The futures have spent two days in what looks to be a tortuous consolidation, but they don’t look ready yet for another surge higher. If and when they resume their suicidal climb, there are no targets above that look like bet-the-farm shorts. However, the two that I find most compelling, both from the weekly chart, are 1140.00 and 1159.50. Pivoteers will notice that that the summer selloff was not sufficient to give us a legitimate B-C pullback, since it did not equal the required 0.618 of k-A.
COMMENTARY for Monday
Rick's Picks for Monday
I posted some targets for this vehicle in the chat room the other day but missed one that could have immediate relevance: 48.53. Notice in the weekly chart how last week’s high fell just 13 cents shy of the target. That’s close enough, and the target has been long enough in coming, that we should be prepared for a significant pullback — one lasting perhaps 2 to 3 weeks. If the pullback turns out to be small stuff, however, and GDX pushes above 48.53, we would infer it’s headed for at least 52.14, the ‘D’ target that results when you slide down to the one-off low at 17.59 recorded last November.
Just a few more baby steps and the futures will succeed at something that has haunted the long-term picture since February. At that time, a sharp, four-month rally narrowly failed to get past a key peak at 1028.00 recorded seven months earlier. If the current thrust tops 1028.00, it will create a quite powerful bullish impulse leg on the weekly chart. And incidentally, if the rally fails to get past gold’s all-time recovery high at 1060.00 (basis the Comex December contract), it could conceivably create a camouflaged entry opportunity on the weekly chart. That would be rare indeed.
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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 Monday
There are no clear targets for the correction begun from 17.690 on Thursday, so a Hidden Pivot support at 16.810 will have to suffice. A bullish reversal on the hourly chart would be signaled at 17.405.
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Two Exploration Stocks to Consider
by Rick Ackerman on September 21, 2009 12:01 am GMT · 8 comments
[We often feature the work of our friend and colleague Chuck Cohen, a NYC-based investment consultant who specializes in mining companies. Below, he explains why it is time for those who have been straddling the fence to buy junior gold shares. He concludes with two specific recommendations that trade over-the-counter for less than $1.]
Rick has asked me to write about gold with a focus on the junior mining companies, so here we go, along with a couple of specific recommendations. I tried to point out the pros and cons of buying the juniors last month, but let me now make a quick refresher. I also suggest that you go back to Rick’s August archives to review my articles on gold and the junior sector.
Advantages of juniors…
– They have been beaten down in price due to the credit squeeze last year. » Read the full article