-- Posted Wednesday, 21 February 2007 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Wednesday, February 21, 2007
“Phenomenally accurate forecasts”
We gave an all-clear signal for April Gold yesterday, only to see the futures reverse direction and go into a kamikaze dive after having touched a bullish tripwire the previous day. The tripwire was in fact a Hidden Pivot rally target at 676.80, and a short-term top there had been predicted when the futures were trading $14 lower. Sure enough, on Valentine’s Day, the April contract came within two ticks of our target, touching $676.60. This gave us reason to expect a pause for a few days, then a bullish lunge toward an even more important Hidden Pivot obstacle -- a pair of them, actually, at, respectively, 680.60 and 682.00. We thought this thrust was under way on Monday when the futures popped to 677.80, a dollar above the original target. However, it proved to have been a false alarm when the April futures went into a steep dive yesterday.
So how bad was the damage? To answer that question, we’ve reproduced a chart above that helped us to anticipate the rally to 676.60. I’ve labeled the two prior lows that the current decline would need to surpass in order to create a bearish impulse-leg of daily-chart degree. Specifically, the decline would need to breach the lower of the two lows, 646.60, by at least a single tick. Moreover, this would have to occur without an intervening rally lasting more than a single day.
Bottom line: Yesterday’s selloff fell well shy of creating a significant bearish impulse leg. Also, the fact that it came from within $1 of a projected top is all the more reason to infer that we are witnessing a correction rather than end of the bull cycle that has dominated since October. And even a fall to $630 would not be worrisome as long as there is an intervening rally of at least two days’ duration along the way.
Hidden Pivot Temptress
Speaking of Hidden Pivots, the E-Mini futures have been too coy lately to generate patterns whose outcomes can be confidently predicted the night before. But nailing swing highs and lows in real time intraday has been another matter, and we have been routinely calling trend reversals to within a tick or two. Yesterday, for instance, in the mini-S&P, we put up a chart in the Intraday Notes section to explain why a just-touched Hidden Pivot low at 1452.25 would likely mark an important bottom. In fact, the futures rallied 12 points from that number, reaching a high at 1464.00 that was just a single tick from a Hidden Pivot target disseminated in the chat room along the way.
The first target in particular was a gem, coming as it did from an ABCD pattern that was as far from intuitive as they come. My hunch is that rules-based patterns that don’t look so pretty are the ones that will continue to generate the most promising trades. Too many chartists are onto ABCD symmetry (aka the ol’ Gartley 1-2-3). But when we can identify ABCD wave forms that are as obscure as yesterday’s, it will tend to give us an edge over conventional chartists. For your perusal, I’ve left in the Intraday Notes section of Rick’s Picks a chart that peels the veil from our little seductress, showing the predictable logic of a down-cycle whose tradable beauty would be lost to most technicians, as it manifestly was to traders who missed the v-shaped bottom.
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Helsinki Seminar
Helsinki!? I just wanted to see if you were paying attention. In fact, I’ve received numerous requests to offer a Hidden Pivot seminar in Boca Raton, Florida, though not in Finland, and will do so if there is sufficient interest. Please let me know if you would be seriously interested in attending a Florida class. The two-day session would be held sometime in the Spring of 2007. To get on my mailing list, drop me an e-mail, including your contact information. The cost would be $1,500 USD.
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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 Wednesday, 21 February 2007 | Digg This Article | Source: GoldSeek.com
