January 2011

Price action yesterday in the Gold Miners ETF (GDX) looked encouraging, since the low fell within a few ticks of a clear Hidden Pivot support.  However, I've allowed for further slippage in today's tout, which identifies a target well below current levels.

Yesterday's low came within four ticks of the 52.50 Hidden Pivot correction target shown in the chart, so we should view the bounce as potential bottoming action.  Also, it is a tentatively bullish sign that the decline stopped just short of taking out the 52.43 low recorded in early September. If yesterday's bottom gives way nonetheless, I suggest fishing at 50.10, a Hidden Pivot target calculated by moving to a lower b-c pairing (shown). ______ UPDATE:  GDX appears to have put in a good bottom. Now let's see how much resistance the nearest rally target, a Hidden Pivot at 56.01 poses. If it falls easily, this rally could have legs. 

We are long 800 shares @ 14.91 against eight February 33 calls shorted for 1.94.  Cover the calls if the stock gets within a dime of a longstanding target at 28.55.

Having precisely reached a Hidden Pivot target at 1.3674 noted here earlier, the futures pulled back and are presumed headed for a second, more important one, at 1.3789.  Note that there is yet another at 1.3670 -- the midpoint of the pattern shown in the chart -- and that it was exceeded Tuesday by 29 ticks.  That implies more strength over the near-term, so traders should continue to play this vehicle from the long side as advised earlier. _______ UPDATE (January 30): Friday's reversal has created a bearish impulse leg on the intraday charts, so no more bullish bets for now. The fact that the high occurred without quite having reached 1.3789 implies that this could be the beginning of a serious decline. _______ FURTHER UPDATE (Feb 1, 12:07 p.m. EST):  The futures got second wind and hit a high so far today of 1.3798.  This rally was anticipated elsewhere in the touts section a couple of days ago, in a bearish forecast for the Dollar Index.  

The futures were two ticks shy of  a minor rally target at 1291.50 shortly before midnight EST, but keep in mind that it's just a stop along the way to 1305.75, a Hidden Pivot so slow in coming that we risk dying of boredom if it isn't reached within the next day or two.  The midpoint pivot associated with that number is 1286.75, so any pullbacks that get near it should be scrutinized for possible camouflage-buying opportunities.

The futures have veered higher late Tuesday night and appear to be bound for at least 27.105, a Hidden Pivot resistance whose provenance is shown in the chart.  The rally has already exceeded the 26.985 midpoint by two ticks, but there may be an opportunity to board belatedly via camouflage, since, as you can see, there is not yet an impulse leg on the five-minute chart.  A 27.005 tick would create one, but you may need to be quick to initiate a trade thereafter on a buy-stop. ______ UPDATE (10:09 a.m. EST):  The futures did indeed hit 27.100 on an upthrust, and they eventually went on to top at 27.150 just before dawn.  However, the one would-be camouflage opportunity that I can find on the lesser (i.e., 10-minute) charts was a non starter because the 26.945 point 'C' was formed (at 1:50 a.m.) from three bars rather than the one bar that we require.  

The 1321.20 target given here yesterday caught the low of yesterday's $16 swoon within 60 cents, advantaging any subscriber who took the initiative to get long. My gut feeling, noted here yesterday, is that February Gold will trade below $1300 before this shakeout ends.  However, we'll put feelings aside, as we nearly always do, and focus purely on technicals that point most immediately to 1339.50. Although that's just $6 above current levels, the futures appeared to be struggling at around 10:45 p.m. EST.  However, because they've exceeded the 1334.00 midpoint resistance by 70 cents, odds favor a second-wind push to the target.  If the correction takes another leg down, night owls can try bottom-fishing at 1331.40, stop 1330.90.  The downside target is corroborated by the bounce tonight from within a tick of its sibling midpoint, 1332.40. _______ UPDATE (10:03 .a.m. EST):  Yet again, a modest rally has died overnight -- in this case after failing not only to reach an "easy" target," but without having dispatched a look-to-the-left peak made Tuesday on the way down. All of this points lower.  _______ FURTHER UPDATE (3:55 p.m. EST):  Although this is almost unheard of, the futures have exploded in the final half of the session, rallying almost $2o while creating a mildly bullish impulse leg on the hourly chart. 

Even though we hold two February 5 calls that will produce a theoretical profit of $154 no matter what the stock does, it's still hard not to be dismayed by recent news developments that have caused the stock to plummet.  Kodak has lost a round in a patent infringement suit against Apple and Research In Motion.  More depressing than that, however, is that news stories reporting the ITC's patent decision have noted incidentally that Kodak has been living off lawsuits and royalties while apparently producing little of value.  How the mighty have fallen!  From a technical standpoint, the stock stood to bounce from a Hidden Pivot at 4.74 (5-minute, A=5.85, B=5.08 and C=5.51) -- as indeed it has Monday night, and rather precisely. This was a decent spot to try bottom-fishing on the first pass, but if the support now gives way, that would leave only vague support near 4.61, where the stock banged out some key lows in early December.  One more note: EK's lawyers think they will prevail in the end. In similar lawsuits already settled, Kodak did indeed win nine-figure settlements.

A 334.60 rally target given here yesterday in an update impeded Apple's progress for all of an hour, implying that bulls are winning the skirmish that erupted over the significance of Steve Jobs' leave of absence. I was bullish when the stock dove on the news, and I am bullish now.  My minimum upside target for the intermediate term (i.e., the next 3-4 weeks) is still $383.