-- Posted Tuesday, 16 May 2006 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Tuesday, May 16, 2006
For investors who’d rather be smart than lucky
Via the bulletin launcher, I disseminated a very precise correction target yesterday for June Gold as well as a recommendation to buy bullion futures (or an equivalent) aggressively if and when the target is reached. If this hidden-pivot support works as anticipated, and the futures trampoline from it, the correction will have amounted to about nine percent from recent highs. That’s a pretty steep move, occurring as it will have over the course of just two or three days, but it would hardly be extraordinary.
Naturally, there is a possibility the June contract will fall to the target and continue lower. But that would have little financial consequence for us, since our “buy” order will be linked to a very tight stop-loss. Besides, any such breach of the support would yield additional and possibly actionable information concerning the strength and likely duration of the correction. Usually, we infer that if a pivot is exceeded, even slightly, the trend will continue at least to the next. Keep in mind as well that a pullback to as low as $613, a roughly 16 percent drop if measured from recent highs, would not even dent the bullish case from a technical standpoint, since it would merely mark a 0.618 correction of the rally from mid-March’s lows near $540.
Selloff No Surprise
Fortunately, as nasty as this shakeout has been, it should not have caught any readers by surprise, since it is closely in line with a warning that I issued here less than a week ago under the headline “Yellow Flag Out for Gold Bulls”.
For the record, a perhaps even more urgent warning was disseminated in yesterday’s Touts concerning the stock market. Specifically, we zeroed in on a visually obscure but nonetheless crucial support for the Nasdaq 100 Trust (QQQQ), inferring that its breach, even if slight, would hold dire implications for investors. The way in which things played out on Monday was interesting to say the least, and I would strongly suggest that you check out my current analysis for the QQQs to see why. As a practical matter, we will be looking diligently for an opportunity to get short while we still can, leveraging this last gasp of bullish hubris for all it’s worth.
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** Hidden-Pivot Seminar **
A subscriber has offered to produce a Hidden Pivot Seminar in the New York City area for those of you who were unable to attend my course in Colorado a while back. If you’re seriously interested, please contact me by e-mail, ranking your preference for August, September or October. I am also considering a West Coast seminar later this year or early next, so if you think you might attend, drop me a line
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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 © 2006, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Tuesday, 16 May 2006 | Digg This Article | Source: GoldSeek.com
