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-- Posted Thursday, 12 February 2009 | Digg This Article | Source: GoldSeek.com

Rick’s Picks

Thursday, February 12, 2009

“Phenomenally accurate forecasts”

With Comex Gold trading around $850, we projected a $100 rally to at least $952 in a commentary a while back. Having also promised at that time to don a grass skirt and dance the hula in Times Square in the middle of winter if the forecast didn’t pan out, we breathed a sigh of relief yesterday when the April contract apexed at $949 on a powerful surge of more than $50. (Just a few more points and we’ll have only one more “hula number” to worry about – a $29 target for the shares of Goldman Sachs, currently trading for around $95.)

Concerning the $952 target for April Gold, we don’t expect it to be a pushover when it’s finally hit, presumably today or tomorrow. In fact, we’re recommending that day traders attempt to short there with a very tight stop-loss of about 90 cents. (The precise Hidden Pivot target lies at 952.30.)  For those not familiar with our technical methods, we use Hidden Pivots not only to trade and to adjust long-term positions, but also to gauge trend strength. How so?  In this instance, because the 952.30 target has been so long in coming, we would expect it to contain the rally for at least a day or two. However, if the futures were to push decisively past it by, say, $2 or more within an hour or so of first touching it, we would infer that there is considerable buying power still percolating beneath the surface. At that point we would be confident that a test is imminent of the $1,000 barrier that so far has proven so daunting.

Dollar Looks Buoyant

If there is a reason to be cautious it comes from the chart of the Dollar Index, which offers no strong evidence that a collapse is at hand. However, a picture of continuing strength in the dollar could change quickly, and I have therefore provided in Thursday’s Touts a benchmark that you can use to determine whether the dollar might be about to give way. There is also the possibility that the dollar and gold are about to rise simultaneously relative to other currencies. While a strong dollar would not preclude gold’s rise against most other currencies, it would argue against the likelihood of a moon shot in bullion at this time.

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Rick's Picks publishes a daily trading newsletter for gold, stock, commodity, and mini-index traders 240 times per year. 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 © 2009, Rick Ackerman. All Rights Reserved. www.rickackerman.com 

-- Posted Thursday, 12 February 2009 | Digg This Article | Source: GoldSeek.com

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