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COMMENTARY for Tuesday
TODAY'S ACTION for Tuesday
Rick's Picks for Tuesday
A fall to at least 1140.10 seems unavoidable, considering the weight and precision of the corrective pattern (see inset). It’s too pretty to not pan out, really, even though we should expect a bounce from above (or perhaps just below) the 1168.00 low recorded on May 20, as well as from the 1155.00 target of a lesser down-pattern. We’d want to judge any such rallies strictly, since, at that point, the burden of proof for the intermediate-term outlook will lie with the bulls. _______ UPDATE (1:10 p.m. EDT): Gold has paid scant attention to my forecast, diving nearly exactly to the midpoint of a pattern I’d overlooked (5-minute, A=1194.70 at 4:50 a.m. on July 19), then trampolining $18 on the recovery to a so-far intraday high of 1193.70. We shouldn’t be too impressed, however, since the high fell a dollar shy of yesterday’s peak — not to mention, $4.20 shy of a peak at 1197.80 “along the wall” of last Friday’s steep decline. Bulls will need to clear that hurdle before we take encouragement, let alone get excited. Still, it’s nice to see bears on the run for a change.
Yesterday’s flim-flam price action created a pattern that projects to as low as 1033.25 over the near-term, subject to a bounce from a midpoint support at 1052.00. This assumes another leg down as robust as the impulsive decline recorded on Friday, but I doubt sellers will be feeling so feisty after yesterday’s exhausting bout of mud-wrestling. My outlook is bearish nonetheless, but look for more hysterics and conniptions first before the futures turn lower, perhaps later in the day. ______ UPDATE (2:05 p.m. EDT): Bears are getting deservedly reamed today after failing to do much harm to the 1052.00 support identified above. The actual low was 1050.75, and sellers seem to have abandoned their mission after the futures turned higher from just below the Hidden Pivot support. The futures have traded as high as 1075.00, but they’ll need to surpass a look-to-the-left peak at 1076.00 from Friday to put bears out of commission for perhaps another day or two.
Apple not only shattered the trendline support we’ve been monitoring, it did so with a gap-down opening that left no doubts about sellers’ seriousness. We should now expect to see a move back up to the support, which comes in today around 247.63, rising to around 248.03 by day’s end. It’s hard to imagine Apple’s phenomenal marketing success petering out as long as Jobs is in charge, but perhaps the charts are predicting a creative dry spell? Expectations were pumped pretty high, so it wouldn’t take much of a fall-off in profits to trigger a nasty readjustment. If so, a Hidden Pivot at 227.09 will be a logical correction target, subject to dithering near 244.99, a Hidden Pivot midpoint, in the days ahead. Alternatively, it would take a thrust this week to at least 258.38 to reverse yesterday’s damage._______ UPDATE (2:13 p.m EDT): DaBoyz have tipped their hand, brazenly demonstrating to anyone who cares that any story-driven selling in this stock is just a shakedown to steal shares at fire-sale prices from widows and pensioners. Apple quickly reversed this morning after a manipulated gap-down opening, and then the stock made suet of trendline resistance with a so-far $10 rally off the lows. It’s no surprise that AAPL has attracted Wall Street’s criminal element, since it is one of the very few publically held American companies with a credible success story to hype.
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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 Tuesday
I received the following note concerning Gold Resource Corp (GORO) from Peter Spina at Goldseek.com. He is very enthusiastic about the company, but I’ll leave the due diligence to you:
“In my 15 years as a gold investor, there are only a handful of companies that I have seen hold the vision and ability to execute a new gold deal, project like the management of Gold Resource Corp (GORO) has. After Rob McEwen purchased US Gold Corp. from the Reid brothers, they continued on with Gold Resource Corp., going public in late 2006. Just over 3 years later, they announced commercial production on July 1. With high-high grade gold and silver along with base metals, production costs are ultra-low. $200 an ounce and falling to around $0 as production moves to 200,000 gold eq. a year.
“Major points: GORO is now in production, significant dividends are likely to begin in the coming quarter or two (1/3 of cash flow targeted towards dividends going forward), and up-listing to NYSE: AMEX now underway. Unlike most gold deals put together, GORO has sustained an incredibly disciplined share structure, under 50 million shares and 53FD. No debt, cash flow beginning in a big way, the company is currently being revalued by the market.
“Here is my update on GORO, world-class ore grades, creating a world class deposit:
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Stocks, Gold Diverge, but with Little Zeal
by Rick Ackerman on July 20, 2010 12:01 am GMT · 13 comments
The weather could become Topic A around here if the markets get any more boring than they have been. Yesterday’s snooze fest was impressive in one respect, though: It demonstrated that the Dow can fall 265 points, as it did on Friday, and wake up Monday morning with no trace of a hangover. Did stocks perhaps fall because cyclical forces had ordained it? We’ll never know. But whatever may have been troubling traders as the week drew to a close, it was not a factor in Monday’s gratuitous waft higher. The Industrial Average closed with a gain of 56 points, showing no particular strength or enthusiasm, only a mild propensity to take the path of least resistance. The hum-drum price action is corroborated by some widely followed technical indicators, including the McClellan Oscillator. We’ll be hearing more about the McClellan later this week from our friend » Read the full article