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From the monthly archives:
October 2011
From a Hidden Pivot perspective, yesterday’s thrust in this vehicle was more impressive than the one considered in today’s Silver Wheaton tout. Specifically, the Gold Bugs Index has already cleared an ‘internal’ peak — one of two that must be exceeded to create a robustly bullish impulse leg on the hourly chart. (The second lies at 568.69. See inset.) It’s a fly-or-die situation, since a failure to hurdle these peaks straightaway would leave HUI in technical Purgatory.
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Assuming index futures continue higher on Tuesday, I’ve laid out a strategy for getting short at the expected top but have also suggested catching a ride north as prelude, since there was potentially 26 points of upside for the E-Mini S&Ps.
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The 1256.50 rally target given here yesterday remains valid as a minimum objective, but any higher and we’d probably be looking at 1271.50, at least. I’d rate the higher number a less risky short, and so I’ll officially recommend doing so with a 1271.25 offer and a 1272.25 stop, one contract. If you are schooled in the “camouflage” arts, however, I’ll suggest getting long from here to 1271.25; and then reversing the position via a four-contract short from near 1271.50. If the expected top occurs during market hours, check back here, since I may update with a specific, detailed strategy in real time. Want to learn how to nail swing highs and lows precisely, and to manage trade risk with a simple approach? Click here for information about the upcoming Hidden Pivot Webinar on November 16-17 and a $50 discount.
Why Chuck Thinks Stocks Are Ready to Scream
by Rick Ackerman on October 26, 2011 12:01 am GMT · 39 comments
Rick’s Picks occasionally publishes opinions with which we disagree. The inflationist argument below, bullish on stocks but also on gold and silver, comes from our savvy friend Chuck Cohen. On stocks, at least, if not on bullion, Chuck’s scenario goes against our own expectations, since we’re looking for a global economic bust that would send shares into a steep dive before year’s end. While this could also push gold and silver lower, we still expect precious metals to perform well in relation to all other classes of investables. Economic expectations aside, the broad averages have broken above the tedious sideways correction of the last six weeks, and the charts of many key stocks are undeniably bullish. There are also less-than-subtle signs that the Fed is eager to get QE3 under way with the explicit goal of pumping up stock prices. Keep these things in mind as you read Chuck’s contrarian take on the markets – a follow-up to a piece he did two weeks ago that we disseminated to paid subscribers. If you’d like to contact Chuck directly about his financial consulting services, or about mining stocks in particular, click here. RA]
Following the recent move up in stocks, I want to update my piece of October 4 (A Bottom Is At Hand) by making some comments regarding stocks, and more importantly to the gold community, about the disappointing lag in the precious metals.
First, the stock market. In just two weeks, while the media and most investors continue to dwell gloomily on the financial landscape, the Dow has recaptured almost 1400 points (13%.) Today we are closer to the April high than we are to the recent low. In fact, both the market behavior and the Dow chart are remarkably similar to those of last year at the bottom in August. (The chart below shows how it unfolded from May 2010 to the end of August. Simply substitute 11,000 for 10,000.) And for those of us who have a short memory, the 2010 low came amidst an almost identical hysteria that a total collapse was at hand. At the very bottom, Death Cross and Hindenburg sightings were seen all over the globe and many were confidently predicting Dow 5,000 or worse. As I pointed out in my October 4 e-mail to clients, it is at such extremes of fear that major bottoms are made. » Read the full article