunes allows you to buy songs, movies and games, Appaloza allows you to print the 3D products of your choice, remotely.
If you’re thinking how great that would be, but asking how you might actually be able to “manufacture” the object, 3D Pioneer Printing has the answer. They’ve developed a printing machine called the Wyatt, specifically designed to seamlessly interface with the Appaloza application — for which the patent alone could put this company on the 3D printing map for good.
It’s hard to grasp the game-changing economic impact a 3D printing system like this could have. In essence, individuals and smaller businesses would be able to “manufacture” what they want, ending their reliance on overseas exporters. Especially in light of the fact that 3D printers can already forge tennis racquets, shoes, belts, golf tees, pens, screwdrivers, hammers, knives, and yes, even functional guns.…
We’re going to get to our weekly trade involving Tesla Motors (NASDAQ:TSLA) in just a moment.
But first a word on Ms. Martin.
Indulge us, Willard.
Ahh, Ms. Martin.
Just the thought of the old wrinkled wretch is enough to make us want to careen off Cliffside Ridge on our way home from work.
She was a woman without sympathy, that Clementine Martin. A high school English teacher to whom we owe so much, and yet whose very name conjures in us a chilling dread.
Who was Lady Clementine Martin?
It must be said that, to her credit, the old widow was steadfast in her demands, and refused to take any half-arsed effort from any of her students. She had an uncanny ability to know if one was working at full stride, or merely cruising on native ability. And that’s probably why I despised her. She called me out regularly for not revising, rewriting, reworking or otherwise thinking a second or third time about what I’d written.
“Now, Huey,” she’d say with a cruel little smile, “you’re not the same lad today that you were yesterday, are you…?”
“No, Ms. Martin…”
“Well then, how can you live with what you wrote yesterday, little Huey? Why don’t you take another look at it, and give it back to me tomorrow with another 200 words appended.”
“Yes, Ms. Martin…”
“Yes, Ms. Martin?”
“Please make it better.”
“Yes, Ms. Martin.”
It’s from old Ms. Martin that we first learned the virtues of thinking twice – maybe of thinking at all (if we can be accused of that). The old gal was the first to apprise us of the virtues of “thinking about what we thought” simply by taking a piece of our writing, circling a sentence or two that we’d scribbled and writing “see me” in the margin.
It was later, in her office that the barbarity of the woman was fully exposed.
She’d point to the sentence in question, look at us with the same querulous smile and say in a whisper,
“Huey… do you really believe this?”
“Huey, is this sentence at all sensible? Look at it.”
What generally followed was several minutes of tortured silence (in which the old orange blossom no doubt revelled), followed by a sack of sixteen-year-old stammering, a minute or two of intense brow furrowage, some squelched tears (when I thought the writing was already lucid) and then my discovery, or Ms. Martin’s revelation, of what needed to be changed.
In the end, of course, the ‘humiliation’ was good for all concerned, despite how it was then received by a know-it-all teen who preferred to be out at football practice. It gave us our first exposure to the notion that one must regularly examine and be ready to reconsider everything one previously thought or believed. But perhaps more importantly, Ms. Martin was the first to instill in us that most cherished of life lessons – that an openness to being wrong and making mistakes is only worthwhile if one commits to changing course and navigating in the right direction.…
Hate to tell it to all our good friends and readers, but gold and silver are now careening headlong into the crapper.
And no, we take no great delight in saying we told you so.
But before we address the matter head on and offer another in a long line of money-making precious metals trades, there are a number of smaller items that need tending.
The first is this –
We made money on a couple of trades that closed with last week’s March options expiry
The first was last week’s sale of five (5) TBT March 67 PUTs for $0.38 each, for a total credit of $1.90.
No contest. We pocketed the full purse (100%).
Next was our trade from the third of March in a letter called, As the World Wars, Wall Street Waxes. There we urged you to sell ten (10) GLD March 140 CALLs, then trading for $0.16 each, for a total credit of $1.60.
And there, too, we loped the pony to the deep freeze for a 100% gain.
