January 2011

All of this week's bottoming action has taken place just above some key lows recorded in November, so I am hesitant to infer that lower prices -- meaning beneath Tuesday's 26.540 bottom -- are certain.  If the  futures do fall, however, they would probe possible Hidden Pivot support most immediately at 26.385, the 'd' target of the minor pattern shown in the chart. Below it, especially on a closing basis, there would be jeopardy to as low as 24.485. Alternatively, the futures would need to pop today to 28.575 seriously challenge bears.

I drum-rolled a target for April Gold in today's commentary, but without giving away the goodies to non-subscribers.  The Hidden Pivot I alluded to lies at 1291.90, and it looks like a high-probability bet to me, subject to a 1290.90 stop-loss.  It is my minimum downside objective, basis April, but as implied in the commentary, a decisive breach would portend more slippage to at least 1277.80, a target derived from the higher 'A' at 1394.70.

Gold and Silver got whomped again yesterday, adding yet more carnage to a correction that will soon enter its fifth week. For long-term investors who have chosen to ride out the storm, the selloff must seem brutal. And yet, from early December’s high at $1432 to yesterday’s $1310 low, the loss so far has amounted to just 8.5 percent. Granted, it’s been worse for some owners of mining shares, which have declined by a little more than 17 percent, basis the ARCA Gold Bugs Index. But even that falls shy of the 20 percent standard that is often applied to distinguish moderate corrections from truly ugly ones. How much further will bullion and precious metal shares fall?  Rick’s Picks has been using a worst-case target of 1296.50 for the Comex February contract.  It was first identified in the following trading “tout,” with the futures hovering around $1332:  “A 1296.50 target can be tortured out of the chart I’ve furnished, and its [technical] provenance is shown in red.  Because the pattern yielding that target is so visually un-intuitive, and because the breach of $1300 would touch off a minor panic, I’d categorize 1296.50 as a back-up-the-truck price where February Gold could — and should – be accumulated aggressively." A Buying Opportunity So there you have it:  With respect to gold futures, we regard anything under $1300 as a buying opportunity. With respect to the April contract that has just become active, the precise target is a bit lower than the one at 1296.50 identified above. If you are not a paid subscriber but would like to find out the exact number, a Hidden Pivot derived from proprietary calculations, you can access it by taking a free seven-day trial subscription to Rick’s Picks. Click here to sign up.  Once registered, you will also have access

Gold and Silver were consolidating their earlier gains Wednesday evening, but bulls have their work cut out for them if they want to send the bad guys scrambling for cover.  Index futures, meanwhile, were trudging higher toward obvious targets.  Knowing where things are headed, however, is no guarantee that we can surf the trend easily or even profitably.

From a purely economic standpoint it would be nice to think that crude prices are about to plunge.  That is the story making the rounds these days -- that the inflation trade is finished now that America, Europe and China have a grip on inflation.  Does anyone outside of the news media actually believe such poppycock?  In fact, crude oil's 60-minute chart says the long-term bull is hanging tough -- certainly no worse than that -- yielding just a shallow correction from recent highs above $92.  Remember, as long as crude is not about to collapse, neither is bullion.  Allowing for a worst-case breakdown in crude, $81 is definitely possible in the weeks ahead. However, looking at the chart, that seems like a good spot for the futures to base for a push to $100.

A too-familiar Hidden Pivot at 1305.75 remains my minimum upside objective for the near term, and it can be shorted with a stop-loss as tight as you please.  However, there is no bullish play from here simply because each marginal upside gain of a point has been followed by a gratuitous feint lower of three points.  Some rally.  Around 1286.75 is still the place to look if you're inclined to bottom-fish a swoon.

A follow-through exceeding 27.950 today would ignite the afterburners, and 28.575 would put the bad guys fearfully on the run. Meanwhile, on the lesser charts, every ABC pattern since 2:30 p.m. "worked" without trying to stop-out bulls, but the corrective action was starting to bog down early Wednesday evening.  This implies that camouflage will be needed to get aboard if you are worried about getting burned.

It would be tempting to say that the futures took off like a bat out of hell toward the end of yesterday's session, but in fact, the so-far $22 rally has barely registered on the hourly chart.  That's because the impulsive thrust has exceeded just one internal and one external peak so far -- just enough to qualify as impulsive -- and the latter is so close to the former that the two could be lumped together, effectively, as a single peak.  So what would it take to solidify the bullish case? I'd need to see a push today to at least 1353.20, since that would add to our count two more "external" peaks exceeded.  In the meantime, it's promising that the futures have turned higher from a midpoint rather than from its 'd' sibling at 1310.50.  That target will nonetheless remain valid in theory until such time as 1352.40 (aka point 'C') has been exceeded to the upside.

[So deep and pervasive are the economic lies in which we have all become immersed that few even question how the U.S. economy could be recovering when its foundations are rotted beyond remedy or repair.  A solution is at hand nonetheless, says Rick’s Picks contributor and forum regular Rich Cash, but it’s not going to come from the politicians or the Fed; rather, it will be punitively imposed on us by the collapse of a debt pyramid that as of this moment has placed a very real liability of $178,311 on every man, woman and child in America. Below, we give Rich free rein to say what cannot be said in a State of the Union speech – to say that the nation will not emerge from its long wallow until we face up to some hard economic truths. RA] *** 235 years after the first Declaration of Independence, a Revolution founded on the highest Constitutional principles of liberty and general welfare is well overdue according to Thomas Jefferson, who figured a revolution every twenty years was healthy for our Republic... We the People hereby declare… One definition of insanity is renominating to high office the same candidates and their friends representing special interests from both sides of the aisle, yet expecting different results. In January 2011, the usual suspects, some dating from the Nixon Administration and Vietnam War, began to throw their hats into the media-circus ring. It is finally time for fundamental reform, not just another quickie brand label or slogan change. A conspiracy of special revolving-door interests enriched themselves running this country into bankruptcy facing insolvency. We the people are on red alert. It is high time for real reform and repeal of white collar military Crime without Punishment. A passel of crooks took over Wall Street