Wednesday, March 13, 2013

Yesterday's misstep by Google, coming as it did during an expiration-week, was the death sentence for our butterfly spreads (although they could easily have been exited for 3-4 times what we paid for them. We were shooting for perhaps 15-20 times our entry price.)  It's possible, now that DaBoyz have killed March speculative out-of-the-moneys in most of the high-flying stocks, that They will trigger off a short squeeze on Friday aimed at unloading April calls they've been holding against the Marches. That's why, just for the hell of it, we've suggsted holding onto one of the original four GOOG spreads.

If you've been waiting patiently to trade the breakout from the excruciatingly tedious range that has contained gold for nearly two weeks, your opportunity came and went yesterday in a tad less than four seconds. That's how long it took DaBoyz to goose this vehicle (at 7 a.m. EST, when relatively few were watching) to a level $10 higher where, it is assumed, a new pattern of unendurable tedium can begin. Did the rally have any meaning? It did, perhaps, at the time it occurred. But a few hours later, the creation of a bearish impulse leg on the lesser charts turned the overall price action into a less meaningful 'duel' between bulls and bears.  Bulls still hold a slight edge for the near-term, since 'their' impulse leg was the more impressive.  However, to confirm a bullish outlook for the minor trend would require a bounce from the p midpoint of the corrective pattern shown. Camouflageurs can attempt bottom-fishing there, but please note that more downside to at least D=1585.00 will become likely if p is breached by more than a few ticks.  Pivoteers may want to note my obsessive use of a one-off A here, which is why I drilled all the way down to the two-minute chart in the first place. I did this because of the very sausage-y quality of the point B low. ______UPDATE (March 15, 1:121 a.m. EDT): Zzzzzzzzzzzzzzzzzz,

Few exchange-traded investments have visited more pain on shareholders in recent years than bullion stocks.  Even now, amidst a spectacular surge in the broad averages, gold and silver mining shares have done little better than languish, making the pain even more acute for long-term precious-metal bulls.  Is it time to bail out of them? We think not, even though it looks like two popular mining vehicles, GDX and GDXJ, may have further to fall before they hit bottom. We’ll explain in a moment, but you can also click here to access a recent interview on the subject that we did with Al Korelin of the Korelin Economic Report.  So how much more damage should we expect?  GDX, an exchange traded fund (ETF) that tracks a broad portfolio of mining stocks big and small, has already fallen 47% since September 2012, from a high of $67 to a recent low of $35.57. We think it will shed another 15% of its value, dropping to exactly $30.34, before hitting bottom.  As for GDXJ, which measures a basket of junior mining issues, it looks primed for a washout to $13.15, representing a 12% decline from the recent bear-market low at $14.95 and a 70% fall from 2010’s summit at $44.86. If our expectations are borne out, we think the selloff will be worth enduring for two reasons: 1) the respective targets, “Hidden Pivots” identified with our proprietary  technical tools, look like back-up-the-truck buying opportunities, and 2) if a bear-market low is indeed nigh, the initial leap from Mindanao depths is going to be breathtaking -- so powerful that any further losses suffered between now and then are going to be recouped in mere days. In the meantime, long-term investors may simply want to visualize better times ahead as they prepare to weather what