Yesterday morning, an hour into the new trading week, we covered a small short position in the Diamonds, booking a loss of $92 on some September put options. This speculative bet, initiated on the closing bell Friday, was inspired by a hunch that if Mr. Market really wanted to catch investors with their pants down, the Tuesday after Labor Day would be a perfect time to do it. Alas, even with news that should have been helpful in catalyzing a stock-market plunge, stocks trudged higher. The news concerned consumer credit, and it could have left no doubt about the dire condition of the American consumer. He in fact » Read the full article
The 1053.00 target given here yesterday remains valid, but the bullish case for the near term was weakened by the fact that all of yesterday’s action took place below a 1027.75 peak recorded on the way down a week ago. Because the plunge from that peak would have trapped many bulls, we should regard it as daunting if not impermeable. If the futures take a stab at it today, the effort should be considered ineffectual unless it exceeds the look-to-the-left peak at 1031.00 recorded on August 30.
Yesterday’s breakdown was serious, although I’d stipulated that DXY close for two consecutive days below 77.54 before we assume the worst. Tentatively, however, we’ll look for a quick drop to at least 76.05, or to 75.57, the Hidden Pivot given here originally, if any lower. My worst case number for the period preceeding the G-20 meeting in Pittsburgh at month’s end is 72.93. My hunch is that such pronounced weakness in the dollar is unlikely ahead of the meeting, but if it comes, stocks are going to fall too, and steeply.
Silver’s most recent peak at 16.860 fell 8 cents shy of a clear Hidden Pivot at 16.940, so we should assume the December contract has at least a little further to go before it hits something solid. Position traders should consider lightening up, with the goal of replacing on the pullback any shares sold near the target. If the futures close above 16.940 for two consecutive days, or trade more than 10 cents above it intraday, that would be a very bullish sign going forward.
Yesterday’s patently spurious plunge should look more like a swoon by Wednesday mid-morning, when I expect gold will have recovered. The sell-off was very obviously caused by the nasty bull trap that ran stops placed slightly above a 1008.80 high made shortly after 4 a.m. In a bigger picture, the 1074.50 target given here earlier remains valid, although I should introduce another, lesser one at 1016.60 that looks capable of showing some stopping power. The less stopping power it displays, the more quickly and powerfully the next thrust is likely to develop.
Tax selling in this vehicle could produce a climactic bottom in the weeks ahead, but the range of possible targeted lows is quite wide, depending on how fierce the washout is. There are at least two logical hidden supports where we might look for an important turn: at 20.83 (daily chart, A=54.56 on 8/24/13); or at 17.30 (see inset). Bottom-fishing the higher Hidden Pivot poses relatively little risk, since we can use a very tight stop-loss, and because a bounce from that price that is at least tradable, if not sustainable, looks quite likely. I’m going to back up the truck myself — buying at either number or both, tightly stopped — and would do so not as a long-term play, but as a high-odds trade. Please note that although the 20.83 pivot has the potential to produce an important low, I’ve selected a chart that shows the alternative target at 17.30 so that you can judge for yourself how compelling it looks. One further note: Because yesterday’s plunge exceeded the previous bear-market low at 22.34 recorded on 11/5, it should have stopped out enough bulls to produce a spirited rally over the next day or two. Under the circumstances, if such a rally fails to materialize, it would portend yet another wave of selling ahead. _____ UPDATE (December 17, 11:59 p.m.): Like gold futures, this vehicle rallied yesterday without quite reaching a downside target. That’s mildly bullish, but GDXJ will need to pop above 23.71 on Thursday to ‘actualize’ the encouraging start.
Crude is getting kicked again Sunday night, although the January NYMEX contract is trading 85 cents off its low at the moment. The so-far low is 56.25, but I would expect the futures to get closer to my 55.43 target (see inset) before they attempt to rally in earnest. Night owls can try bottom-fishing using ‘camouflage’ nevertheless, but if you want to use a simpler, albeit riskier, strategy, you can bid 55.43, stop 55.34 for a single contract. I have difficulty imagining significantly more sinkage without a bounce from somewhere near here, but if the stop gets schmeissed, the next logical stop on the way down would be at 53.45, or 50.69 if any lower. However robust the bounce, assuming one comes, my bear-market target is still $31. The economic world would be a very different place at that point, and I don’t mean in a good way. _______ UPDATE (December 15, 10:39 p.m.): The 55.43 pivot is holding so far on a closing basis, having been exceeded intraday by 0.41 points. That’s more than I would have expected, but I still think we’ll see a strong rally from here, or from very near these levels, since the target is so clear and compelling. If not, and the futures continue their relentless plunge, the targets given above, 53.45 and thence 50,69, will obtain. Traders with no position, or those who are managing the risk of a short position, should note that the January contract was in an uptrend late Monday night that projected to exactly 56.13. You can find this target on the 15-minute chart using the following coordinates: a=55.17 (12/15 at 4:45 p.m. EST); b= 55.85 (6:45 p.m.); and c=55.45 (8:10 p.m.). This pattern looks reliable enough that we should infer more upside to come if 56.13 is exceeded by more 10-15 cents. _______ UPDATE (December 16, 9:33 a.m.): Crude fell this morning to a newe multiyear low at 53.60, just 15 cents from the target given above. If you caught the 1.16 bounce from the low, you should have taken a partial profit and secured what remains with an ‘impulsive stop-loss’. The bounce is less than I might have expected, and if the low gets taken out we’ll likely be looking at more slippage to 50.69.
