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COMMENTARY for Thursday
TODAY'S ACTION for Thursday
Rick's Picks for Thursday
The futures are bound for at least 1146.50, presumably by New Year’s Eve. Another Hidden Pivot that will be playable when the futures take out yesterday’s high is 1132.50. That will be my minimum upside objective on a breakout, and it is shortable with a stop-loss as tight as 1.00 point. Longs from these levels therefore have a potential 14-point ride, but camouflage will be tough to come by with the bear rally now scraping highs.
Gold was moving effortlessly higher Wednesday night even though the Dollar Index was off just slightly, suggesting there are committed buyers behind the rally. The high so far is 1103.70, the precise target of the pattern show in the chart, but any progress above it would portend a minimum 1107.50/1108.60. To determine whether this surge is more than a one-day wonder, we’ll use 1123.90 as a benchmark. A print today at that price would shorten the odds that an important bottom is in.
Buyers of the January 46 puts could have paid as much as 1.11 or as little as 1.06 — more than I’d anticipated because put volatility surged on yesterday’s gap-up opening. We’ll stick with the 15-cent stop-loss in any event, using the low end of the range. That means you should exit the puts on a sell-stop if they trade for 0.91.
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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.
This Just In... for Thursday
It is absolutely dumbfounding that Harry Reid’s legislative turd is about to become law. For yet more reasons why this is The Worst Bill Ever, click here. A Wall Street op-ed piece dissects some of the bill’s hidden costs, which are all but certain to bankrupt or drive out insurers who serve the market for individuals and small groups. For one, because such companies don’t enjoy the economies of scale of larger insurers, their administrative costs are typically around 30%. And yet, Reid’s big, fat stinker would make them give rebates to customers if administrative costs exceed 10 percent.
If not for after-hours manipulation designed to leverage thin markets, stocks would be flat since September. As Tyler Hurden documents, virtually all of the substantial gains shares have achieved since then have come after the NYSE closing bell. Click here for the full story at ZeroHedge.com.
Hidden Pivot Webinar & Tutorials
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$1059 Is a Number to Watch in Gold
by Rick Ackerman on December 24, 2009 12:01 am GMT · 10 comments
Gold’s slippage in recent weeks has closely mirrored the U.S. dollar’s rise. For bullion bulls, the good news is that the dollar is rallying not for fundamental reasons that might persist indefinitely, but because of short-covering by carry-traders who effectively went short against the dollar. Mostly, they borrowed greenbacks in size in order to plow them into something else offering either higher yields, greater leverage, or both. That’s what happens when the Fed artificially lowers interest rates: financial speculators, including most of the biggest banks, borrow all the dollars they could conceivably wish for, » Read the full article