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COMMENTARY for Friday
TODAY'S ACTION for Friday
Rick's Picks for Friday
Gold peaked $11 shy of an important Hidden Pivot target at 1134.50 yesterday, then got clobbered by the steepest dollar rally in, oh, two weeks. While we are obliged to take the rally seriously, we have an equally serious obligation to make certain that it proves itself each and every step of the way. (See today’s DXY tout for precise benchmarks by which to judge any success thereof.) If you were trading gold futures, including against a long-term position, a trailing stop of about $4.50 should have been considered, since profit potential from the intraday high was about 2.5 times that. Looking immediately ahead, the correction pointed to a tradable low at 1098.10 (stop 1097.60); or if not there, at 1095.90 (stopped according to taste). We should infer that more selling is coming if those Hidden Pivot supports give way within 30 or so minutes of first being touched.
The minor trend — all we’ve got to work with so far — projected to 75.92 at the close, and that would be enough to refresh the bullish impulse on the 30-minute chart. More important to our assessment of the strength behind this push, or lack thereof, is the way in which buyers handle the three peaks labeled in the accompanying chart. An unpaused thrust past any pair of them would reinforce the assumption that the outlook for the intermediate term (i.e., 3-5 weeks) had turned bullish.
At the close, the futures bounced from a low that lay two ticks above a minor Hidden Pivot support at 1082.00. Anything beneath that would portend 1079.00, which can be bottom-fished with a 1079.25 bid and a 1.00-point stop-loss. The trade will remain valid as long as 1091.00, the point ‘C’ of the pattern, has not been exceeded to the upside. Looking at a somewhat bigger picture, the hourly chart would become worrisome (or perhaps encouraging if you are of the bearish persuasion) if the futures dip below 1074.00.
The stock has pulled back without having achieved the 15.85 rally target where we’d planned to lighten up. We still hold eight Dec 12.5-15.0 call spreads for an average CREDIT of 0.15., and I’ll suggest sitting with it for now. My expectation is to let the spread expire into stock, giving us an 800-share position with a cost basis of 12.35. One reason we shouldn’t be too eager to cover the short Dec 15 at the moment is that they are trading with an implied volatility of close to 60 — quite juicy. If we weren’t short them already, we’d be looking for a way to do so.
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Take any dozen good reasons for being bearish right now and they still don’t equal the bullishness of the chart shown. The undeniably compelling rally objective is 13085, a 4.8% move from current levels, and one can only surmise that the dusting the 12158 midpoint received on the last pullback (12/28) all but clinched a finishing stroke to the higher number. Moreover, it implies that bears shouldn’t get their hopes too high even if, in the next few days, the Dow plummets 324 points to retest the midpoint support. As of now, that would signal not weakness, but a screaming opportunity to get long. Hard to believe, really, but that’s what the charts say.
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The Illustrious History of Friday the 13th
by Rick Ackerman on November 13, 2009 12:01 am GMT · 13 comments
We owe a debt of thanks today to our learned money-manager friend from Lake Tahoe, Rich Cash, for his labyrinthine treatise on the origins of Friday the 13th. Here’s Rich, and we would encourage you to follow the links he has provided wherever they lead (including this one, to subscribe to his excellent service):
I had a financial friend who was a triskaidekaphobe. He did not like the Friday the 13th film franchise genre, with 12 films now. (Will the 13th release be unlucky?) On Fridays the 13th, my friend ran and hid, fearing the end of his luck, if not his portfolio. If a month begins on Sunday, then there is a Friday the 13th. There may be from one to three Friday the 13ths a year. However, this is the last one until 2015. Will this one be unlucky for the » Read the full article