Stocks reversed sharply yesterday after a gangbusters opening in nearly every sector but precious metals. Intraday, the Dow Industrials fell 139 points from high to low – a minor surprise, considering crude oil quotes were down more than $3.  Bullion and most mining stocks gapped lower on the opening and continued sinking until the final bell, presumably toward the moderately bearish targets that I broached here last week. They still have a ways to go, assuming my forecast for the Gold Bugs Index (HUI) pans out. I’d projected a tradable bottom at 203.91 if a hidden-pivot support at 210.33 gave way; and so it did, closing on the low of the day, 206.54.

A firm dollar surely contributed to bullion’s weakness, but there must have been some pent-up selling at work too, since in percentage terms, gold fell nearly three times as much as the dollar rose. My hunch is that neither of these trends will continue for long, since my longstanding, bearish target in the dollar index (77.60) has yet to be achieved. If the dominant trends are to resume, this event will likely coincide with a low near 203.91 in the HUI.   A second benchmark you can use is the 421.60 target I’ve projected for Comex February gold. That’s about as bad as it’s likely to get over the near term, but we should remain open-minded about further weakness if the hidden-pivot support at 421.60 is breached by more than a dollar or so.

Caught Bottom in Cameco

Some stocks made fairly substantial moves during the holiday period, most notably Cameco. We’d established a long position in the stock on December 22 at what turned out to be the to-the-penny starting point of a $10 rally.  There were profits of $4,000 to be had after just six trading days, but we opted to hold onto most of our position, selling only 25% of it to effectively lower our basis cost (to $94) for the 300 shares that remain. Today’s Inside Page provides fresh forecasts and recommendations for Cameco and  numerous other stocks that we’ve been following lately, so come on in and have a look!