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.
Member-only content. Please Login or get a free trial of Rick's Picks to view.
Member-only content. Please Login or get a free trial of Rick's Picks to view.
Member-only content. Please Login or get a free trial of Rick's Picks to view.
Much as we’ve come to view the stock market as a one-way bet these days, so have we come to accept that Google will eventually sell for $1000 a share. Or will it? I’d need odds to bet the “Don’t Pass” line on this one, but it is at least curious that the stock’s most recent rally failed by a hair to surpass a small but technically significant ‘external’ peak at 892.14 that I’ve labeled in the chart. As we know, rallies that are destined for bigger things don’t usually hesitate at such trivial obstacles, but in this case Google did.
If you look closely at similar rallies in the chart, you’ll see that in each instance where there was a small peak that required just a smidgen more effort to exceed, the stock did not fail. GOOG could still surpass 892.14 on the next thrust, but as we know, it’s the first attempt that defines whether buyers have the moxie to keep on going. I raise this point speculatively, of course, and Google will still be on a nice ‘camo’ buy signal if it gets past 892.14 and pulls back from just above it. But we should nonetheless note the small failure that has already occurred as a very subtle warning sign of possible trouble ahead.
In the chat room on Friday, I’d informally suggested shorting into whatever rally ended the week. However, with the Dow off 106 points at the close, this tactic would have been flouting DaScumballs’ tendency to reverse Friday’s polarity on Sunday nights This they appear to be doing — on gaseous volume, as is nearly always the case — but we’ll have to wait until Monday morning before we can fade them using puts or calls. Any such opportunity will be unpredictable via a tout disseminated Sunday night, but when the markets open Monday morning, I’d suggest looking to get short at D targets of minor, uptrending abc patterns. Night owls looking for additional options should check out my tout for the E-Mini S&Ps, since it takes into account the six-point rally that has already occurred. The chart shows that bears will be shooting for a move down to at least 146.21 once the midpoint support at 149.55 is busted. _______ UPDATE (June 18, 2:25 a.m. EDT): Three large, gratuitous swings yesterday left DIA the equivalent of 109 Dow points higher. Although the rally top evinced the same chicken-heartedness that I’ve described in today’s GOOG tout, we’ll defer to insanity and not try to intercept this vehicle aggressively. ‘Camo’ shorts are okay at the ‘D’ targets of minor rallies, but it will be catch-as-catch-can. Please feel free to query me about any possible opportunities you may have spotted if I’m in the chat room.
The vertical bull spreads that subscribers hold in this stock are virtually riskless, since they were legged on for a net CREDIT of 0.01. This means that if Goldman shares were to fall to zero we would have no loss, even after commissions. Specifically, we hold the July 195-200 call spread 32 times — a position that could produce a gain for us of $16,000 if Goldman is trading above $200 when the options expire on July 19.
What are the chances that this gambit will pay off at maximum odds? The chart shows that Goldman would need to put on a powerful burst of speed to deliver on its potential. A move to at least 180.67 looks like an odds-on bet a this point, and if the stock were to get there before July we’d be tempted to tell you to cash out of the position for a profit of perhaps $3000-$4000. That’s because GS would probably have to noodle around for a week or two to develop enough thrust for the additional $20 run-up it would take to push our spread in-the-money. For now, let’s cross our fingers and hope that we are challenged with such a decision. Think you can’t do this stuff? Click here and let us show you how.
Member-only content. Please Login or get a free trial of Rick's Picks to view.
We’ve been focused on a long-term bear-market target at 135^05, looking for any hint that the Fed is about to step in to reverse the steady price erosion in this vehicle before investors hit the panic button. A lesser but still significant target at 137^07 may provide clues concerning the near- to intermediate-term, however, as well as a place to attempt bottom-fishing.
This target is quite clear and has already been confirmed by precise price action at the ‘p’ midpoint, so you could conceivably step in with a bid at 135^06 and a stop-loss as tight as three ticks. However, and as always, camouflage will be the preferred entry tactic. Regardless of whether you trade the target, you should expect it to work precisely as a minimum downside objective.
There were subtly encouraging signs in yesterday’s price action as well as some good handholds for getting long via camouflage. Notice that the intraday high exceeded May 9’s peak by a single penny. That’s not much, but it was sufficient to refresh the bullish energy of the intraday charts as all robust rallies should, while also generating a buy signal (already tripped) at 12.53. The pattern points to D=12.82, and if the rally gets past that number with ease, we should infer that it is destined for even bigger things. Camo traders able to get aboard should let me know in the chat room so that I can establish a tracking position for your further guidance. _______ UPDATE (June 5): A day’s hesitation has not diminished the bullish look of the intraday charts, and a tradable rally pattern will remain intact as long as 11.75 is not exceeded to the downside (see inset, a fresh chart). _______ UPDATE (June 11, 3:03 a.m. EDT): A few more days’ hesitation sent GDXJ into a relapse that breached the prior low at 11.75. This created a bearish impulse leg, although bulls should still be presumed to hold an edge in this ‘duel’ (see inset, a new chart). That will remain the case until such time as 11.09 is exceeded to the downside.
Member-only content. Please Login or get a free trial of Rick's Picks to view.
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.
Hidden Pivot Webinar & Tutorials
The Hidden Pivot Webinar is two-day event is designed to teach you the risk-averse trading strategies Rick has taken to his seminars around the world. Once you have learned his proprietary secrets, you will approach trading and investing with enough confidence to make your own decisions without having to rely on the advice of others. For more information, or to register, click here.
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