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COMMENTARY for Thursday
TODAY'S ACTION for Thursday
Rick's Picks for Thursday
The futures look like they are still on track for a predicted surge to 1053.00, although the bullish argument would weaken if they haven’t accomplished this by Friday. Although the September contract failed to push past some key, late-August highs near 1038.00, most of the action took place close to those highs and well above the meatiest part of the supply zone beneath them. Night owls can try bottom-fishing at 1029.75, a midpoint pivot, using a stop-loss no wider than 1.00 point. If the trade works, consider taking partial profits or implementing a trailing stop as early as 1033.00. _______ UPDATE (1 a.m.): The pullback went no lower than 1030.75, missing our bid by a full point. Signs now point to a minimum 1040.00, or 1044.00 if any higher. Either can be shorted by scalpers using a very tight stop-loss, but you’ll be on your own thereafter.
The futures blew past a 2.9048 midpoint resistance so easily that we should infer that the 3.0695 Hidden Pivot target with which it is associated is very likely to be achieved. A pullback to the midpoint should be viewed as a buying opportunity, but I’d wait for the turn higher, assuming it comes, so that you can board on a “camouflaged” signal.
Our offbeat “strangle” in Goldman is starting to work, since the September 170 call we bought for 2.00 traded as high as 3.40 yesterday. Its purpose was to slightly leverage the upside, thereby lowering the effective cost of four Jan 130 – Oct 130 put spreads that we also hold (for 3.40 apiece). Today only, offer the call to close for 5.60. If the order fills, it will reduce our cost basis on the spreads to 2.50. _______UPDATE (10:50 a.m.): With Goldman up more than $4 so far this morning, bucking a lackluster stock market, we easily sold the call for 5.60. Do nothing further for now.
The short-term picture would turn mildly menacing if December Gold were to print down to 981.40 today. There were no promising handholds for nightowls as of 7:10 p.m., but I’d suggest looking on the 5-minute chart if you are seeking camouflage to get long with a penny-ante stop-loss.
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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.
SIDE BETS for Thursday
My minimum downside expectation is still 76.05, a Hidden Pivot that you can interpolate for trading purposes in whatever way you choose. If the support is breached, look for the weakness to continue down to at least 75.57.
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Gold Waiting to Pounce on Summit’s Failures
by Rick Ackerman on September 10, 2009 12:01 am GMT · 8 comments
With the G-20 meeting in Pittsburgh just two weeks off, we didn’t expect gold’s widely anticipated push past $1000 to be a piece of cake. Indeed, Bernanke & Friends are probably throwing everything they’ve got at gold right now to suppress its price. And for all we know, Uncle Sam has loaned every ingot (supposedly) in Fort Knox to carry-traders at J.P. Morgan and Goldman Sachs. The ability of these well-connected bullion bankers to borrow more or less unlimited quantities of physical gold is for them even better than a license to print money, since money itself is most surely not what it used to be. The feather » Read the full article