Wednesday cinema & library (updated)

Abigail Doolittle: Runaway day likely to fail (June 6)
Keiser Report: Paper money collapse (June 5)
David Fry: Big Wednesday short squeeze (June 7)
The Guardian: Spain calls for new tax pact to save euro (June 6)
Wall Street Journal: Lockhart says Fed must stand ready to provide more support (June 6)

CNBC: Market's fate 'in Bernanke's hands' (June 6)

Le Fly: 'We are going the fuck higher' (June 6)

Reuters: Fed more upbeat on economy in Beige Book (June 6)

Turd Ferguson: 'DO NOT be surprised by a dip/profit-taking' in metals (June 6)

Financial Post: Gartman admits he made bad call on gold (June 6)

Barron's: Hedge funds have gotten extremely bearish (June 6)

Scott Bleier: Pressure valve day (June 6)
Forbes: JPMorgan's other messy problem: MF Global's missing money (June 4)

Jim Rogers: 'Please get worried' (June 4)

CME mafia: Delaying the inevitable

5:19 pm (Hawaii) The CME mafia did what they do best: try to cripple markets that would work just fine without them.

Today, at around 2 pm Eastern, the CME (Comex) Group put out a margin requirement hike of 22% on gold. It wasn't a shock. Talking heads brought up the probability in the past few days. Gartman and another guy couldn't stop talking gold into the mud. Gartman's a smart dude, but he came across today as a whiner who had sold gold too early. That's actually true. He's sold gold twice in the past few weeks.

So what happens now? Spot still shot up as high as 1816 after hours. After some profit-taking, it's now it's at 1789 in Asia, having bounced off 1780. That's right — Hong Kong, Tokyo and Sydney don't give a flying fuck about you, CME bitches. Keep bringing the margin hikes. You know people are going to buy and buy whether its with fiat or margin. I don't trade on margin, so I won't be worrying about that crap anyway.

It's just preposterous how Gartman takes the soap opera box and insists that gold "must" be contained through margin hikes. Is he for real? Gold has shot up a lot in the past week, but in orderly fashion. The price had been suppressed for decades due to numbskull monetary decisions. But now that it's free, dunderheads like Gartman who unload half their gold think it's necessary to manipulate the market?

The most pathetic thing is that he and other talking heads keep repeating their obnoxious stories about hearing working people talk about buying gold. "That's when I know it's time to get out." Working people have bought and traded gold before. Maybe they didn't talk about it. But it's pretty lame to see this superiority complex of these "experts". Pompous asses, indeed.

Well, I give him and the other doodooboys this: they can get more gold bullion cheaper now. Gartman can get "long of gold" again soon. Or maybe he and the other barking seals can keep bitching, keep insisting that the CME needs to do more. Maybe he just wants more yellow metal at 1700. Or 1600. Give Gartman a seat on Fast Money and he turns it into a bully pulpit. He rambles about owning "the boring stocks." So why is he on the desk? He's better as a guest. Far better.

Looks like Asia might take spot price back up above 1800. CME mafia whacked silver with five margin hikes in nine days back in early May. My guess is they'll use at least three margin hikes on gold. It won't matter. Central banks. Grandma and Grandpa in Shanghai. Waitress in Budapest. Guy sitting next to the beach in Hawaii. We all will get all the gold we can and there's nothing that can stop us. That's the power of REAL MONEY.

Wednesday afternoon Shhhh!

Library Time

Suzzallo Library, Seattle

7:35 am (Hawaii) Fast Money Halftime: Brian Kelly doesn't believe Bernanke ... Gartman is bullish "of gold" and short copper. 

Dan Norcini: Gold chart analysis (June 22 2011)
Gary North: Austerity is good (June 22 2011)
Bob Chapman: 'The banks represent corporatist fascism and monopoly' (June 22 2011)
Zero Hedge: Bill Gross just set the date for Operation Twist 2 and QE3 (June 22 2011)
Zero Hedge: Spiegel Revisionism 101 (June 22 2011)
Henrik Müller: If the Euro fails, Germany will be responsible (June 22 2011)
Zero Hedge: New York Fed refuses to disclose data on missing $6.6 billion (June 22 2011)
Zero Hedge: China will suspend open market operations tomorrow (June 22 2011)
Bloomberg: Existing-home sales in US fell in May to six-month low (June 21 2011)
Vedran Vuk: Grim decade for employment ahead (June 21 2011)

(video) The revolution has begun in Europe (June 21 2011)

