Rick’s Picks

Wednesday, February 9, 2005

For investors who’d rather be smart than lucky 

To the many of you who are closely attuned to gold’s vital signs, let me broach the possibility that the dollar reached a short-term top yesterday. Rick’s Picks has been bullish on the buck for the last two months and recently projected a rally top in the Dollar Index at exactly 85.37. Yesterday, this hidden-pivot was exceeded by just 0.02 points, an overshoot small enough to fall within my margin of error. We should therefore anticipate weakness in the dollar over the next several days, at least, and corresponding strength in gold and the euro. Both have looked pretty sickly lately, but if they’re ready to rally, this would be a good time to get rolling.

Coincidentally, in the last two days, we established speculative long positions in two junior mining stocks that subscribers had inquired about during one of Ricks Picks’ twice-weekly Q&A sessions.  One of those stocks, Durban Roodeport Deep, had been making its way down to a hidden-pivot target at 1.21 that we first advertised here on October 19. For your guidance, we will be tracking 200 shares purchased at that price, using the usual micro-tight stop-loss. We are using a stop because, as we noted earlier, DROOY could fall to as low as 0.80 if it closes beneath 1.16 for two consecutive days. Along with DROOY, we added 400 tracking shares of Canyon Resources yesterday after we were reminded by an alert subscriber that we had long ago projected a potential bottom on CAU at 0.82. About an hour into the session Canyon bounced from that price exactly, finishing the day at 0.87. We’ll use a stop-loss at 0.79 for now, since, as we pointed out intraday, this is not a trade on which one should bet the ranch.

With shares of these two junior miners rebounding modestly after hitting predicted lows, is there anything in Newmont’s behavior to corroborate a possible turnaround in precious metal shares? Perhaps. In mid-January I projected a low of 39.72 for NEM, and it has been lazily working its way down to that hidden pivot ever since. Yesterday, Newmont recorded an intraday bottom at 40.14, the lowest the stock has been since August. It’s got just a bit farther to go before it touches our target, but if that happens and the stock turns higher for the remainder of the day, it would be an encouraging sign for the precious metals sector as a whole.  However, if NEM should close below 40.14, or trade below 40.00 intraday, it would be akin to the groundhog seeing his shadow: six more weeks (give or take two weeks) of “winter”.   

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Precise Targets for Gold, Oil and Bonds

Grappling with the trend? Check out Rick’s Picks’ archives to see how well Rick Ackerman has done with his forecasts and trading strategies for the following:  Apple Computer (AAPL), Barrick Gold (ABX), Agnico-Eagle (AEM), Afrikander Lease Ltd. (AFKDY), Apollo Gold (AGT), Applied Materials (AMAT), Amgen (AMGN), Amazon (AMZN), Anadarko Petroleum (APC), AU (Anglogold Ashanti), Bema Gold (BGO), Baker Hughes Inc (BHI), Beazer Homes (BZH), Citigroup (C), Canyon Resources (CAU), Cambior (CBJ), CCJ (Cameco), Coeur d’Alene, Centerpoint Energy (CNP), Cree Inc. (CREE), Cyberonics (CYBX), D.R. Horton (DHI), Durban Roodeport (DROOY), eBay (EBAY), Eldorado Gold (EGO), Fannie Mae (FNM), Great Basin Gold (GBN), Gold Fields Ltd. (GFI), Goldcorp (GG), Glamis Gold (GLG), Gammon Lake Resources (GRS), Golden Star Resources (GSS), Hecla Mining (HL),   Health Management Associates (HMA), Harmony Gold (HMY), Iamgold (IAG), Kinross Gold (KGC), Linux Gold (LNXGF), Loews Corp (LTR), Magnetek (MAG), Minefinders Corp (MNF), Microsoft (MSFT), Newmont Mining (NEM), Northfield Laboratories (NFLD), Northern Orion Resources (NTO), Northgate Minerals (NXG), Pan American Silver (PAAS), North American Palladium (PAL), Phelps Dodge (PD), Placer Dome (PD), PMC-Sierra Inc (PMCS), Pacific Rim (PMU), Randgold & Exploration ADR (RANGY), Research In Motion (RIMM), Sears, Roebuck (S), Seabridge Gold (SA), Silverado Gold Mines (SLGLF), Sterling Mining (SRLM), Silver Standard Resources (SSRI), Suncor Energy (SU), Stillwater Mining (SWC), Taser International (TASR), Tan Range Exploration (TRXAF), Vista Gold (VGZ), Wheaton River Minerals (WHT), Western Silver (WTZ), Exxon-Mobil (ZOM). Futures contracts and indexes: E-mini S&P, Mini-Dow, Diamonds, Crude Oil, Bonds, E-mini Nasdaq, Gold, Silver, Palladium, Copper, Crude Oil, Palladium, Natural Gas, QQQ, OEX, Euro, Yen, Dollar, Cotton, Coffee, Lean Hogs, Sugar, Soybeans, Cocoa, Orange Juice, Semiconductor Index.

Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2005, Rick Ackerman. All Rights Reserved. www.rickackerman.com