Trading Newsletter for Gold, Silver, Stocks and Mini Indexes
From the monthly archives:
The Dollar Index is giving off mixed signals, consolidating just below a midpoint pivot after creating a strongly bullish impulse leg yesterday on the hourly chart. If the retracement goes lower than the ‘d’ target at 76.33, the whole bullish enterprise would become suspect, notwithstanding the dog-and-pony show slated in Pittsburgh this week.
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The futures failed to reach a targeted pullback low at 993.00 yesterday, suggesting that the bounce off the actual low at 996.30 is likely to reach its ‘D’ target, 1012.10. The futures appeared to be corroborating this scenario Monday night by pushing above the uptrend’s midpoint pivot. _______ UPDATE (10:20 a.m.): The futures blew past 1012.10 on the first hourly bar where they encountered the resistance, implying more upside over the near term to at least the next Hidden Pivot target, 1029.10. Its sibling midpoint at 1012.70 is a logical place for a consolidation to bottom, so buyers should take note if a pullback comes down that far.
The futures have the potential to hit 122^08 on the next thrust – a target that has been corroborated by the stall within two ticks of its sibling midpoint 120^11. The best way to board would be to use a camouflage ‘B’ that is recorded somewhere between 120^14 and 102^16. The opportunity will be potentially available as long as the ‘C’ low at 118^13 is not violated. Since it could come and go quickly, you’ll need to be ready, so I’d suggest setting a chart alert at 120^15.
Putting aside the two targets in the stratosphere that I flagged here yesterday, there’s a minor corrective one at 1052.25 that you could use for bottom-fishing with a stop-loss as tight as two ticks. Please note that it would take a print today at 1047.50 to turn the hourly chat bearish. ______ UPDATE(1061.25): The stop-loss would need to have been at least four ticks, since the actual low occurred at 1051.50. The subsequent bounce points to 1068.25, subject to midpoint resistance at 1063.00, but neither number looks like it will be worth much for trading purposes. _______ FURTHER UPDATE (10:16 a.m.): The futures have topped so far this morning at 1069.00, suggesting the 1068.25 pivot flagged above was not so useless as I had imagined.
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.
[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
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.
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.
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.
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Tepid Media Make Gold an Enticing Buy
by Rick Ackerman on September 22, 2009 2:13 am GMT · 8 comments
[Rick has been under the weather with a possible case of food poisoning. Filling in for him today is Chuck Cohen, a financial consultant whose work will be familiar to many of you. The following appeared at LeMetropole.com over the weekend. Chuck thinks that as long as the news media continue to stumble around in the dark in their coverage of the gold world, we should remain confident about accumulating more bullion and precious metal shares for the long haul. RA]
It took a mix of $1000 gold, the media’s reaction to it, and a very fallow day to compose this piece. As serious as the news is these days, it is still difficult not to see the absurdity in what is unfolding. Now that gold has finally pierced $1000, I had expected to find repentance and mea culpas by a news media that has persistently resisted and even mocked the gold bugs for nearly a decade. But if the news over the weekend is an indication, gold might » Read the full article