It’s getting a bit late for a Santa rally, but you can’t blame DaBoyz for trying – trying every night, actually, after most U.S. traders have gone to bed and there are almost no sellers to resist the stock market’s natural buoyancy in a time of unprecedented monetary easing. We’ve lost track of how many times in the last month index futures hit their highs in the wee hours, only to fall into the red during the regular trading session. It happened yet again Sunday night when the E-Mini S&Ps wafted the equivalent of 90 Dow points higher on volume-less trading before dropping sharply to close off a hundred points. » Read the full article
The rally has made a mockery of the headline on today’s commentary. At the same time, it suggests that shorts had grown complacent, since bulls have never been capable of mustering this kind of buying power. Nonetheless, we must respect the fact that the upthrust is bullishly impulsive on the hourly chart and that it could go all the way to 1240.00 before hitting a Hidden Pivot impediment (A=1177.25 on November 30, B=1266.00 on December 8 = 1240.00 ‘p’). The proximal cause of this short-squeeze is an apparently successful auction of Spanish debt and an uptick in housing construction. Interestingly, the uptick is mainly in multifamily apartments, implying that the powerful bull market in residential rentals is starting to get legs.
Minor targets were exceeded so easily yesterday that we should skip the small stuff and consider bigger bearish patterns. One projects to 26.010, and we should consider it a done deal if the 27.970 midpoint support with which it is associated gives way easily. Both numbers can be bottom-fished, but more immediately we should look for subtle opportunities to get short. Just such a one was manifesting itself on the hourly chart as we went to press, and I’ll therefore recommend shorting on a sell-stop if the 28.855 entry trigger is hit. Take profits on half the position at the 28.755 midpoint, and on another 25% at D=28.550. With the single contract that would remain from an initial position of four contracts, you should use a bullish impulse-leg stop on the one-minute chart until morning. ______ UPDATE (2:13 a.m. EST): The short triggered around 9:45 p.m. but was stopped out at around 1:26 a.m. The theoretical loss was 11 cents, or $550 per contract. There was no chance to take a partial profit to reduce the risk, since the downtrend did not quite reach the 28.755 midpoint support of the pattern where we would have done so. In order to learn from this trade, I’ve substituted a 15-minute chart for the 60-minute so that you can see clearly where it went awry. To begin with, the 15-minute chart was where we should have looked for camouflage, not the hourly. And, as you can see, the ‘X’ where we initiated the short trade on the hourly fell within a bullish A-B impulse leg on the 15-minute chart. Under the circumstances, camouflage if properly applied would have told us to get long rather than short — and with much less risk. If you took this trade, please let me know in the chat room so that I can keep all who got trapped closely apprised, in real time, of the next Silver trade. And one more note: We should be especially careful about taking longs from these levels, since last week’s low exceeded by 30.5 cents an important midpoint support at 28.425 that I flagged here five days ago.
The chart shown has implications that may or may not prevent Japan from getting sucked into a deflationary black hole. However, the chart is quite clear on the question of whether BOJ will be successful in its longstanding goal of trashing the yen. (Answer: Yes, very.) The small rally in early October from around 0.9001 validates the pattern itself, and the decisive progress beneath that level since implies that the D target at 0.7332 is likely to be reached. This will obviously benefit Japanese exporters, but it will also put more pressure on manufacturers in the U.S. and elsewhere that compete with them. Traders should position from the short side until the target is reached, but be alert for a rally back up to the red line, since that would set up a ‘mechanical’ short to the target using a 0.9418 stop-loss. That’s far more than we would ordinarily risk, but you could cut it down to size by using the ‘camouflage’ technique. When appropriate, ask in the chat room if you’re uncertain about how to do this.
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. ______ UPDATE (November 24, 1:54 a.m. EST): GDXJ finally budged by moving above 29.28, albeit a day later than we might have preferred. Now, if the rally holds above Friday’s 28.42 low, a modest target at 30.43 will be in play — would become an odds-on bet if and when this vehicle pushes above the 29.43 midpoint resistance.
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.