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-- Posted Friday, 12 June 2009 | Digg This Article | | Source: GoldSeek.com
Rick’s Picks Friday, June 12, 2009 “Phenomenally accurate forecasts” We’ve never been gung-ho about head-and-shoulder patterns, mainly because they seem to pop up everywhere you look for them. Even so, there’s something to be said for the elegant simplicity of the two head-and-shoulder formations show in the charts below. The top chart is a bearish pattern in Comex August Gold that has been gestating for nearly a month. Its mirror image, shown in the Dollar Index chart below it, is a bullish, reverse head-and-shoulders that has been taking shape over the same period. If both patterns were to play out in textbook fashion, gold futures are about to take a spill, and the dollar to rise commensurately, within the next few days. 
Textbook patterns aside, evidence has been accumulating in recent weeks that gold is not quite ready yet to blow past $1000 once and for all. Our target for the August Comex contract, currently trading near $960, has been $1066; however, on the intraday charts, every time buyers take a running start at the Promised Land, the rally loses steam before it can surpass the two prior peaks that Hidden Pivot analysis requires to signal an impulsive move. And even when the requirement is met on the very lesser charts – say, the 1- or 3-minute bars -- it is invariably matched by a move of equal magnitude in the opposite direction. We refer to this dynamic as “dueling impulse legs,” and it suggests that traders are locked in a dither. More dithering would be all to the good as far as the dollar is concerned, since a sustained rally would increase the deflationary pressure on all who owe dollars. At some point, if these debtors can no longer continue to roll their loans, they will be forced to settle up in cash, potentially create a dollar short-squeeze. But even if panic conditions do not develop, a merely modest run-up in the dollar would be bad news for the economy. It is surely the last thing the government wants, or could have anticipated, in its panicked efforts to breathe a whiff of inflation into America’s imploding financial edifice. *** 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 Friday, 12 June 2009 | Digg This Article | Source: GoldSeek.com
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