It’s a sad time for America when a firm that does what Facebook does is on track to become one of our largest companies. Based on capitalization, the web-based lubricator of social interaction could be in the top 50 within a few years, or even in the top 25 if analysts’ wildest expectations pan out. Facebook’s IPO promises to top Google’s $27 billion offering, reaping early backers a giant windfall. But wouldn’t it be far better if a company that actually made something were to enjoy such extravagant enthusiasm on Wall Street? Facebook of course makes nothing, and what it sells is of little economic value to anyone. And yet its founder, Mark Zuckerberg, is about to become one of the wealthiest men in the world. » Read the full article
Price action early Tuesday morning was so tired that it looked almost incapable of generating any heat unless sparked by some sensational piece of news overnight. Unfortunately for traders, as of around 2:40 a.m. EST, the child-molesting teachers at an L.A. school were holding the top spot above-the-fold.
Gold’s downtrend stalled yesterday between two minor, bearish Hidden Pivots, but not before the June contract had taken out three more external lows. This is discouraging action for the near term, and it suggests the 1702.00 target given here earlier remains a good place to look for a tradable low. Alternatively, we can set the bar at 1747.50 (see inset) today to signal a meaningful resurgence of bulls. ______ UPDATE (2:33 p.m. EST): The April contract has rallied nearly $40 from this morning’s fake-out low, creating a bullish impulse leg on the hourly chart. Now, assuming 1752.60 holds as ‘B’ of the current impulse leg, Gold will need to pull back by at least $12.50 (0.625 of $20 k-A segment) to be considered fully re-charged for a C-D follow-through leg of as much as $40.
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.
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.