With a glower of contempt toward the bankers, gold remains easily aloft above $1000, developing thrust for the next big move. We wrote here a while back that blast-off from $1000 would follow the realization that G-20 can do nothing to restore stability to the world’s tottering financial system. Now, the question is whether anything at all will be “realized” in the wake of the Pittsburgh meeting. We hesitate to call it a summit because the event seems to have slipped off the news media’s radar. Unable to recall the actual » Read the full article
The futures dove hard yesterday afternoon after rallying moderately. The Wall Street Journal was hard-pressed to explain it, but we know better, since a purely technical target at 1074.50 that was proffered here very nearly marked the top. The decline may have jolted some traders, but in Hidden Pivot terms it achieved nothing of interest on the hourly chart. A print down at 1047.50 was needed to turn the hourly chart bearish, but panicky sellers could muster only 1055.25. As of early Wednesday evening, there were no compelling spots to try bottom-fishing. A midpoint support at 1055.75 was too close to the intraday low, although its ‘d’ sibling at 1051.25 might be serviceable if you’re bored enough to force the trade.
Bid 2.05 for two November 95 puts (DAVWQ), day order. That’s about what they should sell for if the Diamonds trade as high as yesterday’s opening price, 98.36. Stocks seemed too spooked at the close to suggest that that much of a recovery is likely, but DaBoyz will be doing their best to unload at at least somewhat higher levels, since they too were caught by surprise.
I want to reiterate the 192.91 target, which looks as promising as ever (see chart), notwithstanding the fright-wig plunge into the close. We took a close look during yesterday’s tutorial session and saw a ripening short, presumably using out-of-the-money puts in the October series.
Based on my chat room post late in Thursday’s session, subscribers were able to stake out some small ‘Jackpot Bets,’ buying expiring calls at the 112 and 113 strikes for as little, respectively, as 0.21 and 0.15. The latter options traded for as little as 0.10 yesterday before rocketing to 1.00 when Bahh-Bahh found traction after the opening and soared $5 in the space of an hour. It can, and often does, perform similar feats on a given day, and that’s why I would rather be long a few out-of-the-money calls for cheap on expiration day than short them. The goal of these jackpot bets, which we ordinarily initiate on Friday mornings in the first hour, is to cash out half of the options in the early going for twice what we’ve paid for them, assuming the opportunity arises. If successful, that leaves us with a risk-free chance to make perhaps 5 to 10 times our money. In practice, subscribers have done this or even better numerous times, and even when things did not go our way they were able to do no worse than break even.
I’ve included a chart that suggests that, from a purely visual standpoint, a run-up to as high as 114.80 on Friday is hardly unlikely. We don’t need that to happen to make a nice score, however, since even if BABA rallies just $1.50 or so in the early going, there will likely be an opportunity to ‘double out’ on half of our positions. If the stock opens lower on Friday there could still be a chance to get a jackpot bet down. However, I’d suggest doing so with options of a lower strike purchased for perhaps 0.20 or less. Don’t bet more than you are comfortable losing, since this gambit is highly speculative. My guideline is to invest no more than you would on some 20-to-1 horse that you happened to like. _______ UPDATE (November 21, 4:00 p.m.): Subscribers reported gains of 300% to 800% on the trade suggested above. Quick, substantial gains were painlessly achieved after BABA spiked on Friday’s opening bar to 113.25 — 3.63 above the previous day’s close. The leap caused expiring 113 calls that subscribers had bought for as little as 0.15 less than a day earlier to trade for 0.90 in the early going — a sixfold increase. At the same time, calls at the 112 strike that subscribers reported buying for as little as 0.21 soared to 1.60.
GDXJ’s ups and downs are in ‘dueling’ mode at the moment, alternating between bullish and bearish feints. It was mildly bullish when the stock slightly exceeded the 129.30 target shown on Tuesday. However, yesterday’s slide also exceeded a Hidden Pivot target — in this case a hidden support at 27.21. Taken together, the action suggests that this vehicle will spend the next few days marking time in the range 28-29. The picture would brighten on a thrust exceeding 29.20 on Thursday, since that would imply more upside to at least 31.24. Alternatively, a continuation of the downtrend past 25.67 would have equally bearish implications.
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.