My Precious
As the equity markets continue
to follow the beat of a down trend, there are places to trade on the long side
that have nice intermediate up trends. Below is a chart of the
December Gold
Contract (GC02Z). There is actually a two -month uptrend in place where we are
making higher highs and higher lows.
Most recently we have made a pullback into
a large Fibonacci price support zone from 314.75-318.50. This zone has nine
price levels. Also, this decline is at 10.5 points from the Sept. 24 high to the
Oct. 8 low. The previous countertrend decline was 10.8 points. So, we have
some nice symmetrical moves in this trend.
I am focusing on
Harmony
Gold
(
HGMCY |
Quote |
Chart |
News |
PowerRating) as a stock play on this futures contract.
Looking at the chart of Harmony below, you will see that we have a nice pullback
from the Sept.
9 high down into a solid price support zone from 12.44-14.09. I’m looking for
opportunities to be long this stock with my stop just below 12.44.
And while we’re waiting
for the markets to open tomorrow let’s get ourselves reconnected to our golden
roots.
“I reached my hand down
and picked it up; it made my heart thump, for I was certain it was gold. The
piece was about half the size and shape of a pea. Then I saw another.” –James
Marshall
After making the greatest
find in the history of the West, Marshall and the other workers went back to
work. But they kept stumbling upon more gold.
Still in disbelief, Marshall took samples back to Sutter’s Fort. Sutter and
Marshall tested the shiny metal as best they could — a tattered encyclopedia
gave them clues. It was gold, they concluded — but neither man was happy about
it. Sutter was building an agricultural fiefdom — he didn’t want the competition
that gold-seekers might bring. And Marshall had a sawmill to build — gold hunters
would just get in his way. So they made a pact to keep the discovery a secret.
But it wasn’t long before
stories of gold filtered into the surrounding countryside. Yet there was no
race to the American River. The news of Marshall’s gold was just another fantastic
tale — too unlikely to be believed.
The gold rush needed a booster,
and Sam Brannan was the man. A San Francisco merchant, Brannan was a skilled
craftsman of hype. Eventually, the gold rush would make him the richest person
in California — but Sam Brannan never mined for gold. He had a different scheme — a
plan he set into motion by running through the streets of San Francisco shouting
about Marshall’s discovery. As proof, Brannan held up a bottle of gold dust.
It was a masterstroke that would spark the rush for gold — and make Brannan rich.
Brannan keenly understood
the laws of supply and demand. His wild run through San Francisco came just
after he had purchased every pick axe, pan and shovel in the region. A metal
pan that sold for twenty cents a few days earlier, was now available from Brannan
for $15. In just nine weeks he made $36,000.
Good night!