(Following is the third installment in a series of articles by Chuck Cohen, a seasoned and highly successful investment consultant who lives in New York City. We will be featuring Chuck's thoughts regularly at Rick's Picks in order to expand our coverage, in particular, of junior mining shares, a core area of his expertise. In the coming weeks, Chuck will take up the topics of gold as a core investment, and gold as a speculative vehicle. Today he tackles gold's usefulness as insurance against financial calamity". RA) No One-Size-Fits-All Strategy In spite of the sharp drop in shares over the past nine years or so, most investors remain firmly committed to common stocks. Mutual fund statistics show that very few holders have pulled their money out of their funds. And the recent "Big Money Poll" in Barron's shows that the big guys are even surer than they were even at the very top. It is clear that investors have been stirred, but far from shaken, by the decade's decline and by our faltering economy. And gold? To many investors and even professionals, buying gold is like traveling to Myanmar or northern Pakistan: Few dare to venture there. The truth is, that to our Ivy League and Keynesian educated financial community, gold is viewed as a superstitious relic. I don't seek to persuade you to sell everything you own, put it all into gold and gold shares, and then buy guns and ammo before retreating to a barricaded cabin in the Ozarks. Instead, I hope to try to make you understand that gold investments come in different sizes and shapes, with varying degrees of risk and reward. It's not an all or nothing choice. The better you understand gold, its attributes and how it fits into your financial planning, the
Monday, July 13, 2009
What Could Happen to the Metals
– Posted in: Current Touts Free Rick's PicksI am going to deviate a little today being I did post 3 touts over the week end. I am going to postulate on what could happen if my indicators are correct and there is a rally this coming week. I have already covered gold so I will cover two others in a group session. All work is based upon the daily chart. SIU9 last: 12.665. The D for the move down is ___, I am rounding for ease of typing. For price to rally it would have to go through ___ and then P would be ___. If short I would use a stop at _____. On the way to ____ there should be resistance at ____ and ____. There should be some congestion around the _____ area and maybe a slight retracement. At this time pressure is trying to turn up from an over extended area on the chart. On a longer term chart Price was rejected at PO2 = ___ and this current retracement began from that level. HGU9 last: 221.95 Price has been trying to reach PO2 at ____ and been unsuccessful on the move down. For price to move higher it would have to go through ____ and then P would be ___. Look for resistance at the ____ level. There could be a slight move down to a support area of ___ to ___. On a longer term chart Price met resistance at P=___ and this is a retracement down from that number. Silver is halfway between gold and copper as a fundamental entity. It is both an industrial metal as well as a semi geopolitical barameter. Its value is determined at times by manufacturing demand and at other times it is a reflection of the buying power of the dollar and inflation hedge.
Whats Next?
– Posted in: Rick's PicksAll you hear on the radio and on TV is that a head and shoulders neckline has been broken. I found that a head and shoulders formation works only about 37% of the time. That number could have changed over the years, but I look at the formation and realize that a lot of people will follow it. Under those cicircumstances it can not be totally ignored. When I first posted on this site I wrote that my indicators said price action should be lower and it has been for the past few days. Now things seem to have turned and I am seeing upside pressure starting to be applied to some key sotcks and indicators. If you are short I would consider keeping my stops really tight. You can always re-enter at a later date. Whether Friday was a ond day wonder or not I can't tell. As you can tell from my posts on GC, S and NRT over the weekend things are a mixed bag. Right now it looks like both stocks and commodities could move higher. A bad earnings report could change the outlook, but right now it doesn't look like that is going to happen. If the maximum pain theory is going to work at this option expiration Friday, then the SPY will have to press the 91 strike price. If that is going to happenthan a lot of stocks are going to have to rally. Ira
