Tuesday, March 1, 2011

Newmont Mining has a ways to fall before the stink bid I've suggested would come into play, but you should set an alert nonetheless, since the corrective pattern from which the target was extrapolated is compelling.

April Gold spent every blissful moment of yesterday's session screwing the pooch, but if the futures should turn even slightly serious today, look for a thrust to 1422.10.  The 'p' midpoint associated with that minor target lies at 1413.70, suggesting that night owls might be able to extract a bullish camouflage opportunity from any teeter-tottering that occurs around that number.  The five-minute chart reproduced alongside shows two micro-peaks that look well suited for that purpose. _______ UPDATE (9:33 a.m. EST):  A subtle but potent leg formed around 12:20 a.m. EST with a pop to 1414.20 followed by a 1413.40 'C' low that generated a 1413.80 'X' entry. The initial rally got to 1415.90, but a subsequent pattern with an ostensibly "failed" point 'B' high at 1416.50 (failed because  it tied an important peak recorded on Monday) generated a new entry signal with a 1418.60 target and a shot at the eventual overnight high, 1423.90.

The AB impulse leg shown is pure sausage, since it failed to exceed the 54.30 low recorded last July, but the pattern is so pretty otherwise that we can, and should, use it to attempt bottom-fishing in this stock.  It's been quite a while since we held a position in Newmont, but attempting to establish one at the 'D' correction target shown would appear to be a very low-risk gambit.  Accordingly, I'll recommend buying 400 shares with a 50.40 bid, good-till-canceled.  I've also set a screen alert at 52.28, since that secondary retracement target could engender a tradable turn. _____ UPDATE:  Odds of our stealing the stock diminished with yesterday's breakaway gap, but well leave the bid in anyway, just in case.  _______ UPDATE (Thursday, March 3, 12:03 p.m. EST):  NEM is getting savaged today, pushing it closer to our 50.40 stink bid.  Regarding the lesser HP support at 52.28, you can test the water there with a 400-share bid, but I'd suggest doing so only if you are using camouflage to limit risk to literal nickels and dimes.  If you are unable to do this, try a 52.30 bid, stop 52.18.  FYI, the shakedown has obliterated the 53.41 midpoint support associated with A=60.19, D=50.35.  Because there are several patterns that project to within a a nickel of 50.40, odds favor a correction to that level. If so,, the pullback from October's highs will have amounted to an unexceptional 15%.  ________ UPDATE:  We just missed, Newmont having launched sharply higher after pulling back to 52.69.

So feeble were buyers yesterday that DaBoyz couldn't even short-squeeze this vehicle above the 1334.75 threshold where I'd said the rally would turn lethal for bears.  They'll have another chance today, though, since sellers have been even more feeble resisting an uptrend that has been all waft and no thrust.  The nearest Hidden Pivot lies at 1334.25, just shy of our trigger level, but I wouldn't count on it for stopping power.  In any event, we'll want to short an old target at 1356.00 if and when the futures get there, since th target (shown in the chart) remains valid. Pivoteers may notice a pair of purple coordinates that define yet another bullish possibility. Their D target is 1373.25, and so a stall at the associative midpoint, 1333.00, could have predictive value.

We've already taken a partial profit on a short position initiated an inch off yesterday's high, so there is little risk even if the broad averages head higher (as they always seem to do).  Adjusted for the theoretical gain of 0.18 per contract that we realized by selling two March 57 puts intraday for 0.80,  our two remaining puts have a cost basis of 0.44. For now, plan on stopping yourself out if they touch 0.50, a price that would leave us with no actual loss even after commissions.  If the Cubes do get second wind and pop above yesterday's high, we'll plan on re-shorting the little s.o.b. at 60.36 by buying four April 60 monthly puts. (They settled yesterday at 2.76.)  The target pattern, clear as day on the weekly chart, is shown in the inset.  _______ UPDATE (10:37 a.m. EST):  The sneaky little s.o.b. head-faked on an opening-bar gap to 58.02, but the puts went no lower than 0.55, so we remain long two of them.  Close out one, good-till-canceled, if they should touch 1.00. If successful, we'll own a free put (or multiple thereof, depending on how many puts you bought initially) with zero risk. _______FURTHER UPDATE: The puts hit 1.00 around 1:30 p.m. and have since slid back to 0.94 after topping at 1.02.  We now have a single contract remaining for each set of four originally purchased. The profit-adjusted cost basis of our position amounts to a 0.12 CREDIT, implying a $12 gain and no loss possible even after adjusting for commissions.  We'll simply forget about this one until it's time to roll into the April contract, assuming we get the chance. In the exaggeration-prone and oft-disingenuous world of direct mail marketing, our profit might be headlined as representing a "SENSATIONAL 20,000% ANNUALIZED GAIN!!!!!!!!!"

The U.S. could be hit with widespread food shortages as early as April, according to an article linked recently in the Rick’s Picks forum, “Food Supply and Affordability Are Seriously Threatened.” The author, Kellene Bishop, alluded to a perfect storm of factors likely to impact food supplies and prices. “It’s headed into our homes no longer than six months from now, and more likely to be obvious six weeks from now. Unless you’re enjoying an income that can take a 40-50% increase hit in your essential expenses, then I’m certain you will not be spared the impact of this snowball that’s rolling down hill, gaining in momentum and size; and it’s coming right to our front doors.” Evidently not one to panic, Bishop suggested that in anticipation of grocery-supply disruptions and explosive price increases, we start preparing now with a “methodical, peaceful and deliberate mindset” and no fears of an Armageddon-like event. “I believe firmly that a daily awareness and effort to create a more self-reliant world is critical in developing one’s ability to endure any other type of crisis.” Not all of those who commented on her essay shared the author’s Zen approach to getting ready, however. There was this response, for one, from a take-charge dad whose brood seems unlikely to starve even if America a few years from now comes to resemble the post-apocalyptic vision of hell-on-earth depicted in Cormac McCarthy’s The Road. “I Spent 11 years in the US Army,” he wrote, “three years in a Ranger battalion, two years as a weapons instructor, one year as a Pathfinder team leader, five years’ regular infantry, and one combat tour. Because of this I have no illusions of the evil that lurks in the hearts of men -- seen it first-hand. I am a single parent…my 14-year-old son and I have