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-- Posted Tuesday, 12 January 2010 | Digg This Article | | Source: GoldSeek.com

Rick’s Picks

Tuesday, January 12, 2009

“Phenomenally accurate forecasts”

Early Monday evening, Gold was holding onto most of the impressive gains it scored a day earlier. You needn’t be a technician to see unfinished buying in the chart below. It shows Sunday’s explosive, $25 rally in the Comex February futures contract, followed by a tedious consolidation that was still in progress 24 hours later. Shorts have good reason to be nervous when gold shows such reluctance to give up ground. As recently as Christmas they were salivating over the prospect of a major selloff. Gold had come down hard from an all-time high of $1227 recorded earlier in the month.  When quotes dipped beneath $1100 just before the holidays, some were predicting the bull market had breathed its last. In retrospect, it appears they were wrong. Assuming the $1075 retracement low holds, the correction will have amounted to about 12% -- mild and healthy, as far as bull-market consolidations go.

Notice how Sunday’s buying frenzy drove gold’s price past four resistance peaks.  Using Hidden Pivot analysis, we require only that two such peaks be surpassed to create a bullish “impulse leg.” This leg obviously has power to spare.  Above peak #4 is another peak at 1170.20 that is unlabeled. If the February contract were to get past it by Wednesdays’ close, that would refresh the bullish impulse, putting even more pressure on shorts. It would also practically guarantee a test of the $1227 high. Bears can see this as well as we can, implying that the $57 rally it would take to put the futures at the threshold of new record highs is likely to occur very quickly. Traders should therefore be ready to seize the breakout opportunity if 1170.20 is breached within the allotted two days.

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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. There is a substantial risk of loss in futures and option trading, and even experts can, and sometimes do, lose their proverbial shirts.  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 © 2010, Rick Ackerman. All Rights Reserved. www.rickackerman.com

-- Posted Tuesday, 12 January 2010 | Digg This Article | Source: GoldSeek.com

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