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COMMENTARY for Tuesday
TODAY'S ACTION for Tuesday
Rick's Picks for Tuesday
The 1134 target is important enough that we should begin to monitor the futures closely for trouble even now. Another reason for caution can be seen in the monthly chart reproduced alongside. It yields an 1106.80 target, and although this number comes from composite highs and lows on a continuous monthly chart, a single-month chart would not yield significantly different results (i.e., the point ‘C’ low for December Gold was $699; on the continuous monthly chart, it is 690.80). Most immediately, we can use a corrective pattern on the 30-minute chart to warn of even minor weakness. Points A & B have already been established, respectively, at 1108.60 and 1100.70 (both from yesterday), but a tentative point ‘C’ at 1104.70 may not hold. In any event, this is the pattern you should use to determine a midpoint that evinces visible support for the corrective pattern. If this pattern were to overshoot its ‘D’ target, that would raise a yellow flag. _______ UPDATE (4:43 a.m.): We tracked the futures in the chat room as they headed lower overnight. They eventually bottomed within two ticks of a 1097.00 target (15-min, A=1109.90, B=1100.70) and appear to be returning to health as of 4:42 a.m. I’ll feel more confident if and when the rally exceeds a look-to-the-left peak at 1106.40 made on the way down yesterday.
We hold eight Dec 12.5-15 call spreads for an average CREDIT of 0.15, having legged the position on at great prices. Since SLW is approaching a potentially stubborn Hidden Pivot resistance at 15.85, let’s ty to adjust if and when the stock gets there. Accordingly, I’ll recommend closing four of the spreads for 1.90, good through Wednesday. I’ve included a snapshot of my option calculator that shows how I arrived at a fair value for the spread.
We can use a Hidden Pivot at 74.36 as a minimum downside target over the near term. This would allow for an upward retracement to its sibling midpoint, 75.59 (now resistance) with little damage to the intermediate-term bearish case. However, it would take a rally to just 75.19 to hint of a bullish reversal on the 2-minute chart. I have reproduced this chart so that you can see how very subtle this telltale is.
Even with a vicious short-squeeze to start the day, Goldman was unable to make it to a ‘D’ target that lies below a key peak at 178.58. The target itself is 177.06, a Hidden Pivot, and I’ll be interested to see whether this erstwhile world-beater is able to reach it today. That would confirm the status quo (i.e., a go-along uptrend), but the stock will need to blow past the pivot to suggest that it’s capable of regaining its status as a market leader.
A gnarly pattern on the 15-minute chart implies more upside to at least 10273.91, or possibly to 10367 if any higher. If the second number is reached, I’d suggest shorting the Diamonds (or any other vehicle of your choosing) aggressively on your own initiative.
No tradable patterns leap out at me for today, although the daily chart can be imagined to yield a potentially important rally top at 45.90 later this week or next. Hidden Pivot targets aside, the Cubes will fly or die based on how well they handle three peaks recorded earlier this month near 43.80. If they get through them today, though, bears better not try to impede anywhere south of 45.
Bears should prepare for more adversity to at least 1113.00. That’s a Hidden Pivot target lifted from the 30-minute chart (A=1012 on October 2), and it looks quite compelling to me. The logic and viability of this target was further enhanced by the pronounced stall on Friday precisely at the pattern’s 1069.50 midpoint.
Silver is struggling hard to reach a modest target at 18.375, and it was hard not to notice that yesterday’s thrust failed to get past a look-to-the-left peak at 17.800 recorded on October 26. This would seem to suggest the futures may need another 4-7 days of consolidation before they try and push past a supply zone formed in mid-October that ranges up to the 18.175 peak recorded on October 14.
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December Gold Looks Set for Another Leap
by Rick Ackerman on November 10, 2009 1:09 am GMT · 5 comments
December Gold’s overnight surge yesterday brought it to within two ticks of an 1111.90 target we’d been using to keep us properly bullish for the last $55 or so of the rally. Where to next? We’ll give you our best guess in a moment, but let us caution that we treat every top on the hourly chart as potentially important, since one can never can tell whether the correction that ensues will be the one that leaves bulls distraught, confused and gasping for breath. Actually, you often can tell, if you are patient enough to monitor price action on the lesser charts diligently. The logic of this is straightforward, since it is impossible for the major trend to change without signaling it first on the lesser » Read the full article