Since Chuck Cohen has divulged some of his favorite “juniors” in the commentary section, let’s actualize the information with some buy recommendations based on Hidden Pivot correction targets. On the hourly chart, there’s a midpoint support at 0.1266 that we can use for now. Bid there, or slightly above, for 5000 shares. I’d suggest keepng the bid out of sight until such time as the stock trades below 0.1300, assuming it does.
From the monthly archives:
August 2009
Pay attention at your peril, since Gold looks like its trying to drive those who care most about it crazy. Yesterday’s rally failed by a smidgen to hit our bullish tripwire, and that’s why we should continue to use such benchmarks to filter out false signals. Scalpers can bottom-fish at 937.50 tonight, provided 946.20 has not been exceeded to the upside. Looking at the hourly chart, we’d need to see a thrust to at least 968.10 by mid-week to turn it bullish. Above that price, there would still be risk of a stall at 978.00, a Hidden Pivot, but a close above it would announce the test of $1000 we’ve all been patiently awaiting. Regarding downside risk, I see none worth mentioning at the moment.
We hold two September 95 puts for 1.76 that we bought when the Diamonds rallied yesterday morning to within a single cent of our Hidden Pivot target, 95.82. Continue to offer two Setpember 92 puts short against them for 1.40, good-till-canceled, but stop yourself out of the existing position if DIA touches 95.70 today. ______ UPDATE (1:15 p.m.): Although option volatility got crushed on this morning’s rally to nowhere, using a 1.70 stop-loss, we still managed to exit the puts for about what we’d paid for them. At this rate, we can painlessly pick tops for the next two years if that’s what it takes to nail the Big One.
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Let’s start building a calendar spread again, legging into the buy side first. I’d like to start with March 15 calls, but since there are none, we’ll work on the December 12.5s (SLWLV). Bid 0.50 for four, 0.45 for six more, and 0.40 for another six, all good-till-canceled. Once we lay in our inventory, we’ll look to short September or October 12.5 calls against it. _____ UPDATE (1:22 p.m.): The calls were un-buyable at our price earlier in the session because Silver Wheaton began the day with a wicked short-squeeze. However, the stock has since retraced most of this feint, allowing more than 500 December 12.50 calls to trade at the top of our ladder. Assuming four calls bought for 0.50, we are now bidding 0.45 for six more and 0.40 for another six, both good-till-canceled. _______ FURTHER UPDATE (August 26, 12:12 p.m.): The December 12.50 calls traded down to 0.39 today, so we are filled on the order. We hold 16 calls with an average cost of 0.45. Do nothing further for now.
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Opportunity beckons, since the Diamonds are closing on a Hidden Pivot resistance at 95.82 that looks likely to cause a stall. Buy two September 95 puts (DAVUQ) if and when the stock gets there. I estimate they'll be selling for around 1.76 if you want to park a limit order with your broker, but you may be able to improve on that price by tracking the option bid/offer as the stock nears the target. _______ UPDATE (10:51 a.m. EDT): This one is working nicely so far, since the Diamonds have rallied to 95.81, a penny from the target, and the September 95 puts traded down to 1.75, a penny below where I'd suggested bidding. Officially, then, we hold two puts for 1.75. Use a fairly tight stop-loss for now at 96.07. FURTHER UPDATE (1:52 p.m.): Lower the stop-loss to 95.55 for the rest of the day, and at the same time offer two September 92 puts short for 1.40. The order is good as long as you hold the September 95 puts.
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If Goldman falls without having bettered Friday’s 164.90 high, you can bottom-fish a midpoint support at 160.75 with a stop-loss as tight as 15 cents. If the stop is hit, odds of a more serious correction to as low as 156.61 would shorten.
Gold was flagging lower Sunday night after Friday’s spirited thrust, but buyers weren’t giving up much ground. The so-far low of the pullback is 952.20, and if it holds, the futures could put bears on the ropes by vaulting a Hidden Pivot midpoint at 959.60. That would suggest more immediate upside to at least 967.00.
A Hidden Pivot target at 1027.50 first noted here on August 14 looks relevant at the moment, since Friday’s high at 1026.75 came within three ticks of it. One above that number, however — a prospect that is not exactly a longshot bet in this never-ending bear rally – the next likely stop would be 1046.00, a target that comes from the daily chart (where A= 772.75, March 30). More immediately, a lesser target at1034.00 can be shorted by scalpers with a 1.25-point stop-loss provided it’s hit in the first hour and 1020.50 hasn’t been exceeded to the downside first. _______ UPDATE (10:56 a.m. EDT): The futures have made a precarious top at 1034.25 exactly 57 minutes into the session. If you shorted at my number, stick with the 1.25-point stop-loss that was given. _______ FURTHER UPDATE (1:11 P.M.) : The futures have dived to 1025.00, so I’ve suggested covering half of any shorts from 1034.00 at 1026.00 or lower. You’ll be on your own now, but you should hold a small piece of the initial short for a possible grand slam. If you shorted a single contract, trail the stop 3.25 points — or wider at your discretion if you’re playing for a jackpot. (You can set the stop above 1035.00 if this is your goal.)
