Da Sleazeballs manipulated all of yesterday’s gains in the space of 15 minutes on Sunday night. This means that almost no one got on board and that bears had to spend all of Monday playing a tedious game of cat-and-mouse to get at least some of their shorts back. What surprises is that Da Dirtballs were unable to achieve any follow-through with more short-squeezing intraday. On balance, shorts appear to be in just enough trouble to provide buoyancy even with relatively little help from merely bullish buyers. If so, look for the next squeeze to push the futures up to 1117.25, a Hidden Pivot that can be shorted with a stop-loss as tight as 1.00 point. The 1110.75 HP midpoint has been exceeded tonight by a single tick — not enough for us to consider it busted, but close enough to affirm the correctness of our target.
From the monthly archives:
December 2009
Someone in the chat room said the bullish tripwire I’ve set at 1154.60 is a bit ambitious, and I agree. But nothing less than that will do if we are to be “sure” that the correction is over. Even so, opportunities to get long speculatively with almost no risk abound, and I’ve have sketched just such a one in the accompanying chart. Remember, an impulse leg need only exceed one internal and one external peak to qualify as such, and the subtler the better. “Subtle” is what you will see in this chart, and it is patterns like this one that will allow you to test the water a half-dozen times a day, initiating speculative long positions that are likely to make you a small profit even if you’re wrong and the futures fail to get airborne. There are a dozen people in the chat room intraday who know how to use patterns like the one shown, so don’t hesitate to ask if you’re not sure.
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Silver Wheaton’s nasty fall from a recent high at 17.45 hasn’t much affected the profitability of the option position we established a while back. We have since modified it so that we hold eight December 12.50 calls with an effective cost basis of 0.40 and are short eight January 17 calls for 0.80. Our intention is to exercise the calls and come out of this Friday’s expiration with 800 shares of stock as a long-term position. No further action is suggested at the moment.
These are interesting times, for sure — nowhere moreso, unfortunately, than on Capitol Hill. A trillion dollar health bill appears destined to be excreted by Congress before New Years, despite the fact that 57% of Americans (and growing) staunchly oppose it. As recently as last week, it looked as though Joe Lieberman, the Senate’s lone independent, would put the kibosh on this whopping legislative turd when he issued an “over-my-dead-body” statement in opposition to the plan’s “public option.” Lo, there was Lieberman on the Senate floor Saturday afternoon, providing the 60th vote the Democrats needed to overcome a Republican filibuster. Because Lieberman does not drive on the Sabbath, he’d » Read the full article
The rally pattern shown in the accompanying chart looks promising for a short at 105.86. The C-D leg has been a tedious grind relative to the quick ABC, but it doesn’t alter the logic or the odds of the 105.86 target eventually being reached. Officially we’ll buy two January 106 puts (DIAMB), stop 106.01.
Friday’s rally showed a faint yellow streak when it failed to take on a key high at 76.82 recorded on November 3. That wouldn’t be much of a feat if it happens today, as I expect it will, but the fact that the rally didn’t achieve the benchmark on the first attempt argues against the likelihood that we are witnessing the beginning of a bull market in the dollar.
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We’re using a Hidden Pivot at 1090.20 as our minimum retracement target for the near term, although a close look at the hourly chart reveals another at 1094.30 from which the futures could conceivably turn higher. Either way, the February contract is likely to correct a further 1.8% or so before it would becoming an enticing buy. Alternatively, buyers would need to push the futures up to 1154.60 today to stampede bears and end this so-far 9.5% correction. _______ UPDATE: If Gold has bottomed and will not require a pullback to 1090, we needn’t wait for an 1154.60 print to turn bullish. Stay tuned to the chat room for camouflage entry opportunities.
Some Key Numbers to Watch in Gold
by Rick Ackerman on December 15, 2009 3:47 am GMT · 4 comments
This has been a great year for gold, but investors can’t seem to shake the jitters they acquired in 2008, when prices plunged 35% between March and October after poking briefly above $1000 for the first time. Is last week’s 10% selloff the beginning of another murderous correction? We don’t think so, although it could take a few more weeks for prices to consolidate for the next strong push. But more immediately, we expect the Comex February contract to ease to a minimum $1090 in the days ahead. That would represent a » Read the full article