Financial Times: Greek savers rush for gold (June 21 2011)
Jeff Clark: If the Dollar goes, what happens to your portfolio (June 21 2011)
Gary North: The Federal debt elevator: going up (June 18 2011)
• "The can will grow too large to kick. But until then, the voters will continue to imagine that there are free lunches in life. They will continue to grant the politicians a free ride. When the can is finally too large to kick, the defaults will begin. If you hold IOUs from the government, you will find that you, not the can, will get kicked. Hard."
Dr. Constantin Gurdgjev: Ireland vs. Iceland (part 1, part 2) (Feb 27-28 2011)
• Iceland's default has led to revival; Ireland bogged down by ECB
Bix Weir: The hidden meanings in the new $100 bill (Nov 12 2010)
CNN: High tech $100 bill (Apr 22 2010)

Golden armor

10:03 am (Hawaii) Opened a partial position on XG at 10.73. If it slips to 10.43 or so, I may add a few more shares. I'm expecting a gradual gain in Spot Gold this week with so much uncertainty in Europe and so much bullishness on PMs in China and other global markets. Unlike Gold, Spot Silver is not QE-proof, and until there is evidence of more POMO funds going into the market, silver will diminish gradually with the equity market ... unless today's Shanghai news is just the tip of the iceberg.

I'm not hoping (well, yes I am) that the news (and anticipation) of Shanghai's silver futures market (due to open in December) will send the spot price to the moon. I'm hoping that we get more consistently higher prices that will counter any CME Mafia attacks. I do NOT believe in using margin, but I am NOT against it either. Free markets should allow leverage as long as borrowers make good on their debts. Goes both ways, so more power to the borrower and hopefully he doesn't get blasted when volatility hits. (And those of you who rely on leverage, you know anything that is overhyped is going to be too good to be true; nothing is an automatic home run.)

So, 1. I don't expect Hong Kong gold futures or Shanghai silver futures to kick spot gold to 2000 or spot silver to 50 (or 100), but 2. I do hope that these additions will keep the market stable without losing volatility that traders like me want to play in. Otherwise, I'm staying in cash.

Imagine tens or hundreds of millions of Chinese citizens trading paper gold and silver ... while also owning a ton of physical silver and gold. The central bank there could pull a mafia move with major margin requirement changes on any spot peak price ... but just getting to that peak would be astronomical in height and speed.

The Australian: Chinese demand keeps gold soaring (May 23 2011)

Forbes: You should know what the People's Bank of China is up to (May 23 2011)

ETF Daily News: Will the gold bubble burst or is it buying time? (May 23 2011)

Larry Edelson: "I expect silver support ($32) to soon give way" (May 23 2011)

(video) Tony Segami: Dumpster diving for Japanese bargains (May 21 2011)

(video) Tony Segami: A tale of two central bankers (Apr 9 2011)

Update 11:25 am (Hawaii) Dennis Gartman on the euro and gold during Fast Money:

"Absolutely, I've said it for months and months and months. You want to own gold but predicated in non-US dollar terms. You want to own gold in euro terms. You want to own gold in sterling terms. You want to own gold in Swiss franc terms., and if you take a look at it, even if gold in US dollar terms is not making new highs, gold in euro terms today made new highs. Gold in sterling is making new highs. Much more impressive to be long of the gold market in euro terms, in sterling terms, in Swiss franc terms. I was impressed today that gold traded higher on the day. Even in US dollar terms, as crude oil was down at one time 3 dollars, and most commodities were going down. ... People are moving out of the euro and they're moving into gold as the other currency. It's a very logical trade."

Update 1:17 pm (Hawaii) A few thoughts from James Turk via King World News:

“I think this summer is going to surprise a lot of people. Many are thinking this is going to be another typical summer where precious metals prices are weak, but it doesn’t always happen that way Eric. Sentiment is set up this way because it has been 29 years since we have seen a big rally in the summer. Back in 1982, the Mexican debt default lit a fire under the precious metals and the gold price nearly doubled over the next six months.”

I noted the other day that Spot Gold has meandered in the past two summers before spiking up later in 2009 and '10. But things are different now, aren't they?

King World News: James Turk interview (May 23 2011)

Update 1:45 pm (Hawaii) Hugo Salinas Price interview with James Turk back in February.

Update 3:28 pm (Hawaii) Some stuff I watched and read this afternoon while procrastinating. Spot Gold is climbing, now 1518 with Hong Kong open. Spot Silver up, too, now 35.14.

Dan Norcini: Gold strength in euro and British pound terms firming up (May 23 2011)

Chris Martenson: John Rubino interview

(video) H1INC: Why you can't crash JP Morgan by buying silver (May 13 2011)

Sean Brodnick: The golden bottom (May 20 2011)

Daily Bell: Hugo Salinas Price on the nature of money (May 23 2010)

Too early for cheap buys?