Idaho North [OTC symbol: IDAH] offers investors a potentially lucrative synergy between two very successful entrepreneurs. CEO Mark Fralich started out as a reporter with the Associated Press News Service but went on to co-found Spoval Fiber Optics before moving into the exploration business with Mines Management, Consolidated Goldfields Corp. and some other natural resource companies. Like most executives in the exploration business, he is an aggressive risk-taker. But he is also an astute bettor, perhaps never moreso than in his choice of Thomas Callicrate to head up his technical team.
Callicrate is bottled lightning, a geologist who may know more about ore deposits in Nevada than anyone else in the world. I counted no fewer than 250 file cabinets in the barn-size work buildings that surround Callicrate’s spectacular home in Carson City. He seems to have committed every geological map in those cabinets to memory, and he can tell you exactly where each and every rock came from in the massive stone fireplace that dominates his living room and in his beautifully landscaped gardens. The fact that he chose to affiliate with IDAH attests to his confidence in Fralich’s ability to exploit to-the-max whatever ore deposits the company is able to find.
From a technical standpoint, the company’s shares have not traded for long enough to offer a sound basis for prediction. The stock has fluctuated between 0.08 and 0.24 since being OTC-listed in November 2013. That said, it would be no worse than an even bet to hit 0.3000 a share, nearly double its current price, if it can push past the red line at 0.2150. That’s a Hidden Pivot midpoint resistance, and it will remain valid as a minimum upside target for the near term unless the stock falls below 0.1300 first.
I first recommended this stock in early September after being very impressed with a presentation by its CEO, Atul Sabharwal. The company provides mobile marketing solutions to a growing list of clients that includes Wal-Mart, ESPN, Lexus, Taco Bell, Target, Johnson & Johnson and Minute Maid. Snipp’s shares are listed on the Toronto Venture Exchange (TSX: SPN) and on the OTC in the U.S. (symbol: SNIPF), but yesterday it filed with the SEC for an exchange listing in the U.S. From a technical standpoint, SNIPF looks to be basing for a move to as high as 0.4385. First, though, it would need to trip a buy signal at 0.2878, then to clear the 0.3380 midpoint pivot (see inset). The company continues to win new business at a rapid clip, and that’s why I expect the earnings report due out November 15 to be strong. Full disclosure: I hold shares and warrants in this company. _______ UPDATE (November 13, 10:49 a.m. EST): Two days ahead of the earnings report, the stock has taken quite a leap, with an opening bar high today at 0.38 that was 36% above yesterday’s close. This means the 0.4385 target flagged above is well in play. _______ UPDATE (6:49 p.m.): The stock took a leap Thursday back up to the midpoint pivot at 0.3380 associated with the 0.4385 target. Regarding earnings, they will be out later than expected, in line with the Canadian deadline for filing. Stay tuned. _______ UPDATE (November 17): Snipp has reported 252% earnings growth for Q3. Click here for the company’s latest filing. _______ UPDATE (December 5, 10:13 a.m.): Zounds! The stock has popped to 0.40, quadrupling in the eight months since I first recommended it. My immediate target is 0.4356, but SNIPF will need some rest if and when it gets there. _______ UPDATE (December 9): Bulls are apt to be a little winded after the recent push to 0.4314, less than a penny shy of the target shown. We’ll give the stock time to consolidate for the next thrust. ______ UPDATE (December 10, 6:12 p.m.): With the broad averages plummeting yesterday, Snipp bucked the tide, hitting a new all-time high at 44.10. This opens a path over the near term to 0.4906, or perhaps 0.5193 if any higher.
A minor Hidden Pivot resistance at 10.57 is the nearest impediment, but if UNG gets past it and a peak at 10.75 made in late August on the way down, it would be clearing the path for yet more upside. The implications will not affect the daily chart, however, until 16.27 is touched.