Thursday, December 23, 2010

The Indoos could seriously damage bearish hopes and dreams if they continue to push higher on the monthly chart. Notice how a print exceeding 11867 would create a bullish impulse leg of monthly-chart degree.  That's a mere 308 points, or 2.7%, above current levels.  The blue chip average could get there this year, even at the current pace, but it could do so in just two days if there were just one more robust short-squeeze left before New Year's.

A print today at 29.650 would perk up the hourly chart, but failing that, we could consider bottom-fishing at 28.940 if the futures fall moderately. If a tight stop-loss on that trade were to get hit, it could portend more downside to 28.280, a Hidden Pivot; or perhaps to 28.170, where a trendline shown here yesterday comes in. _______ UPDATE (10:43 a.m. ET):  The futures bottomed at 28.945, a single tick from my target.  If you got on board at the low, partial profit-taking is in order, since the powerful bounce has amounted to 24 cents as of this moment. Officially we hold no position, since the one-tick miss was as good as a mile.

With some upward chop along the way to alleviate the tedium, February Gold is trading exactly where it was nine weeks ago in mid-October.  Yesterday, the futures never even got close to the modest benchmarks I'd flagged above and below the market. Since they remain valid as, respectively, bullish and bearish trigger points, I'll repeat the numbers for your guidance: 1412.50 or 1370.80.  In addition, a two-day close above a Hidden Pivot midpoint at 1401.90 would strongly imply a follow-through to at least 1442.10.  As before, if the futures fall, the first place we might try to bottom-fish other than via camouflage is 1370.80, the midpoint support of a corrective pattern.

During this week's tutorial session, I was joking, sort of, when I said it might take the rest of the week for this swamp-gas hoax to reach an extremely modest, 1257.25 rally target that even now seems as inevitable as the next sunrise. Anyone who got long on my say-so has been accruing profits at the rate of about 12 cents an hour, but your diligence should have produced sufficient gains by day's end to buy lunch. If you've stayed long for the whole, fabulous ride, risk some of your lucre to get short with a 1258.25 stop-loss.  Take the position home overnight only if it is at least 4.00 point in-the-black at the bell.

(Here's a man-bites dog story from Cam Fitzgerald, a frequent contributor to Rick's Picks  who lived for a while in Ethiopia. Cam paints a picture of an African nation that will be unfamiliar to many readers; for in fact, even though Ethiopia has only begun to emerge from poverty, its economic prospects are as bright as you will find anywhere on the African continent. To understand why, read Cam's first-hand report .  RA) This is a growth story. A few years ago, I spent some time living in Ethiopia. I was in the suburbs of Addis Ababa, getting to know one terrific family in particular: the mother, who was the real head of the household; the father, Abba, a shoemaker; and his four single daughters, all in their thirties. What could possibly go wrong? OK, I am already getting off track. This is supposed to be an article about Ethiopia’s boom and the inflation that has come in its wake. I call the daughters “my gals” when I talk about them with friends, and we keep in touch almost daily via e-mail.  One is a student, and the other three work: as a translator, a seamstress and a secretary. They all have good educations, speak English and are in every way typical of women you might meet anywhere in the world: the same hopes and dreams, the same troubles with men and the same daily worries about meeting the bills, making ends meet and trying to save. Well almost the same. You see, these women earn a grand total of 2900 Ethiopian birr in monthly income between them. That’s roughly $175 dollars for six people to share -- a fairly typical income in Ethiopia.  However, I never thought of the family as poor during the time I knew them. They own a home,