DJ -366 (-2.6%)
NASDAQ -74 (-2.6%)
S&P 500 -39 (-2.5%)

AAPL 170.80 -2.70 (-1.9%)
Apple reports on Monday. My favorite, an A grade stock. If they can thump the estimates and raise guidance, AAPL becomes an A+ stock. Still trading above its 10-day SMA (168).

VMW 97.74 -3.81 (-3.75%)
VMware reports on Wednesday. May sell off on good or bad news because of the run from 50 since August. I'm late to this stock, but I understand the strength it has in its industry — its dominant stance. Currently an A- grade stock and it's trading below its 10-day SMA (101). Big run, decent pullback, hugely popular. That means it won't stay down long. Very tempting.

BIDU 314.75 -5.25 (-1.6%)
Baidu reports on Thursday. Google's upswing since yesterday's earnings report could (should?) have a mirror effect on Baidu, right? Why would it have a positive effect on earnings rather than today? (Maybe the selloff was just too strong and broad.) I'm split on that notion. Nevertheless, BIDU has a shrewd CEO in Robin Li, and I don't see him disappointing the street as long as he's got Big Red backing the Co up.

Baidu is trading below its 10-day SMA (320), which sounds preposterous considering this was at 161 on August 16. (The 50-day SMA is a bit more reasonable at 254.) Tempting here, also.

Looking back, I should've sold Blue Nile and China Digital TV when I had nice profits. I bought NILE at 80, it ran to 106, and now is back at 81. I bought STV at 29, 32 (and 51). It ran to 55. Now it's back to 39. Some positions are holds. Other positions are trades. These two should've been trades.

NILE is trading below its 10- and 50-day SMAs, but I hesitate to add more here. Even if I disagree with the downgrade (Citigroup) and even if I don't pay mind to the insider selling, the market is less than pleased. Can't fight the trend, can't add more here. I'm holding my little position.

STV is a long-term hold, but I would've profited by selling half my position high. The pullback for a recent IPO is almost destined. But I will hold on here.

Amazon is taking up space in the portfolio. I got in at 89, which is where it remains today. Though today's selloff hit tech and retail hard, AMZN lost just 10¢. The stock moves drastically only on earnings. The astronomical P/E keeps the stock on a leash for most of the quarter. I may get out of AMZN to raise a little more cash. OK, scratch that. I just realized that Amazon reports on Tuesday. Very interesting.

This isn't exactly a bargain sale here, but I've become severely underweight in two of my favorites, Crocs and Nintendo. Haven't sold a share. Just gotten heavy with other stocks. This pullback is an opportunity to fill up on CROX and NTDOY.PK, or perhaps to just wait until Monday. My Friday buys have been stellar in the past few months. Hmm...

Crocs is a relative bargain here at 65.99, well below its 10-day SMA (68). Q2 earnings were reported on August 14, and if Q3 comes out three months later, that would give us longs a Nov. 14 target. That's 26 days away. Too early to add more?

Nintendo (70.80) is milking the Wii and DS and everything it owns for all it can — but without emptying the whole sack. No question in my mind that the Co will deliberately ration the Wii as long as demand is huge. Remember, Nintendo was kicked to the curb, particularly by U.S. shareholders, for a few years there. The Co remembers this and isn't just tight with the product overseas, but is also overly discerning with its shares in Tokyo. (Investors there can only buy in bundles of 100 shares, and that comes out to about $41,000. Talk about an illiquid market in stock 7974.)

Today's pullback brings Nintendo's stateside pink sheets below the 10-day SMA (72), but I'll wait. The recent run above 70, all the way to 75, needs time to digest in this new box/trading range. I'm loathe to buy it high as I've done before.

Is it just me or was Maria Bartiromo a lot more hyper today on the trading floor? Luv Maria but when the market is on a major selloff, it's like watching a skittish cat trying to run across a busy freeway. When she's back at the desk, Maria is back to her calm self. Time to pick up some lululemon pants and hit the yoga workouts, Money Honey.

Oil hit $90/barrel today, then pulled back to 88.60. Guy Adami on Fast Money thinks the next $8-10 is downward. Dennis Gartman said crude should be at $75, and added that gold will fall if we are in a recession, as Julian Robertson said on CNBC today. If oil is due for a pullback, that will exacerbate the declines for PTR and CEO. I still want CEO, but I want it cheap. It won't get back to 92, but I will still be picky.