Now Back to Gold (GLD)
We start with good friend and long time reader, Ennio, who wrote to us on February 13th regarding our warnings on the precious metals. He wrote,
Re your call on gold, it would appear that you do not understand the fundamentals. That’s OK. As an American, you wouldn’t understand. I bet you still believe that there is gold in Fort Knox. While Yanks keep selling paper gold the Far East keeps buying the physical gold. The Far East is not interested in silver. Consequently silver is lagging gold. Look at your history. Silver always lags gold and then overshoots.
Ennio, Ennio, my dear friend… crack open a cold one and tell me – do Canadians and Irishmen know more or less than Americans about gold?
And what about Italians?
That’s right, brother. Good trading, like fine beer, knows no borders. It also matters little whether there’s gold in Fort Knox, or anywhere else. It matters none, too, who’s East and who’s West and who’s lagging and whose leading at any given moment. It matters only that you made money on the trade.
So we ask – did you make money, Ennio?
Next up is a man who identifies himself as a female bodybuilder. He’s not a well chap, to be sure, but everyone has his lot in life, and we don’t pretend to know the divine plan.
His “name” is piper marie. And he would like us to think of him like this –
[The Piper in the oh-so turgid flesh]
The poor shuck wrote the following literarily gifted comments on February 14th and March 14th (apparently the 14th is the day his government check arrives, he feels uplifted and runs to the computer to write) –
Looking pretty STUPID with your never-ending gold short. Try substituting intelligence for arrogance.
Still short gold? STUPID and ARROGANT!
The massive amount of attention being paid to the emerging legal cannabis market has overshadowed another giant market opportunity that has already taken hold in the “smokables” sector—specifically electronic cigarettes, also known as “e-cigs.” Quite simply, electronic cigarettes are a new method of delivering nicotine—absent the presence of second hand smoke and many of the other dangerous health consequences of smoking tobacco—with a market estimated to be in the multi-billion dollar range.
Today I want to bring your attention to a rapidly growing company in the e-cig industry called American Heritage International, Inc. Founded in 2010 and based in Las Vegas, Nevada, American Heritage trades on the over-the counter exchange under the symbol AHII. The company’s products are designed to create “authentic true-to-life flavor” with a soft filter tip that gives the consumer the feel of a standard cigarette.
Currently, American Heritage offers three main nicotine-based e-cig lines. They include American One, a disposable electronic cigarette; American Nights, a product line targeted to the young adult market of social smokers; and American Standard, for the military. The company also has a line of nicotine free electronic cigarettes called American Freedom, and markets smoking alternative products, such as gums and mints.
Judging from both the news flow from the company, and the issue’s stock price, sales traction for American Heritage products is robust, fueled in part by the company’s distribution network that includes well-known mass retailers like 7-11. Ten days ago AHII management announced that its premium brand of disposable electronic cigarettes had added 251 stores carrying its products, bringing the total to over 400. Those additions resulted in the expansion of the company’s footprint in California, Florida, Texas, and New Mexico, as well as the addition of two new territories—New York and Oklahoma.
American Heritage’s addition of new outlets and territories came at warp speed, according to Anthony Sarvucci, the company’s CEO. “In less than a week we have more than doubled our retail placement and broken through into the key state of New York,” Sarvucci said. “A number of large national retail outlets such as 7-11 are represented in our distribution portfolio and we are focused on nurturing an ongoing relationship with our retail partners.”
If you’re not familiar with the size and trends of the tobacco industry or its e-cig counterparts, here are some notable statistics. In 2013 alone, U.S. e-cig sales approached $1.7 billion, including $700 million from convenience store sales alone. By 2015, the electronic cigarette market is anticipated to reach $5 – $6 billion in annual sales, with industry analysts anticipating that number to reach $10 billion by 2017. In addition, while sales of traditional cigarettes and other tobacco products are expected to decline domestically, some analysts predict that by 2020, e-cigs could very well out-sell traditional cigarette products.
As so often happens in new industries with such outsized promise, smaller and less well capitalized e-cig concerns have either fallen by the wayside, or joined forces with each other to consolidate their businesses into a more powerful marketing and sales entity.…