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No Shill For GoldRick Ackerman
A subscriber took me to task in an e-mail yesterday for scaling back my coverage of precious metal shares in the last few months. In retrospect, with gold in the dispiriting throes of a bear cycle that began in November, my response is to ask, What more might I have said? I am as bullish as ever on gold's long-term prospects, but I cannot bring myself to be a cheerleader each day for precious metals when there is insufficient technical evidence to support the short- and intermediate-term bullish case. Nor can I track more than a relative handful of mining stocks in the labor-intensive way that I've tracked Bema, Kinross, Newmont, Canyon and a few others. In these stocks, to avoid the bull traps that have decimated the ranks of gold bugs since 2003, we've waited patiently to buy at hidden-pivot bottoms; taken partial profits on subsequent rallies; avoided buying on pullbacks that were to persist; and bailed out of specific stocks when they went against us, even while we planned to reacquire those stocks at still lower prices - usually hidden-pivot targets. This has not only saved us from losses, it has allowed us to make money on long positions as mining stocks have fallen. That's a pretty good trick, as I'm sure you'll agree, but it's not possible to do it with the scores of gold stocks that I've tracked cumulatively over time. However, by using certain of those stocks as proxies - usually, the stocks you suggest during our weekly Q&A sessions - I hope to provide the kind of information that will be helpful to those of you trying to manage gold portfolios through good times and bad. Moreover, to do that job effectively, I have completely tuned out all of the other bullion-touting gurus, even those with stellar forecasting records. If you want constant assurances that precious metals prices are about to go ballistic, this is not the place to look for them. The best I can do is call 'em as I see 'em, letting my track record speak for itself. Cooperative S&Ps Tuesday's edition contained just a few recommendations, but they were goodies. The 1171.75 low projected for the mini-S&P proved accurate to-the-tick (see chart below), although only night owls who were trading at 1 a.m. EST would have caught that bottom. It is somewhat unusual for overnight trading to produce a gratuitous low so distant from the day session's close. I say gratuitous because Da Boyz, having shaken down sellers on low volume in the wee hours of the night, seemed to have had little trouble running the S&P futures back up to Monday's highs when the futures pit opened yesterday morning. (Click on image to enlarge)
This was the second straight day in which a stage-managed rally narrowly failed to exceed the previous day's high, warning us in both instances of the weakness that followed. As I indicated yesterday in an intraday bulletin, my minimum downside target is still 1159.25, a potential swing low that would breach January's bottom and probably turn many fence-sitting technicians bearish. I'm bearish already, as you may have inferred - the moreso now, since Tuesday's destruction of the hidden-pivot support at 1171.75 implies that the next (i.e. 1159.25) is very likely to be reached. We've left our short from 1247.50 uncovered so far, but the pivot at 1159.25 looks sufficiently promising to warrant scalping against the position. Dogging Cameco We bought some Citi call options a nickel off their lows as a contrary play but just missed augmenting our long position in Cameco. We'll keep trying, though, since many of you evidently are interested in the stock, and because we've had good success trading it. (The 100 share position we still hold has about $5,600 of gains built into it due to earlier profit-taking.) Our bottom-fishing attempt yesterday was close but not quite close enough, since CCJ's low at 39.45 occurred 28 cents above the hidden pivot where we'd placed our bid. However, a 400-share bid in Bema Gold at 2.25, a penny above a hidden pivot we'd identified a while back, proved precisely on target. The stock plummeted 11 percent on the opening, to 2.23, before rebounding to close at 2.46. This "instant gain" will help fatten our edge in Bema. Now, as always, we'll try to nail down some profits so that we can lower our cost basis and hold Bema shares without having to sweat whether the stock has bottomed. As far as I'm concerned, this is the best way to play the mining sector right now, since it's possible the dollar will remain buoyant despite consensus expectations that it may be verging on collapse. *** Penny Pinching Grappling with the trend? Check out Rick's Picks' archives to see how well Rick Ackerman has done with his forecasts and trading strategies. Rick Ackerman 321gold Inc |
