As we went to press Monday night, February Gold was fixing to stop out a bullish position we’d advised that produced explosive, although perhaps fleeting, gains. For subscribers who acted on the initial recommendation made here last week, there was a theoretical profit of nearly $6000 per contract at recent highs near $1767. (Click here for a free pass to our daily recommendations and forecasts.) But because we had resolved to stick with this bullish play and swing for the fences, we watched passively as bullion quotes receded back into the by-now-familiar muck of uncertainty. To be sure, our position will survive if the futures trade no lower than 1716.20. But we’re not counting on it. And if gold were to trigger the stop-loss and continue south, the next place we might consider bottom-fishing would be near 1702.60, a “Hidden Pivot” support determined by our proprietary forecasting method. » Read the full article
Gold was getting socked early Tuesday morning as we went to press, down as much as $23 a short while ago. This was well beneath the protective stop-loss on our single-lot position, and it will put into play a 1702.60 pivot that can be bottom-fished with caution.
The last few rally patterns on the hourly chart have reached their ‘D’ targets, so the worst we should be right now, short-term, is neutral. And yet, it’s hard not to be rooting for the stock market to drop-the-hell-dead, since it will take nothing less than that to start Wall Street on the long, long road back to integrity. Under the circumstances, and so that we don’t come to the races on Tuesday with no horse to bet on, let me suggest using the 1241.00 target shown as a telltale whose breach would earn just a little respect for bears. Bottom-fishing near 1241.00 using ‘camouflage’ is recommended, since a print at that price will be viewed by our competition as a breakdown beneath Friday’s 1242.00 low. What do we care if we can test the water without getting wet.
Based on my chat room post late in Thursday’s session, subscribers were able to stake out some small ‘Jackpot Bets,’ buying expiring calls at the 112 and 113 strikes for as little, respectively, as 0.21 and 0.15. The latter options traded for as little as 0.10 yesterday before rocketing to 1.00 when Bahh-Bahh found traction after the opening and soared $5 in the space of an hour. It can, and often does, perform similar feats on a given day, and that’s why I would rather be long a few out-of-the-money calls for cheap on expiration day than short them. The goal of these jackpot bets, which we ordinarily initiate on Friday mornings in the first hour, is to cash out half of the options in the early going for twice what we’ve paid for them, assuming the opportunity arises. If successful, that leaves us with a risk-free chance to make perhaps 5 to 10 times our money. In practice, subscribers have done this or even better numerous times, and even when things did not go our way they were able to do no worse than break even.
I’ve included a chart that suggests that, from a purely visual standpoint, a run-up to as high as 114.80 on Friday is hardly unlikely. We don’t need that to happen to make a nice score, however, since even if BABA rallies just $1.50 or so in the early going, there will likely be an opportunity to ‘double out’ on half of our positions. If the stock opens lower on Friday there could still be a chance to get a jackpot bet down. However, I’d suggest doing so with options of a lower strike purchased for perhaps 0.20 or less. Don’t bet more than you are comfortable losing, since this gambit is highly speculative. My guideline is to invest no more than you would on some 20-to-1 horse that you happened to like. _______ UPDATE (November 21, 4:00 p.m.): Subscribers reported gains of 300% to 800% on the trade suggested above. Quick, substantial gains were painlessly achieved after BABA spiked on Friday’s opening bar to 113.25 — 3.63 above the previous day’s close. The leap caused expiring 113 calls that subscribers had bought for as little as 0.15 less than a day earlier to trade for 0.90 in the early going — a sixfold increase. At the same time, calls at the 112 strike that subscribers reported buying for as little as 0.21 soared to 1.60.
GDXJ’s ups and downs are in ‘dueling’ mode at the moment, alternating between bullish and bearish feints. It was mildly bullish when the stock slightly exceeded the 129.30 target shown on Tuesday. However, yesterday’s slide also exceeded a Hidden Pivot target — in this case a hidden support at 27.21. Taken together, the action suggests that this vehicle will spend the next few days marking time in the range 28-29. The picture would brighten on a thrust exceeding 29.20 on Thursday, since that would imply more upside to at least 31.24. Alternatively, a continuation of the downtrend past 25.67 would have equally bearish implications.
Idaho North [OTC symbol: IDAH] offers investors a potentially lucrative synergy between two very successful entrepreneurs. CEO Mark Fralich started out as a reporter with the Associated Press News Service but went on to co-found Spoval Fiber Optics before moving into the exploration business with Mines Management, Consolidated Goldfields Corp. and some other natural resource companies. Like most executives in the exploration business, he is an aggressive risk-taker. But he is also an astute bettor, perhaps never moreso than in his choice of Thomas Callicrate to head up his technical team.
Callicrate is bottled lightning, a geologist who may know more about ore deposits in Nevada than anyone else in the world. I counted no fewer than 250 file cabinets in the barn-size work buildings that surround Callicrate’s spectacular home in Carson City. He seems to have committed every geological map in those cabinets to memory, and he can tell you exactly where each and every rock came from in the massive stone fireplace that dominates his living room and in his beautifully landscaped gardens. The fact that he chose to affiliate with IDAH attests to his confidence in Fralich’s ability to exploit to-the-max whatever ore deposits the company is able to find.
From a technical standpoint, the company’s shares have not traded for long enough to offer a sound basis for prediction. The stock has fluctuated between 0.08 and 0.24 since being OTC-listed in November 2013. That said, it would be no worse than an even bet to hit 0.3000 a share, nearly double its current price, if it can push past the red line at 0.2150. That’s a Hidden Pivot midpoint resistance, and it will remain valid as a minimum upside target for the near term unless the stock falls below 0.1300 first.