September 2009

The futures failed to reach a targeted pullback low at 993.00 yesterday, suggesting that  the bounce off the actual low at 996.30 is likely to reach its 'D' target, ______.  The futures appeared to be corroboraating this scenario Monday night by pushing above the uptrend's midpoint pivot.

The futures have the potential to hit _____ on the next thrust - a target that has been corroborated by the stall within two ticks of its sibling midpoint 120^11.  The best way to board would be to use a camouflage 'B' that is recorded somewhere between 120^14 and 102^16.The opportunity could come and go quickly, so you'll need to be ready.

Putting aside the two targets in the stratosphere that I flagged here yesterday, there's a minor corrective one at 1052.25 that you could use for bottom-fishing with a stop-loss as tight as two ticks. Please note that it would take a print today at 1047.50 to turn the hourly chat bearish. ______ UPDATE (1061.25):  The stop-loss would need to have been at least four ticks, since the actual low occured at 1051.50. The subsequent bounce points to _____, subject to midpoint resistance at 1063.00, but neither number looks like it will be worth much for tradng purposes.

   [Rick has been under the weather with a possible case of food poisoning. Filling in for him today is Chuck Cohen, a financial consultant whose work will be familiar to many of you. The following appeared at LeMetropole.com over the weekend. Chuck thinks that as long as the news media continue to stumble around in the dark in their coverage of the gold world, we should remain confident about accumulating more bullion and precious metal shares for the long haul. RA] It took a mix of $1000 gold, the media's reaction to it, and a very fallow day to compose this piece. As serious as the news is these days, it is still difficult not to see the absurdity in what is unfolding. Now that gold has finally pierced $1000, I had expected to find repentance and mea culpas by a news media that has persistently resisted and even mocked the gold bugs for nearly a decade. But if the news over the weekend is an indication, gold might need to hit $5000 before the media finally head to the confession booth.  But that's great news, as far as I’m concerned. As we know by now, the less company we keep, especially from the mainstream, the better.   Consider the following, penetrating insights into gold that I found over the weekend. (And if the media are puzzled by why they have lost almost all credibility and readership, according to the latest Pew Research survey, then they should read these articles.  For This We Buy Barron’s? This weekend's featured article in Barron’s, by a Ms. Jacqueline Doherty (although I am suspicious that this might be merely a nom de plume of Jon Nadler, the Scarlet Pimpernel of the gold world), who concludes prophetically that "after a likely pullback of 10-20%, or

Just a few more baby steps and the futures will succeed at something that has haunted the long-term picture since February. At that time, a sharp, four-month rally narrowly failed to get past a key peak at _____. If the current thrust tops _____, it will create a quite powerful bullish impulse leg on the weekly chart. And incidentally, if the rally fails to get past gold's all-time recovery high at _____ (basis the Comex December contract), it could conceivably create a camouflaged entry opportunity on the weekly chart.  That would be rare indeed.

[We often feature the work of our friend and colleague Chuck Cohen, a NYC-based investment consultant who specializes in mining companies. Below, he explains why it is time for those who have been straddling the fence to buy junior gold shares.  He concludes with two specific recommendations that trade over-the-counter for less than $1.] Rick has asked me to write about gold with a focus on the junior mining companies, so here we go, along with a couple of specific recommendations. I tried to point out the pros and cons of buying the juniors last month, but let me now make a quick refresher. I also suggest that you go back to Rick's August archives to review my articles on gold and the junior sector. Advantages of juniors… -- They have been beaten down in price due to the credit squeeze last year. -- They are on very few radars screens -- certainly not on the radar of mainstream America, which is still scouring drawers and attics for loose gold jewelry to sell. -- Due to the supply/demand situation, many juniors will be bought by larger companies who need to buy ounces of reserves. Eventually, this will turn into a frenzy. -- In every mania, the smaller stocks eventually perform much better than the larger companies. -- Most importantly, the potential leverage (ounces to market cap), especially as gold really takes off, will be staggering. This is probably the single most important factor in  considering a specific company. -- Because of their leverage you don’t have to risk as much as you would with the larger companies. …and some disadvantages -- They are thinly traded, and some have wide spreads between the bid and the ask prices, so you have to be judicious once you have decided to buy one. -- Some

I posted some targets for this vehicle in the chat room the other day but missed one that could have immediate relevance: _____.  Notice in the  weekly chart how last week's high fell just 13 cents shy of the target.  That's close enough, and the target has been long enough in coming, that we should be prepared for a significant pullback -- one lasting perhaps 2 to 3 weeks. If the pullback turns out to be small stuff, however, and GDX pushes above _____, we would infer it's headed for at least _____, the 'D' target that results when you slide down to the one-off low at 17.59 recorded last November.

There are no clear targets for the correction begun from 17.690 on Thursday, so a Hidden Pivot support at 16.810 will have to suffice. A bullish reversal on the hourly chart would be signaled at 17.405.

The futures have spent two days in what looks to be a tortuous consolidation, but they don't look ready yet for another surge higher. If and when they resume their suicidal climb, there are no targets above that look like bet-the-farm shorts.  However, the two that I find most compelling, both from the weekly chart, are _____ and _____.  Pivoteers will notice that that the summer selloff was not sufficient to give us a legitimate B-C pullback, since it did not equal the required 0.618 of k-A.