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-- Posted Monday, 10 February 2003 | Digg This Article
The “Dirty Dozen” list of fools-gold stocks is rapidly taking shape. We received nearly two dozen suggestions on Monday, possibly owing to the wide circulation of MarketWise Black Box at some of the more popular gold sites on the Web, including www.321gold.com, www.gold-eagle.com and www.goldseek.com. So far, one company stands out as purveyor of the gold stock you most love to hate: Silverado (SLGLF). The Alaska-based miner has fluctuated between 8 cents and 90 cents over the last few years, but its rallies to the high end of that range have been relatively fleeting. Most recently, it has fallen from a high of about 70 cents earlier this year to an eight-month low last week of about 20 cents. Small wonder, then, that the stock is foremost in the minds of gold investors who are looking for revenge. Silverado would appear to be a nice fit with our Dirty Dozen list, since the company claims to be clueless about why the stock dropped like lead last month. In a release dated January 22, its president, Gary Anselmo, had this to say: “The Company knows of no reason to cause today’s dramatic fall in its share price. There is no material fact or information relating to the Company which has not been fully disclosed. In particular, the Company knows of no adverse fact or information relating to, or which would affect the Company or its share price.” If our Dirty Dozen list turns out as bad as we think it’s going to turn out, Mr. Anselmo will soon have plenty of company on the lower-rungs of public esteem. He might also take heart in the fact that the purpose of our list is to demonstrate that even the gold stocks that investors now revile are destined, in this still-nascent bullion bull market, to soar like the late, great dot-com stocks into the firmament of overvaluation. We promise to keep you posted as the Dirty Dozen list comes into shape. Radically Pro-War Essay We’ve written often about the impending invasion of Iraq, both pro and con, but here is the scariest essay we’ve seen to date. It asserts that the root cause of terrorism is the incompatibility of Arab culture with the modern world: http://www.siliconinvestor.com/stocktalk/msg.gsp?msgid=18556233 [The + symbol means we have an open position, while $ means there is actionable advice.]
Gold
APR GOLD (364.20): We’ve projected a pullback low near 358.90, a Fibonacci-based level, but with less confidence for purposes of bottom-fishing than if it were a hidden pivot. To keep things in perspective we should mention that a correction to as low as 344.86 would not even blemish the bullish look of the intermediate- and long-term charts.
GoldCorp (NYSE:GG) : Quote - Options - News - Profile - Message Board - Website
+ GG (11.58): As noted here earlier, a pullback to as low as 11.00 would be quite healthy. In any event, we hold 200 shares for an average 4.65, and no changes are contemplated. When the stock closes above 13.77, or trades more than six cents above that price intraday, we should assume it's bound for a longstanding target at 15.72.  
DURBAN DEEP (NasdaqSC:DROOY) : Quote - News - Profile - Message Board - Website
$ + DROOY (3.83): After purchasing 200 more shares yesterday for 3.82, we own a total of 600 shares for an average 4.38. Today let’s bid for 200 more shares at 3.69, one cent above an important hidden-pivot.
RGLD (24.70): To remain the very picture of health, Royal will need to arrest this pullback somewhere above 24.21, where the stock made a fairly important low on January 21. If not, it would be telling us it needs more time to recharge, implying a possible correction down to 21-22, where it consolidated for a powerful rally thirteen months ago.  
DJIA (7920.11): There are two hidden pivots just above that we can use for targets this morning: 7926.41 and 7992.03. If the first is exceeded within the first 30 minutes, we should infer the second is likely to be achieved soon thereafter. Looking at a bigger picture, our bearish scenario calls for a fall to at least 7467.65; or if any lower, to 7163.85. $ E-Mini S&Ps (836.00): The futures were on their way up to a hidden-pivot target at 842.50 when the closing bell rang yesterday. You can short an E-mini contract at that price in the first hour, stop 843.25. Switch to a 2.00-point trailing stop below 839.25, using 833.00 as your minimum objective. Our outlook for the next 2-4 weeks is bearish, with a minimum downside projection (still) of 793.75. MAR BONDS (112.08): If the futures can close today above a hidden pivot at 112.22 we’d rate them an even bet to take out late December’s high, 113.26. If it is a flight to quality rather than, say, a reaction to a rally in the dollar, gold quotes will confirm by surging higher. OEX (422.03): Yesterday’s peak was 422.65, but the more important obstacle to any rally today is a hidden pivot at 422.21. If the OEX is trading above that number after the first hour, we’d infer the short-term rally cycle has sufficient power to reach 425.92. QQQ (24.02): Yesterday’s closing-hour rally stalled just below a hidden pivot at 24.18. If that obstacle is penetrated this morning we should assume the OEX is on its way up to at least 24.50, a slightly more important pivot. You can short the higher number on your own terms, but I’d use the narrowest of stops initially – no more than 3 cents. MAR NASDAQ 100 (969.00): Yesterday’s modest hook in the final hour stalled less than a point from a hidden pivot at 973.25, but if the futures can get past it in the first hour today we’d infer they are on their way up to a minimum 985.50. Our outlook for the longer-term is still bearish, with a minimum downside projection of 924.50.
-- Posted Monday, 10 February 2003 | Digg This Article
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MarketWise Black Box is published on weekdays 240 times per year. Copyright 2003 by MarketWise. For further information please go to www.marketwise.com. All information was gathered from sources believed to be reliable The risk of loss in futures, stocks or options can be substantial; therefore only genuine risk s should be used for such trading. Futures, stocks and options may not be a suitable investment for all individuals, and individuals should therefore carefully consider their financial condition in deciding whether to trade. Commodity option traders should be aware that the assignment of a short position will result in a futures position. Past profits are not indicative of future profits.
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