-- Posted Thursday, 14 June 2007 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Wednesday, June 13, 2007
“Phenomenally accurate forecasts”
Yamana shares didn’t exactly soar after we bought them yesterday, but because we got in a penny off the intraday low (using a stop-loss of just six cents!), we can afford to be patient. Here’s the recommendation exactly as it appeared in the Touts section of yesterday’s edition of Rick’s Picks: “We came away empty-handed yesterday, but let's try a somewhat different strategy this morning, bottom-fishing with risk tightly under control. Using a Hidden Pivot support at 12.34, we'll bid a penny above it for 200 shares, stop 12.29.” Yamana subsequently settled at 12.53, but it would need to hit 12.87 today or tomorrow before we could sit back and enjoy a presumably untroubled ride to a nice profit.
Speaking of being patient, we received a note yesterday from our good friend Chuck Cohen, whose unequivocal enthusiasm for mining stocks has always been leavened by a willingness to recognize that smart investors rarely get rich overnight. Chuck thinks a speculative mania in precious metal shares is still a ways off, but he’s quick to add that it is never too early to stake out speculative positions in some of the more promising companies. I’ve listed three of his very favorites in the Intraday Notes section of Thursday’s Rick’s Picks, including a penny stock operator that holds a potentially explosive stake in Ghana. I expect that some of the precious metals experts who hang out in the Rick’s Picks chat room will want to dissect these stocks forthwith, but I’ll likely limit my own contribution to the technicals, since that’s where I am most comfortable.
Don’t Read This If…
Chuck is bullish as all get-out on U.S. equity shares, a stance with which I must reluctantly agree, notwithstanding the disastrous look of the U.S real estate market and the upward skew in rates. Much as I try to come to grips with the obvious fact that the stock market has no connection to reality, Chuck is a true believer in this apparent paradox, for reasons that he has explained below. If you are a permabear, you may want to avert your eyes. He writes as follows:
“I am convinced that both the stock market and the gold market are being set up for a sharp move up here as everyone continues to focus on the sinking bond market. The Rydex ratio of bulls to bears is now down to .98 which means that there are almost as many bears as bulls. In the past, all significant bottoms and upward thrusts have come from these levels.
Building a Base
“Also, again today there has been very heavy put buying on stocks. This propensity to buy puts after a couple of sloppy days has been one of hallmarks of the stock market as it has moved up. Bonding these two indicators together and you have the foundation for another leap. Since it is a triple witching option week, I think anything could happen during the remainder of the week, but I continue to believe that this rally, or whatever you might call it in stocks will not end among such caution and perceptible pessimism.
“Now what does this mean for our poor orphans, the gold and silver markets? We are still in a strange cycle where gold has been tracking, although not very well lately, the stock market, such as it did following the bottom for stocks in 2002. So far since gold bottomed out in late 2000, we have had gold go in an opposite direction from a falling stock market, correct as regular stocks plummeted to their bottom in 2002, track almost perfectly the move up in stocks, and now lately, it has deeply underperformed stocks. If my analysis is correct, we should see a catch-up and then gold begin to vastly outperform the stock market such as it did in 1973-74.
Hedge Fund ‘Pups’
“Take a look at the charts from Stockcharts.com of both the HUI and the Dow over the past decade to study their relationships. I believe that the fundamental driver behind the recent sloppiness in stocks and gold is the sharp rise in bond rates. Most of these hedge fund pups that are whipsawing the gold market can't remember, or do not know that the great gold move in the 1970's was accompanied by higher rates all through the decade. We should see the same relationship from here. It might take a little more time but the breakout is inevitable. “
Thank you, Chuck, for sharing your wisdom and original insights with Rick’s Picks readers, We are always grateful and eager for your thoughts.
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Online Seminar: Last Call!
Only a few students have signed up so far for the June 30-31 online Hidden Pivot Seminar, so if small class-size appeals to you, this is the session you’ll want to attend. The seminar will likely be the last I will offer at a time of day that is convenient to students from Australia and New Zealand, but the show will go on regardless of how many students enroll.
If you have been waiting for just such an opportunity, please click here (then click the “Upcoming” tab) to reserve a place in the classroom, or here for detailed information about the course itself. Incidentally, these hours will work for anyone in the U.S. who would prefer to take the course in the evening. The hours, in Eastern U.S. time, are from 6:30 p.m. to 9:30 Friday and Saturday, June 29-30. This translates to 8:30 a.m. to 11:30 a.m. Sydney time, Saturday/Sunday; or 6:30 a.m. to 9:30 a.m. Hong Kong time.
Free to All Graduates
Incidentally, all seminar grads will soon have free access at all hours of the day to a recorded version of the seminar, as well as to the Q&A forums held in conjunction with each class. In addition, I am in the process of creating an advanced tutorial built around some especially difficult charts. It will also be free to seminar grads and accessible round-the-clock.
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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 © 2007, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Thursday, 14 June 2007 | Digg This Article | Source: GoldSeek.com
