Friday, April 27, 2012

The June contract has turned lower Thursday night after coming within inches of our all-purpose trendline. The move remains bullishly impulsive despite the so-far mild selloff, and its power should not be doubted, the thrust having exceeded no fewer than three external peaks. Camouflageurs should be prepared to buy-stop their way aboard via the 5-minute chart if a pattern like the one shown plays out on Friday. _______ UPDATE (2:23 p.m. EDT): The trade worked exactly as sketched. Entry by my instruction would have been at 1654.30, with a partial profit on 50% of the position at 1657.50, and another 25% at 1663.90, the D target. If I hear from two traders who got long according to the tout, I'll establish a tracking position for your further guidance.

GDXJ is in play once again for reasons anticipated in Thursday's tout. Check out the tout and the accompanying chart to see how a long entry can be approached.  Click here for a free 7-day trial that will put you at ringside for this one.

GDXJ has popped above the 22.91 'external' peak flagged here yesterday, so we should try boarding via the next 'b-c' pullback on the hourly chart. If it comes from above 22.13, however, GDXJ's strength will be too obvious for a stealth entry. Under the circumstances, I'd suggest looking for your entry 'X' on charts of 5-minute degree or less. For now, though, assuming the retracement comes from above peak #2, buy 400 shares at an 'X' trigger like the one shown, stopping it below 'C'.  Please let me know in the chat room if the order fills, since I'll establish a tracking position if two or more subscribers have gotten aboard using the tactic described above.

Yesterday's thrust tore through a 142^21 midpoint resistance with such ferocity that further progress to the 'D' target associated with that number, 144^06, is all but a foregone conclusion. With yields on the 30-year now at 3.06%, one more strong push is going to send them below the magical 3% barrier.  Who needs QE3 when the demand for U.S. debt is insatiable?  Please note that we'll be using the weekly chart to project targets above 144^06 and that the next would lie at exactly 146^04.

It doesn't take a technical genius to see where this rally is headed: 1439.55. That's the 'D' target of the pattern shown, and it would become an odds-on shot once the futures have closed for two consecutive days above the p midpoint, 1396.00. Camouflageurs should have a field day getting long, since even on the hourly charts there are 'externals' and 'look-the-lefters' galore.

With the world in the throes of an unprecedented credit blowout, gold’s failure to crack $2000 barrier can sometimes seem mystifying – the moreso as the correction begun in 2011 stretches on, now into an eighth month. Gold has acted more like wheat or corn than like money. Shouldn’t it reflect the fact that dollars, euros and yen are available to an insatiable group of borrowers, mainly large banks, at no cost and in practically unlimited quantities? Indeed. And yet, lately, gold has been unable to muster the ire, even, of crude oil, which appears to be gathering thrust for its first foray above $120 since 2008.  Meanwhile, Comex Gold has been lazily backing and filling since last September. If gold is not oblivious to the steady and relentless destruction of currencies, it seems unpersuaded that this is what the central banks are accomplishing by design. From a purely technical standpoint, gold’s reluctance to get in gear with crude, and to start acting like it knows what the central banks are up to, is not so mysterious. Let me explain.  I have written here many times that it is not bullish buying that drives stocks relentlessly higher in bull markets, but short-covering by bears. This was a dynamic I got to observe first-hand in the dozen or so years I spent on the trading floor of the Pacific Exchange. While bulls often rationalize their buying strategies by citing “fundamentals,” they probably understand at a gut level that PE ratios are no more useful a predictor of where a stock will be trading in six months than tea leaves. Small wonder, then, that bullish sentiment alone cannot summon the kind of torpedoes-be-damned buying it takes to drive shares through massive levels of supply.  But short-covering can, since the buying is rooted