July 2009

Any buying this morning should lift the futures to at least 14.115, but if that Hidden Pivot is exceeded by more than a few ticks, look for a second-wind surge to 14.175

Google looks capable of reaching 453.32 on the next pop, or perhaps 458.63 if the stock exceeds that number by more than about 20 cents.

Gold popped a dime above a 959.90 rally target we were using, implying that the next thrust should carry to ____, the first minor Hidden Pivot resistance above it. Please note in the accompanying chart that just a smidgen more than that -- specifically, ____ -- would be needed to kick the buying spree into a higher gear. 

There's a Hidden Pivot at ____ we can short that is equivalent to the rally target given in today's forecast for the cash Dow. Its provenance is shown in the chart (inset), and I'd be surprised if we didn't get a tradable pullback.  Officially, we'll buy two September 90 puts (DAVUL), stop ____, but you can change the order in any way that suits your style.  I estimate that the puts will be trading for around ____, and you can use that number with a limit order  to simplify things.  If you do, however, you'll need to make sure that your bid is not executed with the underlying stock trading above _____.

Just one more turn of the screw -- on the thumbs of shorts -- should push the Indoos the remaining distance to the _____ target drum-rolled here earlier. That number is a Hidden Pivot, but I am not recommending shorting there aggressively because its pedigree is not the finest.  However, it should serve just fine as an indicator of more strength to come, since an easy move through the resistance, or better yet a close above it, would be quite bullish for the near term. 

(Following is the fifth in a series of article on gold by Chuck Cohen, a financial consultant and investor based in New York City. At bottom are some specific stock recommendations.) Very few Americans own gold in any form. Even though gold's price has risen each year since 2001, about the only time we hear gold mentioned is in the ubiquitous "cash for gold" TV commercials. Don't you wonder who has any gold or jewelry left to sell?  The way it's shunned, you might think gold causes swine flu or greenhouse emissions. It is most baffling to me to see our profligate nation diligently avoiding the most rewarding investment of the last decade. Under the circumstances, it is hardly surprising that only a miniscule number of investors have ever ventured into the most speculative field of gold, the exploration companies. These small and unproven companies might have market capitalization of anywhere from $5 million to over $200 million. Some contain proven reserves, while some are still searching for the mythical El Dorado. But even to many gold experts and believers they remain intensely speculative and risky, perhaps leaving you to wonder, why bother?  Here are some of the reasons often given for avoiding them.  Only a tiny fraction of these properties ever get into production They are vastly undercapitalized. Small diluting financings pop up more often than do the shares Many are run by promoters who pump up the stock so they can unload their shares.  They Mine Money  Now there might be some truth in these claims if  these were ordinary times. But just consider that if you had applied these same arguments in the early 1990s, you would have missed out on the greatest speculative binge of our time - the technology-stock boom.  (Actually, most of us did miss it.)

The 9158 Dow target that I drum-rolled last week looks likely to be reached either today or tomorrow, so we'll keep it well in mind if stocks should resume their trek higher today. If it fails to show any stopping power, bears had better get out of the way.

I like a Hidden Pivot at 14.020 as a minimum upside objective for the near term, but any higher would imply 14.385.

These days, we speak of the price action in Gold as "bullish" in the same way we would describe a patient on life support as "alive".  It'll get better, I'm sure, but probably not before the Great Bear Rally of 2009 (/2010??) ends with either a bang or a whimper.  I've tried to sound encouraging by saying Gold futures are at least tradable while we wait, but after snoozing through Friday's dirge, I'm not so sure. Check out the graph if you want to see a picture of accumulation so quiet that a mere $10 rally would be a relative thunderclap. _______ UPDATE (11:21 a.m.): Gold has topped today a dime above a modest target given here earlier, a Hidden Pivot at 959.90. You can go back to sleep now.