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COMMENTARY for Wednesday
TODAY'S ACTION for Wednesday
Rick's Picks for Wednesday
Let me add some technical heft to the observation in today’s commentary that the Gold Bugs Index looks ready to break out. Specifically, HUI appears bound for a Hidden Pivot target at 361.53 that lies just above a key September peak. The implication is that we are about to see the creation of the third bullish impulse leg of weekly-chart magnitude in more than four years. Moreover, if the target is breached on a closing basis, another at 391.16 (!) would come into play. The provenance of both numbers is shown in the accompanying chart.
The futures have bounced from a low that fell 1.25 points shy of a 901.50 midpoint support, hinting that bulls will be in charge in the early going Wednesday. The support will remain viable as a minimum downside target provided 912.25 is not exceeded first. However, if the support is breached, that would signal more weakness to at least 891.0. The first hint of a rally strong enough to carry into week’s end would be signaled at 921.75.
We’re trying to spread off four September 10 calls we hold with a cost basis of 0.69, but so far no buyers have taken the bait. Perhaps if we raise the price it will change our luck: Offer four June 10 calls short for 0.70, good till canceled. We are not simply getting greedier, since SLW now looks capable of reaching a Hidden Pivot at 10.04 over the near term.
Goldman has come within 44 cents of a key peak at 142.00 recorded early last October on the way down. If that number were to be surpassed by even a penny, it would create a fresh bullish impulse leg on the weekly chart. If that were to occur, because we regard the stock as a key bellwether for the market as a whole, we might then expect the bear rally begun in early March to continue for yet a few more weeks, if not longer.
I’ll reiterate a potentially important target posted the other day in the chat room: 61.97. That’s a Hidden Pivot, and it is derived from the coordinates shown in the chart. The pattern has several alternative starting points that are attractive, so I’m not going to recommend shorting there in size. However, an important top somewhere near our number seems likely, and it can be shorted with a stop-loss as tight s 21 cents.
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Take any dozen good reasons for being bearish right now and they still don’t equal the bullishness of the chart shown. The undeniably compelling rally objective is 13085, a 4.8% move from current levels, and one can only surmise that the dusting the 12158 midpoint received on the last pullback (12/28) all but clinched a finishing stroke to the higher number. Moreover, it implies that bears shouldn’t get their hopes too high even if, in the next few days, the Dow plummets 324 points to retest the midpoint support. As of now, that would signal not weakness, but a screaming opportunity to get long. Hard to believe, really, but that’s what the charts say.
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NYC Gold Expo Blissfully Subdued
by Rick Ackerman on May 13, 2009 12:01 am GMT · 12 comments
The scene at the Hard Assets Investment Conference in New York City looks pretty subdued this year — an encouraging sign, since it will be time to exit precious metals when this annual event reaches the frothy stage. For now, though, frothy it is not. I’m told that there are only half as many exhibitors this year as last, continuing a pattern of decline that began a couple of years ago (when, need I remind you, gold quotes were nearly 40 percent lower). Mining and energy companies with booths at the show were oh-so-eager to » Read the full article