-- Posted Friday, 13 May 2005 | Digg This Article
Rick’s Picks
Friday, May 13, 2005
For investors who’d rather be smart than lucky
Let’s you and I wake up this morning and break some mirrors, just to show the Karma who’s boss, okay? We’ll lean ladders against our houses and exercise beneath them at hourly intervals. And keep salt shakers at our desks to freshen the luck o’ the devil. And spray-paint our cats black, just to screw with our neighbors’ heads. And then, we’ll place our bets.
But first the bad news: When the opening bell sounds Friday morning, the most promising bet we could make will be on the “Don’t Pass” line in gold. Yesterday’s defenestration of bullion and mining shares caused certain vehicles that we track to turn what might have been a exhilarating turnaround day into a bloody rout. Specifically, the HUI “Gold Bugs Index” exceeded an important hidden pivot 172.69 by 1.15 points, and June Comex gold exceeded an analogous downside target at 421.40 by 60 cents. That might not sound like much, but in hidden-pivote-ese it amounts to wholesale carnage.
The fact that neither hidden-pivot support evinced the reassuring presence of strong hands implies that bullion quotes are almost certainly fated to continue lower. The good news is that June Gold will have another chance to turn around not terribly far below Thursday’s bottom. In fact, the prospect looks sufficiently promising that I’ve provided a strategy in today’s Rick’s Picks to attempt bottom-fishing next week with a stop-loss of less than a single point.
The pivot is about as confidence-inspiring as they get, and so has the potential to provide us with a rare trading opportunity in a favorite vehicle. The support looks like it will work very precisely, meaning that any over- or undershoot should amount to no more than two or three ticks, tops. But keep in mind that if the pivot is breached more than slightly, that would be a clear warning that gold is on its way down to a test of all-too-obvious support near $400.
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Taming the Mini-Futures
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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
-- Posted Friday, 13 May 2005 | Digg This Article
