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COMMENTARY for Monday
TODAY'S ACTION for Monday
Rick's Picks for Monday
A message that I left in the chat room bears repeating, since it was meant to allay anxieties concerning this so far garden-variety correction. I am trying to forecast bullion prices with coldly mechanical detachment. A potential benefit to subscribers is that they will not have to awaken each day with their nervous systems hard-wired to Comex Gold’s 15-minute chart. As I tried to make clear the other day, there is no way gold can change directions on the hourly chart, embarking on a major rally, without telling every chartist on the planet that it is doing just that. In the meantime, I would encourage all who follow my touts not to sweat the details. However, if I have failed to discourage some of you from overtrading a vehicle in which you have an emotional stake (i.e., a “jones”), then by all means, buy gold speculatively and repeatedly at Hidden Pivots as you please, since it won’t cost you much if you’re wrong — and because one right guess can make up for a multitude of wrong ones.
Concerning actual targets, a disinterested reading of the hourly chart suggest that the futures are likely to fall to at least 1046.80 before they can turn around. However, a rally first that exceeds 1114.50 would negate the target, and a print today or tomorrow exceeding 1122.50 would likely be enough to send shorts diving for cover. Camouflage entry is suggest along the route of such a rally, but if the futures fall, the first place where they could be bottom-fished with a tight stop-loss would be at 1080.60, the C-D midpoint of the pattern shown in the chart.
My worst-case target for the next 7-10 days is 16.325, the Hidden Pivot ‘D’ of the pattern shown in the chart. It is corroborated by the 16.330 target of a lesser pattern, also shown. These two numbers can be expected to exert magnetic force on the futures in the days ahead, bringing them down to a high-odds spot for bottom-fishing. It should be considered a minimum downside objective for the time being, subject to change if the point ‘C’ of either pattern is exceeded to the upside.
Short-squeeze forces appeared to dominate Sunday night, pushing the Dollar Index to within a couple of ticks of a two-week rally pattern’s Hidden Pivot midpoint. The chart shows how a 79.18 target that lies 1.4% above current levels would be in play if the 78.26 midpoint is breached.
The short squeeze that propelled Goldman shares on the last two trading days of the year has the potential to mutate into something scary if a further $5 push over the next day or two materializes. That would create an impulse leg on the daily chart that will have surpassed four previous peaks, three of them “externals”.
With two January 230 calls acquired for 1.00 apiece, we’re not exactly loaded for bear, but we at least have a horse to root for as stocks begin the new year. Apple was somewhat resilient to downside pressure on the broad averages last week, so it is likely to move ahead of the pack if stocks resume the long, lemming-like march toward the sea that they began nine months ago.
The 398.97 target of the pattern shown looks moderately compelling, but it would become even moreso if the now month-long descent takes a bounce from very near 420.67, the Hidden Pivot midpoint. The symmetry of this pattern implies a precipitous move down by Tuesday or Wednesday, and that would all but clinch an eventual move down to 398.97. That target is about 7.25 percent below these levels.
The gratuitous, unmitigated nuttiness of the final 30 minutes of the New Year’s Eve session is being somewhat recanted Sunday night via a timid, five-point rally to entice shorts. Night owls can test the water bottom-fishing at 1112.50, stop 1111.75, but if the stop is hit we could see a subsequent fall to at least 1101.25. On the 5-minute chart. Hidden Pivot aficionados will find the possibility of a camouflaged “buy” on a pullback from a tick or two above 1120.50.
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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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Big, Brazen Lies Sustain Economy
by Rick Ackerman on January 4, 2010 5:11 am GMT · 14 comments
With the help of a credulous news media, Obama, Bernanke, Geithner et al. have continued to sledgehammer the “green shoots” story. Actually, it is no longer timid green shoots that supposedly are sprouting up, but a recovery so strongly rooted and powerful that it has sent stocks soaring since March and, more recently, goosed T-bond yields skyward. Have mere words caused this, jolting the economy from its worst slump since the Great Depression? We very strongly doubt it, much as we doubt that a rising stock market has anything whatsoever to do with the nation’s economic health. If you doubt this, take a » Read the full article