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
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.
Tesla got short-squeezed to within 28 cents of the 86.72 target I’d proffered early Monday morning, but a second-wind rally to 88.00 suggests it’s got eyes for 104.44, the ‘D’ target associated with the first number. It can serve as a minimum upside objective for now, implying that all trades between here and there be positioned from the long side. We’ll plan on buying weekly puts if and when the target is reached, provided it happens before Wednesday of the given week. Please note as well that a lesser Hidden Pivot at 94.19 (see inset) has the potential to stop the rally cold and can therefore be used for spec camouflage shorts.
All signs point higher at the moment, but even Google will have to top somewhere. My best-bet for a short-able apex is 929.78, the Hidden Pivot target of a well-defined ABCD on the monthly chart (see inset). You can try shorting with camouflage at that number, or at the D target (in purple) of the lesser pattern, but until then all trades should incorporate a bullish bias.
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.