Wednesday, January 28, 2009

If GDX is ready to rock and roll, the correction off Monday's high should reverse today from 33.18, a Hidden Pivot midpoint as well as my minimum downside target for the very near-term. However, we'll play it conservatively with a bid at 31.93, the 'D' target associated with the first number. If our bid misses the turn, we can play catch-up later, using a with-the-trend entry strategy.

I don't want to get anyone raped with a market order to buy calls on the opening, so I'll make this recommendation catch-as-catch-can. Goldman Sachs, fated to trade $29 or lower at some point in the distant future, looks like it's headed up to at least 84.40 over the near term. The very clear midpoint pivot associated with that target lies at 78.59, and so a decisive breach of that number would raise the odds of completion to the target. I suggest you allow yourself to get as bullish on the stock as your appreication for the pattern shown in the chart will allow. It looks pretty promising to me, but that is not justification for jumping on call options willy-nilly. _______ UPDATE: The nasty little sonofabitch opened at 84.42 (!) on a huge gap, trading as high as 85.93 in the first seconds. So much for that idea.

Someone in the chat room mentioned that Jim Cramer -- a power-drunk maniac who can move a thousand bozos with just a few words -- has put a hex on Barrick. He evidently thinks the stock is going to fall 20%, but I say: Jim, get a grip! As far as I can surmise, Barrick is about to rally by 24%, to a Hidden Pivot target at 45.97. Odds of the stock collapsing after having created the beautiful impulse leg shown in the accompanying chart are slim to none. Incidentally, I have been thinking about adding a "Cramer's Korner" at Rick's Picks. We would take his specific recommendations and re-calibrate or reverse them to do something he only very rarely does -- i.e., make money with them.

A Hidden Pivot at 8302 (shown in the chart) beckons as a minimum upside projection for this rally. The pattern is somewhat obscure, and so I can recommend shorting at the target with a 4-tick stop-loss. The chief risk here lies in the close proximity of the target to round-number resistance at 8300. There is "structural" resistance at 8315 that you could use to place the stop-loss, but 12 ticks seems too expensive, since any progress above the target will bring the futures into the magnetic field of the 8392 peak recorded on January 18. There is also a more conservative play -- shorting 8282 with a 4-tick stop-loss -- that I can also recommend. It leans on the one-off 'A' at 7872. ______ UPDATE: A 4-tick stop-loss would not have worked, not quite, since the futures topped overnight at 8294 after a 201-point rally. Cancel the 8302 offer, since YM seems unaccommodating this morning.

DaSleazeballs are effortlessly achieving this evening what they were unable to accomplish during the regular session -- i.e., running the futures up to at least 862.50, a Hidden Pivot target that seemed certain to be achieved after a short-squeeze on Monday blew past four intraday peaks. So spirited is the bidding tonight that we're going to raise our benchmark to 873.75, a Hidden Pivot that can be shorted with a stop-loss as tight as two ticks. Nightowls could try to get long on an abc pullback, but so far there's only been one this evening that could be called an opportunity. _______ UPDATE: The futures peaked overnight at 863.75, then pulled back to 856.50 befopre finding traction. The higher target remained valid -- and short-able.