DaBoyz were playing their cards close to their vest Wednesday night after taking the futures down to within three ticks of an obvious Hidden Pivot target at 898.00 Night owls can try bottom-fishing with an 897.00 stop-loss, but you’ll be on your own if the order fills. At 898.00 the selling will have retraced 50% of this week’s rally, so a breach of the double support would hint of more weakness on Thursday. The opening will be unpredictable nonetheless, and we shouldn’t be surprised to see a down day begin with the illusion of firmness. _______ UPDATE (1:36 a.m.): 898.00 gave way, yielding a marginal low so far at 895.50. Bottom-fishing 898.00 with a 1.00-point stop-loss would not have worked, since the expected rally carried only 2.50 points from the 897.50 low — two ticks shy of the 3.00 points needed to trigger a tailing stop or partial-profit-taking.
From the monthly archives:
May 2009
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A Motley Fool e-mail promotion that I received yesterday piqued my interest in this former ”cloud” computing hottie, which they rate as the best investment opportunity since Microsoft went public. Coincidentally, AKAM’s recent high at 23.58 created a “camouflaged” impulse leg that looks tempting to buy. Since the stock has already tripped a buy signal for a ride to as high as 24.67 over the near term, let’s try a modest speculation by bidding 0.90 for four August 25 calls (UMUHE), good through Thursday. Our bid is a nickel off recent lows, and I would not advise paying up. _______ UPDATE: We bought the calls for 0.90. Our strategy will be to spread off the risk if and when AKAM rallies, but for now sit tight.
We’ll breathe easier when the futures finally push above 935.80 but the significance of the move won’t be as bullish as before, since the rally has been interrupted by a so far three-day correction from the recent high at 934.80. I hesitate to read too much into it, but my hunch is that this subtle sign of timidity portends an unsuccessful struggle if Gold should approach the $1000 barrier within the next few weeks.
The futures were struggling to go lower shortly before midnight — much as they did Sunday night when they telegraphed the next day’s strong rally. Just below, the nearest Hidden Pivot support lies at 900.00, a midpoint whose ‘d’ sibling is 893.75. However, both numbers were getting shunned — a development that hinted of more rough times for shorts come Wednesday. Night owls can buy-stop 908.75, a tick above a tiny peak whose breach would turn the 5-minute chart bullish. This advice applies only if the rally does not correct after exceeding the first peak at 906.50 — and you’ll be on your own if the order fills. Alternatively, the least risky place to try bottom-fishing overnight would be at 900.25, stop 898.75. _______ UPDATE (10:15 a.m.): The buy-stop would have worked nicely, since the futures rallied five points after touching it. However, long positions would have required tending overnight, since the futures dipped six points from the earlier high before taking off anew. It should be clear to all by now that this rally is now being driven 99%+ by short-covering – and that pretty much everyone is as bearish and skeptical as we are. It will probably take an absolutely ruinous, once-in-a-lifetime blowoff to cure that condition.
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Okay, let’s see FAZ try to hurt us, now that we’ve acquired four October 10 calls (FAYJB) for 1.20. These pups will require little tending in the weeks ahead, but I may call on you at some point to acquire some call options in another vehicle, the better to effect a strangle-type hedge. Thereafter, with a few bucks down on the pass line, we’ll be better able to summon the proper enthusiasm when rallies happen, as they always will. This was a strategy I employed on the options floor in the late 1980s, when I was absolutely certain the bank stocks were about to collapse. They didn’t — far from it, actually — and I lost a small fortune on the thousands of put options I held. But I made it all back and much more by being very long drug stocks, including Schering Plough in its heyday. Remember: We want to come out ahead no matter what happens, and we want to have fun while we’re doing it.
A Moon-Shot Scenario in Gold
by Rick Ackerman on May 21, 2009 1:16 am GMT · 2 comments
(Although our long-term outlook for precious metals remains bullish, we doubt that gold is ready to leap beyond the $1000 barrier the next time it touches it — especially if this occurs within the next few weeks. However, with today’s commentary by our friend Chuck Cohen, we skip ahead to the not-so-distant future, when junior mining shares are likely to make dot-com mania seem relatively subdued in comparison. Below is Chuck’s rousing forecast for gold and gold stocks. RA)
Advice from Shaq, Canseco
Can you remember back in what seems now like ancient history–1998-2000, when making money in stocks seemed absurdly easy. Stocks only went up, some of them to ridiculous levels. Testimonies of instant millionaires were everywhere. CNBC was on in every barbershop. Even Shaq and Jose Canseco were dishing out advice. But then it was » Read the full article