ARCHIVED COMMENTARY
Downside Targets
For Silver & Gold
For edition of September 20, 2006
Gold stocks got pounded once again yesterday, buttressing an earlier forecast here of a further decline in December Gold futures to at least $513. We’ll continue to fish for a bottom in selected stocks as gold falls, since this can nearly always be done without risking much more than small change; however, I have my doubts that any significant turn will occur before the target is reached.
In the meantime, the Rick’s Picks chat room has been attracting its share of gold bugs, some of whom are becoming adept at buying mining stocks at Hiden Pivot supports without risking an arm and a leg. (When we tried this in Newmont last week, we actually exited with a small profit on a long position before the stock succumbed once again to gravity.)
(Click to enlarge)
One stock that attracted particular interest in the chat room yesterday morning was Coeur d’Alene, a popular silver play. A Hidden Pivot denizen posted a “buy” in CDE shares at a support that proved to be just 11 cents off the intraday low, and although the subsequent bounce left him in-the-black by day’s end, the rally was not quite strong enough to have made him very confident about holding the stock overnight.
There is good reason to be cautious in silver, as I pointed out during the session. To wit, last Friday’s low in December Silver at 10.55 created a menacing impulse leg of daily-chart magnitude. This suggests that the Decembers are about to fall to 9.61 or lower, which if true would have bearish implications for Coeur d’Alene, not to mention dozens of other companies that produce silver.
Not surprisingly, crude oil is showing signs of further fatigue as well. The downside target we looked at in the chat room is 60.57, basis the December mini-contract. If it’s achieved, that would represent a decline of 2.5 percent from current levels, with a similar decline expected in the pit-traded futures.
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Seminar FAQ?
Registration forms for the October 28-29 Hidden Pivot seminar at the Fairmont Waterfront in Vancouver went out last week to those who earlier had said they plan to attend. Click here to receive the form if you were not on the list. If you are wavering, here is some possibly useful information that was elicited by the following query:
“I received the email with the registration form this weekend. I am seriously considering attending the weekend in San Fran and would like to ask a few questions which should help me make my decision easier.
“I have studied technical analysis and traded for a short while using various parameters to determine which stocks to trade and when. I have also studied options trading and traded options for a short while. My account was never funded at a high enough level to really do this full time and I then found an opportunity to work in the giant online gaming industry.
“That brings us back to this:
“What level of knowledge should I possess to be able to understand and learn the things you will be teaching? “
There are no prerequisites. The method I teach is unlike any other, and the concepts are more visual than mathematical. It is fundamentally simple, since price action is the only variable considered.
“Do you provide enough information and training that I can come back home and immediately begin applying the concepts and techniques in my direct access account?”
Yes, you will come home from the seminar with enough knowledge to try some easy trades. However, before students put more than mere pocket change on the line, I strongly urge them to solidify their learning, and to build their confidence, by visiting the free chat room that has been set up mainly for their benefit.
Just four months after the seminar, some of my grads are nearly as good as I am at identifying Hidden Pivot swing points. My goal is nothing less than to make every student as proficient at forecasting as top pros who do it for a living. With just a couple of months of free mentoring, I can promise you that you will never need to ask some “expert” what he thinks about this stock or that, or about “the market”.
“Will I need other subscriptions and paid access to various other services to put this knowledge to use? (I will gladly subscribe to your newsletter bulletin, but some programs require other subscriptions after they have collected the seminar fees with no mention of this before the conference. I do not mind additional monthly charges but they should make sense and not be there for the primary sake of creating an ongoing revenue stream without any real benefit to the subscriber!)”
Though not required, a Rick’s Picks subscription will give you access to the chat room; it should prove sufficiently useful to pay for itself. I encourage you to subscribe and warrant that you will find it well worth the price.
“What is the recommended minimum amount to have in my direct access account to trade using your Hidden Pivot method?”
Trading relatively cheap options in lots of four, $5,000 should be more than enough. I currently keep about $25,000 in my direct access account, since this allows me to hedge trades with stock, and to sell puts and calls naked-short. However, most of the trades I recommend, and most of the ones that I do myself, are relatively simple and involve buying stock, puts or calls, not naked-shorting.
“Are there any books that you recommend reading before attending the seminar?”
The 110-page classroom manual you will receive is complete in itself and adequate for self-teaching. For a good option primer, try Options Demystified by my friend Tom McCafferty.
“Anything else you would like to mention about the material covered during the weekend?”
You will not find an easier forecasting system that works as well as this one.
“Sorry for the long email – I am very serious about making a decision to fly down to San Fran so your thoughts are greatly appreciated.”
No trouble at all. I hope the information I’ve provided is helpful to you.
