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COMMENTARY for Friday
TODAY'S ACTION for Friday
Rick's Picks for Friday
Trust my bullish hubris, but verify. Putting aside the plunge to 983 that today’s commentary says would be cause for worry, we should be on the alert for a breakdown from the first bearish impulse leg on the hourly chart. It has already occurred, creating a whacky-looking pattern that points to 1039.80. That’s my minimum downside target for this correction, since its midpoint sibling at 1050.30 has already been exceeded. Alternatively, the most bullish thing that could happen today would be for the futures to thrust above 1068.40 without having gotten near 1039.80. Whatever happens, I’ll be keeping a very close eye on the smaller patterns so that we don’t become complacent. _______ UPDATE (11:21 a.m.): Gold is rallying sharply, notwithstanding today’s moderate strength in the Dollar Index (DXY). The surge will invalidate the 1039.80 target if it exceeds 1060.80, and it will start to kick bear butt at 1061.80.
The Hidden Pivot support at 118^22 where I’d recommended bottom-fishing worked precisely, catapaulting bonds to a 1^02-point rally from a low of 118^20. Since a three-tick stop-loss was suggested, risk:reward was highly favorable for an exit or partial-profit taking above 118^31. The bonds came back down after this gratuitous spike, but they had not taken out the 118^20 low as of late Thursday night.
The rally spike in the final seconds of yesterday’s session pushed the Diamonds to a high that lay just 0.02 points above the 100.65 target flagged here earlier in the week. Although I typically don’t advise taking positions that late in the day, I’ll establish a tracking position for the guidance of anyone who took the short: 200 shares from 100.65. For now, tie them to a stop-loss at 100.71, but bid 100.31 or better at the same time (i.e., o-c-o) to cover half of the position. Those who earlier played the rally from 98.77 in the way I’d suggested, buying Dec 101-Nov 101 call spreads for 0.65, can take profits at will, since the spread is an easy sale in the mid- to high 0.70s. _______ UPDATE (9:58 a.m.): The Demons opened on a nasty gap down, allowing us to cover half the position at 99.74. That gives us an effective cost basis of 101.68 for the round-lot short remaining. Tie it to a 100.32 stop-loss for now. Today’s weakness projects to 99.42, a Hidden Pivot midpoint whose breach would spell more trouble down to as low as 98.88. Those numbers will remain valid as long as the point ‘C’ of the pattern, 99.97, remains intact.
We hold 12 December 6 calls for 0.15, having gotten sandbagged when we bought into a mini-cascade of selling on the opening bell. Our goal is to short a dozen December 7 calls against them for 0.06 or better, but let’s be crazy-greedy for now and offer them for 0.10, good-till-canceled. If you think Goldman Sachs eventually will move higher, there is little reason to worry about this inexpensively bullish position. ______ UPDATE: Having achieved a perverse sort of perfection in the timing of our purchase of some call options, it’s now time to write them off. We’ll book a $180 trading loss and hold them as a lottery ticket on — let’s see if I can choke this phrase out without getting nauseous — a possible “Santa rally” into year’s end.
With December Crude trading for around 72 as the week began, I’d said the futures would be bound for $80 a barrel if they got past 74.81. To get down to specifics, there are two Hidden Pivot targets you can use for the near term: 80.21, as a minimum upside projection; and, if it is exceeded on a closing basis, 83.79. With pump prices relatively stable these days, crude has been out of the spotlight. Once it hits $80, though, you can be sure it will be back in the headlines. _______ UPDATE (8:45 a.m.): December Crude has topped this morning within 19 cents of the 80.21 target. If you shorted the top on your own initiative, I suggest covering half the position at these levels and using an 80.06 stop-loss. If and when the pullback hits 78.97, you should switch to a 0.60-cent trailing stop, using 77.20 as an objective.
Google is closing fast on a 553.87 target first broached here in July when the stock was trading 25 percent lower at 442. There are other compelling targets near there as well, but we’ll need to settle on one, as we have, in order to play. Getting short painlessly with put options is going to require some finesse, so my plan calls for initiating the trade via an intraday signal in the chat room. (The alert will be posted as an update to the tout as well, in real time.) If you want to try this one yourself, I’d suggest using an initial stop-loss of at least 30 cents, but no more than 40 cents. _____ UPDATE (12:33 a.m.): The target briefly and very precisely contained Google’s $25 rampage, but the stock got second-wind and 30 minutes later stopped us out of a Dec 500 put purchased for 5.90 for a loss of $10 (or perhaps $19 if you used a market stop). The high so far today has been 554.75. If it proves to be the top, or at least “a” top, we’ll factor that into our next targeted trade in the stock. The recommendation was predicated on accuracy to within 30 cents, but the pattern we used to target Google had taken six weeks to play out, so perhaps I should have allowed a bit more leeway.
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Gold’s Pullback a Gift to Bulls
by Rick Ackerman on October 16, 2009 2:24 am GMT · 14 comments
December Gold has sold off mildly so far after peaking within inches of a 1074.50 rally target drum-rolled here a while ago. We see little reason for concern, since the futures would need to fall all the way to 983.10 to create room on the daily chart for doubts. Actually, we’d view any pullback into the range 1057 (already achieved) – 1019 as a terrific buying opportunity, since it would take only a $20 booster rally thereafter to set gold in motion toward the next key threshold, 1134. The dollar’s bearish chart would seem to corroborate a bullish outlook for gold. Although mysterious forces caused the Dollar » Read the full article