Wednesday, August 22, 2012

Gold resistance

Gold Futures Daily
Gold futures have finally made a push higher on the daily chart and are now heading into a potential resistance zone between 1650-1675.

Edit: A couple of thoughts (ramblings) on the market: I thought we were starting to see a potential breakdown in the correlation between Gold / Euro / SPX. Gold and the Euro have moved up while the SPX has basically stayed flat. It could just be some catch up action by Gold and the Euro though..... considering they were lagging before. Now that both of them are at potential resistance areas, I'm confused as to what comes next. 1650-1675 on Gold futures and 1.2550-1.2650 on Euro futures are likely to be difficult resistance on the daily chart timeframe. If they pull back from this area, does the SPX pull back also? I keep thinking we will see a deeper correction in equity futures, and am currently short up to my eyeballs. I'm short S&P futures at 1414 with a hard stop now set at 1418ish. I'm also short Naz futures at 2766ish with a hard stop set at 2806ish. 10yr & 30yr Treasury futures have rallied up to their breakdown area from last week. 10yr futures have pushed further up into that zone, making me wonder if the breakdown was just one big shakeout. If that's the case, we should see equity futures move down tomorrow and Friday. One thing I am 100% certain of is that I have no idea what's about to happen... stops are in and my brain is out.

10year futures resistance

10year Treasury Futures 30min
The Treasury futures bulls are bumping up against the first level of potential resistance here at 133'055. Short term indicators are looking ripe for buying on S&P futures as they get closer to the 1400-1403 area. I'm watching to see if the bulls can produce a bounce off this short term setup in S&P futures.

Some burned and some thick and some nu ...

Gator's Chart of the Day: NUS
Somebody call Herb Greenberg and give him this website's address.  I'm sure he would want to chime in on this one.  Here's my take on Nu Skin Enterprises Inc.

It's not a scam.  They have products (quality ones from what I here from friends and relatives) and incredible margins with $385M in cash on the balance sheet.  That's 6.44/share and the forward P/E is under 12 with a PEG under 1.  The stock got whacked (I think bushwhacked) and it fell down to solid support at 40.  It was up Tuesday on heavier than average volume while the rest of the market was having a red candle day.

The Trade
It's buyable under 43 with a stop just under 40 so the risk is well under 8%.  I think it can trade back to the 200 day simple moving average (about 49 when it gets there) with a pause as it encounters the 50 day along the way.  My minimum target is 50 so it should give about 19%+ upside.  If you have some patience I think you can get your entry around 41.50 and that would be really nice with a tight stop.