Friday, December 12, 2014

Crude Could Drag Gold Lower

– Posted in: Free Rick's Picks

January crude is flirting with a major long-term Hidden Pivot support at 58.45, having gotten within 35 cents of it at Thursday's lows. If the support gives way, we could see another $3 of downside over the next 8-12 days. Gold bulls should pay heed, since any corresponding weakness in precious metals could stop out a tracking position we hold with a cost basis that has been reduced to 1186 by partial-profit-taking.

GCG15 – February Gold (Last:1225.60)

– Posted in: Current Touts Free Rick's Picks

I've established a tracking position with a cost basis reduced by profit-taking to 1186.50. It is tied to an 'impulsive' stop-loss at 1215.20, implying traders should exit the position on any plunge that hits that number without an upward b-c correction following a breach of the first labeled low. This would not necessarily signal a resumption of the bear market; it is simply acknowledging that we cannot stick with a long position come hell or high water no matter how much we like gold. The position would still produce a $3000 profit on the stop-out, and we could hope to initiate a new long position as easily as we did this one. Looking just ahead, if the so-far two-day correction is about to end, we should see the futures pop to 1239.70 Thursday night. This would become an odds-on bet once the futures have exceeded the 1231.60 midpoint Hidden Pivot with which that target is associated. A move above 1239.70 would further attest to the health of the bull cycle begun on Tuesday from  around 1204. _______ UPDATE (11:06 a.m.): We exited the position for a theoretical profit of $2800 when the futures touched a low of 1214.80. I'm not too upset about this, since Russia evidently is selling gold just to cover fixed costs, including keeping its population fed and employed.  Trouble is, they're all employed in the energy business, or in a some line of business that supports it.