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Looking for a Turn -- In Gold from $1140
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Has Gold’s price action been getting you down lately? Take heart, since relief could come as early as today or tomorrow in the form of a Hidden Pivot support at exactly $1140.10. For the last two weeks, that’s been our downside target for the correction begun five weeks ago from around $1266, although it didn’t begin to emerge with clarity until the August Comex contract plunged from $1208 right after the July 4th holiday weekend. At yesterday’s lows, the correction so far had knocked 8% off the price of gold relative to the all-time high recorded on June 21. Even though we’d been expecting this weakness, we told subscribers at the outset that we didn’t foresee anything more serious developing.
Although we avoid chiseling such predictions in stone, we’ve advised cautious bottom-fishing near $1140, using a tight stop-loss of $2 or less. Our confidence is high that there will be a tradable bounce from the target, although a decisive breach would be the equivalent of the groundhog seeing his shadow – i.e., six more weeks (or so) of winter. Please note that we’ve identified a secondary target at 1155.00 that may have been fulfilled by yesterday’s 1156.90 low. However, our gut feeling is that this Hidden Pivot support will fail, sending the August contract down to the more important one at 1140.10.
T-Bonds Turning?
Speaking of targets, a T-Bond forecast (and trading recommendation) disseminated to subscribers on Sunday night caught yesterday’s low in the September futures to the exact tick. We’d been quite bullish on the bond futures but told subscribers not to buy any contracts until the “Seps” corrected down to 126^07. We backed off the trade when the futures failed to hit 126^07 on the first pass yesterday morning, but the support itself appears to be holding. If so, a surge in the Bonds could portend the flight of capital from stocks over the near term. For that reason, we’ll reevaluate our 10757 target in the Dow – 220 point above current levels – if T-Bonds and shares diverge sharply today with the former going higher.
Rick Ackerman
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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.
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