Friday, March 1, 2013

Although we're using a correction target in the Junior Gold Miner ETF that is significantly lower, I'm recommending bottom-fishing near current levels nonetheless. The stock looks scary here, and that's why it may represent opportunity.  Our theoretical risk in any case can be held to literal pennies per share by using a 'camouflage' entry strategy.

Opportunity and risk go hand-in-hand, and so we should view GDXJ's dance at cliff's edge as a potential buying opportunity.  As always, we needn't get swept up in the panic if the stock falls -- only to diligently monitor the action on the one-minute chart, since that's where others' fears and nuttiness will reveal themselves in the form of simple impulse legs that can get us aboard safely precisely when GDXJ is reversing to the upside. The two blue lines that extend to the edge of the chart are actually Tradestation screen alerts at, respectively, 16.04 and 15.73, and I'll be using them to jolt me if something interesting happens. I'd suggest that you do the same, and to call out the trade in the 'camo' chat room if you're feeling bold and helpful.  This is a speculative play, mind you, and we shouldn't lose sight of the fact that we have a bear market target at 13.15 that is still outstanding.

Although we talked about shorting this stock just a few days ago, a second look during yesterday's 'impromptu' session online convinced me there are better stocks to bet against.  Better, perhaps, that we should attempt to get long using the pattern shown. If AMZN is consolidating for yet another push higher, we should see a bullish reversal from the p midpoint shown. It doesn't yet exist, and it may not even come to exist, but you get the idea. _______ UPDATE (March 4, 1:30 a.m.): Amazon's vital signs still look bullish following the recent failure of a downtrending abc to reach the p midpoint of the corrective pattern (see inset).  The stock was a camo buy at the turn and will remain so on any impulsive opportunity that pops up on the lesser charts. _______ UPDATE (March 5, 9:43 p.m. EST): Stock met midpoint resistance yesterday, producing no decisive outcome (see inset).  However, a two-day close above the 275.97 pivot would make AMZN an even-odds bet to embark on a climb to 296.96, the D target of the pattern. _______ UPDATE (April 8): The stock's daily chart has turned impulsively bearish, with a worst-cased target of 242.05 over the near term. A two-day close beneath the midpoint sibling of that number, 254.71, would make the target itself an even-odds bet.

All of yesterday's gasping, wheezing and hacking couldn't push the futures above Monday's high (see inset), adding to the suspicion that these rallies are just setting the hook for bulls.  Just one more measly tick to the upside would have turned Thursday's price action into a bullish impulse leg on the hourly chart. Alas, the intraday peak merely tied Monday's. This means, moreover, that any upthrust that gets past it now must be viewed skeptically; for, as we know, the kind of buying that can keep going doesn't need pullbacks and running start to clear what in this case was not even a primary peak (i.e., 1530.00), but a secondary one. Even so, I wouldn't hazard a prediction concerning what DaSleazeballs might attempt on a Friday. And because there's still an outstanding rally target that I've been drum-rolling for a month,  it would be premature for me to write an epitaph. The target is accessible in the archive, but if you're not a paid subscriber click here for a free seven-day trial. It will allow you to go anywhere on the site, including the 24/7 chat room, and to receive intraday e-mail bulletins that contain real-time trading ideas.

A hundred years from now, historians researching the early years of this century may need to fast-forward to get to the good stuff – assuming there is any good stuff to be found.  Global news nowadays seems increasingly to resemble the sordid swill that was always a staple of local-news round-ups:  Bodies of Six Boys Found in Scoutmaster’s Basement. Town Claims Fracking Caused Birth Deformities. Bed Bug Plague ‘Out of Control’. Mother Suffocates Twins after Hearing Voices. From a global-news perspective, the item-of-the-hour is Dennis Rodman’s trip to North Korea. We’ll give the Washington Post credit for recognizing the silliness of the story with a tongue in-cheek headline that captures the banality of Kim Jong-un’s lunatic existence:  As Dennis Rodman Visits, North Korea Pledges ‘Bitter Hatred’ for the U.S.  So much for basketball diplomacy. In a better world, Disney would transform the DMZ into a theme park based on the “new and improved” 42nd Street, and Mr. Kim would die of cancer, consumption, or – wouldn’t it be ironic – Lou Gehrig’s Disease. We welcome the comic relief that the day’s headlines bring us nonetheless, since the alternative is to talk about how the Dow Industrials rallied 175 points yesterday on whatever it was that Helicopter Ben said.  Recall that just a couple of days ago, the news media told us that a 200-point selloff in the Dow reflected concern over Italy’s recent election, which was said to have been anti-austerity and anti-status quo.  And now, in the wake of an equally overdone and meaningless rally on Wall Street, we are being told that “investors” were pleasantly surprised by the Federal Reserve’s apparent decision to stay loose. As though a politically feasible alternative even existed.  We leave it to that politically insufferable moron-cum-Nobelist Paul Krugman to interpret the latest non-twist