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Lower Lows Coming in Gold

By: Rick Ackerman, Rick's Picks

-- Posted Thursday, 21 January 2010 | Digg This ArticleDigg It! | | Source:

Rick’s Picks

Thursday, January 21, 2009

“Phenomenally accurate forecasts”


A forecast for Comex Gold sent out to subscribers Monday night came within a dime of nailing the low of yesterday’s $33 plunge. That’s the good news, and some subscribers evidently were able to make hay with the prediction. The bad news is that it looks doubtful that the 1106.80 print that marked the February contract’s intraday low will hold, given the recent strength in the U.S. dollar. You can see how powerful the greenback’s uptrend is in the chart, below, of the NYBOT Dollar Index.  Yesterday the index scored its most impressive gain in six weeks, rallying to within a hair of a “Hidden Pivot resistance” at 78.69. The actual high was 78.45, and although it could turn out to be an important top, this looks doubtful given the shallow pullback that has occurred so far. If the resistance point is decisively exceeded today, however – say, by 0.10 points or more – or if it is exceeded on a closing basis for two consecutive days, we’d infer that the rally is bound for at least 80.78 -- roughly three percent above current levels.



Gold (and silver) would likely come down hard if that were to occur, continuing a correction begun in early December from around $1227 an ounce. The correction has already gone as low as $1075 (basis the February contract), but renewed weakness in the precious-metals sector could easily create a lower low. We’ve provided a specific price target for such a correction in Thursday’s “Touts” section of Rick’s Picks, but if you are not a subscriber, you can gain access to this proprietary information, along with entrée to the 24/7 chat room, by clicking here.  Suffice it to say, if the Dollar Index were to reach the 80.78 target mentioned above, the corresponding pullback we might expect in Gold would be even larger in percentage terms than the dollar’s gains.


Just a Correction


That said, we should mention that we see any prolonged bout of weakness in gold and silver as a buying opportunity, since our long-term outlook for both remains quite bullish. Precise upside targets well above these levels for bullion are given in the archives section of Rick’s Picks that is accessible to all subscribers, including those who have joined on a trial basis. The purpose of these targets is to guide subscribers in managing the risk of long- and short-term positions. Even if the 1106.80 downside target does not survive this downtrend, it will have allowed subscribers to test the water without much risk of drowning.  By avoiding extravagant “billboard” predictions of huge moves up or down, we narrow the focus to shorter-term swings that are generally easier to predict. 




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.

-- Posted Thursday, 21 January 2010 | Digg This Article | Source:


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