Thursday, March 24, 2011

Detour Gold is a Chuck Cohen pick that I aired in the chat room in the summer of 2009, when it was trading for around $8.80  a share.  I had asked Chuck for the name of a stock with speculative potential for my 90-year-old mother's portfolio.  This one absolutely had to be a winner, since my mother, a stock-picker of local legend, had shunned my advice since the mid-1970s.  At the time, I recommended that she do a covered write against some Loews Corp stock she'd held since the 1960s.  Loews shares hadn't budged in years, but naturally they skyrocketed after she did the covered write. Her shares subsequently got called away and the stock went to the moon.  Fast-forward 35 years. Having quadrupled her investment in Detour (which, ironically, was held in Loews' corporate portfolio), I can only hope I've redeemed myself.  For the record, she'll be selling half of her position on the opening, plus some Goldcorp stock acquired for around $35.  "No one ever went broke taking a profit," is how I sold her on this plan.  That, and the fact that she has been carrying forward a long-term capital loss that will nicely offset the gain.

Gold has lagged Silver, evidently taking its recent cues from crude oil.  Still, all of these trading vehicles are likely to continue moving higher until such time as World Peace breaks out and the The Bankers are marched in front of a firing squad.  Regarding Gold, it's easy to make the case for 1580.00 on the 240-minute chart (see inset), but we should like to see a two-day close above the Hidden Pivot's sibling midpoint, 1444.60, before our gaze shifts starward.  More immediately, we can use 1467.80 for a minimum short-term objective.  The target comes from the right-most ABCD pattern visible on the chart I've displayed, and it is subject to midpoint resistance at 1443.70, just $2 below the all-time high.  Once the pivot has been decisively exceeded that high will become a dead duck.

A rally target at 38.605 first mentioned here when May Silver trading 8% lower (at 35.775) is still my minimum upside objective for the near term. Bulls should be prepared for at least a tradable stall at that price, since the target is quite clear.  Day traders can try shorting with a stop-loss as tight as four ticks, but camouflage will be less risky as always.  That would entail waiting for an 'X' entry signal along the first southbound abcd pattern that materializes on the very lesser charts.

Looks like traders are scampering up the Wall of Worry once again. The market had a dozen good reasons to sell off yesterday -- and it did, at least for a while; but when the dust settled, easy money had once again had its way.  Each time the E-Mini S&P pokes its greasy little snout above structural resistance, the sellers -- mostly corporate insiders, if we are to believe what we read -- seem to melt away. Now, a Hidden Pivot resistance at 1304.75 is the likely objective of the next thrust. Since its sibling midpoint at 1292.00 has already been exceeded by four points, this move should be regarded as an odds-on bet. If DaBoyz act a little gutsier, though, they'll go the extra yard with a push past a look-to-the-left peak at 1308.00 shown in the chart. If and when that occurs, bears once again had better dive for cover.

So, what was it that Europe and the U.S. sought to gain when they plunged head-first into Libya’s civil war?  Beats us. We can understand what motivated the French, since they were the first to act on the possibly mistaken belief that their former good friend Col. Qaddafy was headed toward certain defeat. Considering the way things are going, they may have to remove the word “Alive” from the “Wanted Dead or Alive” poster they’ve effectively pinned on Kadafy’s caftan. As for America’s involvement, no one seems to know why we got involved in the first place, much less what will be required of us after the bombing stops. Perhaps the French will be so kind as to instruct us when the time comes.  In the meantime, the “international coalition,” which also includes Great Britain, seems to be having a rollicking good time strafing loyalists forces and “protecting” the rebels. But it’s more than a little unsettling to see the ostensible allies squabbling over what is to come next, and who will lead.  If it is nation-rebuilding our politicians have in mind, then Kadhaffi may indeed have to be exiled, if not rubbed out, since he doesn’t seem like the kind of dictator who will be content to chill at the oasis. More likely, as we mentioned here earlier, is that he will do everything in his still-lethal power to avoid handing over Libya’s oil capacity to the U.S., France, Britain et al.   Meanwhile, events thus far have attracted the bemused attention of Germany, Russia, China and a few other ostensibly neutral spectators who, one gathers, would always be perfectly content to do business with Kadhafy. Although this coalition of the unwilling obviously relishes telling the world how appalled they are by the allies’ strategically senseless assault against Kadafie, the