From our far-flung correspondent and paid-up subscriber Jonathan Auerbach, of Auerbach Grayson, a suprisingly upbeat dispatch from, of all places, Nigeria:
Former Reagan Secretary of State Alexander Haig (who died 4 days ago) first uttered these prematurely fateful words after Reagan was shot in 1981, Yesterday in a reprise the Nigerian Senate took a similar step by amending their Constitution and requiring that the president among other elected officials could essentially only stay in bed for 14 days before the legislature could name a deputy to act for them. Ok, President Yar’Adua better take a stroll soon. The point…for all the dire speculation on a paralytic government, procedurally things are working well in Nigeria. The market has been mixed in reasonable volume lately and we continue to be long term very positive. The index is 33% of its all time high with a sub 10x PE and the banks at book and around 6x PE should be accumulated. We visit the Axis of Evil…remember that Bushism?
My partner David Grayson is in Damascus this morning meeting local brokers, the Ministry of Finance, CB etc as we prepare for an expected change in Syria’s report card. Reminds me of my days in the Ward School outside Boston when Mrs Wilson told my parents that I was finally behaving myself. We expect our President will soon welcome Syria back into the classroom and their newly reestablished stock market will be open. As with Iraq, we expect and will facilitate the participation for Frontier players. We understand that FOX Business News will cover parts of David’s visit and if you want to see us in action I believe you should tune in at 1300 EST on Monday.
Are there any hints that a weak dollar will help bullion make the turn higher? So far, there’s not much to go on. Last Friday’s run-up missed an 81.63 rally target by 0.29 points, and DXY has been in purgatory since. The midpoint associated with the target lies at 80.60, and a close beneath that number today would be telegraphing weakness next week. Please note, however, that a second midpoint resistance at 80.98 has already been busted, tipping the short-term bias moderately bullish.
Silver was chomping on the bit Thursday night, just a couple of ticks shy of eating through the resistance of a look-to-the-left peak recorded Tuesday on the way down. Whatever further gains it achieves will be part of the impulse leg begun from the day’s lows, since the pullback from the high did not quite qualify as a correction. My minimum upside objective is currently 16.310, a midpoint resistance, but if it’s exceeded on a closing basis the new target would be 16.985.
Today’s commentary speculates that the correction from the December 3 high is over. However, we’ll let the evidence speak for itself over the next day or two, since April Gold will need to keep banging out new impulse legs on the hourly chart to prove its mettle. The good news is that there are five closely spaced peaks from the last four days that remain to be dispatched, like ducks in a shooting gallery. Check for a progress report intraday, since I’ll be updating this tout on-the-fly. _______ UDPATE (11:44 a.m. EST): The futures are acting poorly today relative to a current 1124.50 target. They should get there eventually, since the 1113.90 midpoint posed no problem. But on the hourly chart, the rally is not getting past any prior peaks on the first thrust, and this suggests timidity if not weakness. However, bulls will have a chance to make up for lost time by spearing two peaks just above, at 1121.70 and 1125.80, in an unpaused thrust.
Bears didn’t stand a chance yesterday after DaBoyz finished smoking out sellers on relatively light volume before the opening bell. The sellers pounded on first-hour lows till around mid-morning, but it was with light ammo that was incapable of inflicting much damage. Exhausted and out of bullets, bears turned tale and ran as DaBoyz applied the obligatory short-squeeze. Thereafter, stocks recouped half the day’s considerable losses in the space of 15 minutes, then mopped up with a finishing stoke that left the futures more or less unchanged on the day. With zero real bulls to buy this market higher, and bears presumably spent for the moment, we might expect stocks to chop aimlessly sideways as the week draws to a close. However, structural resistance above the week’s highs around 1112 looks practically non-existent, so don’t be surprised if there’s an attempt to run ‘em.
Here is a site that I’m sure you will find fascinating. It is the British-Pathe web site, where you can see an amazing collection of news reels from way back, when there was no TV, just radio and paper. To see what was going on in the world on screen, you had to go to watch a movie in a theater, and these “news” were shown before the main feature. Remember these days?
Well, now it’s all at your finger tips, and since you probably don’t remember much of it, here is an unending source of entertainment to catch up and feed your inner history buff. Click here to access this remarkable archive.
In the good old days, the price of gold could always be counted on to reflect the ebb and flow of geopolitical tensions. Nowadays, though, you wonder whether it would take a mushroom cloud over the Middle East, or the sinking of a tanker in the Strait of Hormuz, to get a rise out of bullion. This is the topic of my latest interview with Al Korelin at the Korelin report. Click here to access it.
Subtle Signs Gold’s Correction Is Over
by Rick Ackerman on February 26, 2010 2:46 am GMT · 3 comments
The technical evidence was subtle, but gold appeared to have its best day in months on Thursday. The night before, we had told subscribers to brace for a new wave of selling that would bring the April Comex contract down to at least $1073, exactly $23 below the previous day’s settlement price. When the dust had settled, however, the futures had fallen no lower than $1088 – off a mere $8 from the previous day’s close. Moreover, the reversal from the day’s lows was swift and decisive, leaving April Gold at $1108 by day’s end, $20 off the lows. Most encouraging of all, however, was that the bounce came precisely from a “Hidden Pivot midpoint,” and that it ultimately blew past two resistance peaks on the hourly chart without pausing for breath. Taken together, these telling technical signs » Read the full article