-- Posted Sunday, 5 November 2006 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Monday, November 6, 2006
“Phenomenally accurate forecasts”
December Gold hit our bullish target yesterday but couldn’t get past it, suggesting that some further consolidation may be needed to set up for the next big push. We’d projected a rally to at least 630.60 a few days back, and that’s almost exactly where the futures stalled yesterday, at 631.40. However, if they can close above the target for two straight days, or trade more than 1.80 above it intraday, I’d rate the December contract an odds-on shot to achieve the considerably higher target flagged in the Touts section of Rick’s Picks.
We may not have to wait long, since gold shares looked primed to move higher on Friday. Goldcorp, a subscriber favorite in which we hold a small position, pushed above Tuesday’s high, renewing a bull cycle that should carry the stock to at least 27.37, 60 cents above Friday’s settlement price. Shares of Newmont Mining, which we also hold, looked less impressive, but the fact that they’ve managed to stay very overbought on the daily chart for more than two weeks is an encouraging sign. We hold a vertical call spread that was legged into for a net credit, so we literally can’t lose no matter what the stock does.
There is less certainty about a backspread we’ve been building, IBM calls versus QQQQ puts. The position is designed to generate a profit no matter which way the stock market moves, but it hasn’t helped that IBM has been moving sideways for nearly three weeks. Even so, my gut feeling is that option premium is cheap right now and that buying straddles and strangles is the way to go. The CBOE Volatility Index (VIX) has been dragging bottom for more than two months while stock market technicals have steadily deteriorated. We don’t have to bet the farm that volatility is going to explode, but puts and calls are cheap enough right now to warrant nibbling around the edges. We’ll know more on Monday, since bellwether IBM appeared bound for a Hidden Pivot support at 90.91 (see chart above), just 27 cents beneath Friday’s low. Watch for the turn at the target, since it could telegraph the resumption, for the broad averages, of the still dominant bullish trend.
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Last Call, San Francisco!
There are still some seats left at the two Hidden Pivot seminar scheduled -- in San Francisco next weekend; and in Sydney, Australia on December 2-3. You can request a registration form and further details by clicking here. Please specify which session you are interested in.
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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 Sunday, 5 November 2006 | Digg This Article | Source: GoldSeek.com
