Two entirely different strategies. More likely?
LGND merges (or aquires) the too be spun off royalty arm of Theravance (Royalty Management Co). Make a lot of sense given both have fresh royalty streams and close relationships with GSK. Also Royalty Management Co has yet to fully populate team nor explain fully their growth plan. Now that would be a great merger!
Anyone selling on this nonevent has not been paying attention. The FDA will not decide or report on NCE issue until after the AdComm.
By announcing tonight instead of next week, Management are heros to any longs who wisely also held protective puts or sold covered calls. Now the put buyers could be free to buy more equity .... after the wash period. Tax loss harvesting will eat $BBRY next quarter, but this one might be interesting wreckage to buy in December...likely in the $6 range.
We have no position.
If we get a $60..... heck...if we get a $55 print.... $AKAM will breaking out of a multiyear sym tri highs and running hard. And we would expect them to further raise their PT once nearing this range. Worth loves this chart.
And what's more, given traffic seasonality, 3Q is usually the worst of the year for $AKAM.... though the company's revs are now less seasonal than it was in years past.
I like the relative technicals over the last three days. SPY has lost all the FED pop (for now), but $AKAM is holding much of its move in a high base. We see a brief period of rest, with renewed run into and through the eom (window dressing) which will likely last till Oct 15th on, at which time we may get a pullback into earnings.
No position, as still doing dd, but technically this one is very dicey.
JCS sell-if confirming today. Next week we will also be on a Sell-if on the weeklies.
Getting out before earnings in early October? With the poor performance of Darden and other names in the sector, moving to the side might be the wise play.
We agree miners lead gold. But miners also have but in a bottom and are still holding and building on that support.
We have only recently reentered investments in the miner space. Sure, we might be early. But we don't think we are.
By the way, ANV is an example that proves gold is ready to rally. It is only an exploration co - not a producer. As such, its portfolio of projects were started and funded based on much higher expected prices of gold. Exploration co's FOLLOW the price of gold... Producers lead.
But the GDX is primarily producers, and weighted to those with the lowest cost of production. These are the companies that will survive and actually improve their competitive position if / when there is industry consolidation. If you wish to short ANV into oblivion, be my guest...even as it also seems to have bottomed back in June. But shorting a sector index in hopes it goes to zero? Not going to happen.
The bull market in gold was over more than a year ago. What we are seeing is the end of the bear market. The bull market died on reduced fear of crisis in europe. Now no one fears europe anymore. For now.
But none... zip... zero....nada... of Euro's problems have been fixed. Debt still massive, banks still weak, no EU QE (yet), massive unemployment, bad economies in the periphery. The can was kicked down the road and until after the German elections. Mark my works.... europe is still simmering. There will be more riots and more strife. It's just a matter of time.
Look at the dollar.... $UUP. Just like Gold bottomed in June, the dollar also broke its chart in July with bearish divergence and double top in July. The Fed move broke its mid point nadir. So unless we get a close over $21.84, the dollar is at risk of a classic swoon with a technical price target of $20.70 the 2011 lows. Don't need to tell you that such a major fall in the buck is great news for gold longs.... and miners too.
Yes, gold was in a bear market that started in late 2011. Luckily we didn't own any. But the swoon put in a putative base at the 50% retrace in June 2013 on the GLD (the paper now really drives the value of the physical). We had a bullish divergence on a number of indicators in that swoon, including volume.
Granted it is counter trend, but since June, the move has been to buy the dips in gold.
And note, even with the dramatic two day selloff (into OPEX... suspect) we are still positive on this tick on the weekly chart in what looks to be at the start of a new impulse to the $1475 - $1500 mark.
good catch. Classic swing trade signal, but usually has some lag.
Why this works is from this point on, the % delta of PPS off the 52wk high reduces (given the prior highs work off the calendar). Also, most of the peak and swing retrace is worked out of the MA(100)d, so typically it starts to flatten, which is exactly what we are seeing now. As long a PPS remains in this range, soon the MA(200)d will flatten as well, and the MAs will re-converge, signalling the potential for a new rally.
I understand you are talking your book but central banks will not allow a collapse in the price of gold. It is a major input in inflation metrics, and these central banks all want to increase inflation and avoid disinflation. Nor can they afford to allow interest rates to get out of hand as they are all in debt and continued spike in rates will risks the economy which is now so dependent on housing and other projects using low interest loans.
Furthermore, in the gld mining sector, while discovery costs continue to rise (given shortage of proven reserves) production costs are relatively stable. There is no shortage of labor or equipment. And even fuel costs have moderated - especially in areas like NA with access to fracked fuels.
As for your H&S pattern on the /GC, sorry. The Wednesday spike doesn't come close to fit the classic definition of a right shoulder. It is a jab. It well exceeded your putative left shoulder (7/23), and even recaptured a new MA (the 100 day). Nor has it even yet materially broken below the prior resistance line of your putative left shoulder, which now seems to be acting as support.
Now you might have a case if PPS on /GC fell to say 1280 to 1285... but that would only establish the end of a putative head and the neck line, and likely lead to a retrace to 1350 to establish a rt shoulder.
So bottom line, either this is just a bullish jab that will be retest post OPEX (my read of the technicals) or still in the midst of developing a potential bearish H&S (your read).... but in both cases, $1350 range is likely to be retested.
OPEX week always does funny things to spikes. And more often than not, MM are option sellers, who can load up a book short term with equity positions to offset option positions, then reallocate after expiry. As such, it really is no surprise to see PPS suppression into today's option expiry. Would not be surprised to see $GDX get pinned to $26.50 or even slightly below the 50% fib retrace level at $26.80.
Also note that $GLD has a Max Pain of $130. As such, with this spike below that mark, It is highly likely that $GLD has seen the lows for the day, catching some support at the Sept 12 prior resistance mark.
The real tell for the future direction of $GLD and $GDX will come by mid week next week. But in prep for what we expect to be a post option rally, we have now added back all gold related positions that have been stopped out since the FED spike.
If already long CMG, but concerned of the developing double top, you may consider selling covered calls. Selling the December $415.00 call will produce a new covered call with a target return of 4.1 %. Based on recent data, and reduce your break even to below $400, giving one some 6.5 % downside protection, while giving you an assigned return of ~4% in just 93 days if CMG is higher than $415.00 on 12/21/2013. This is an annualized return rate of ~16 %. Not too shabby.
A classic fib retrace and you call it a plunge? Still above the MA(50)(100)d . Looks more like the start of a bull flag to me. GDX should rip again on the $GLD breakout.
$GLD in now well above both the rising MA(50)d and flattening MA(100)d, and the MA(50)d is gearing up to upcross the MA(100)d, which should arrest its fall and convert it to a rise as well, as it starts to work off the June lows. (Already the EMA(100)d has turned positive.) It has also recaptured the 23.6% fib retrace ($131.48)
With this upcross, $GLD will be free to test $135.46 (the Sept open), the prior swing high at $137.55 and the 38.2% fiv retrace at $141.87 and then the falling MA(200)d (now at ~$143.28.)
$GLD put in a putative bottom on June 28th, when it tagged the classic 50% range retrace, and has been in a classic reversal ever since. 3 higher swing highs (7/1, 7/23, and 8/27) and three higher swing lows (7/5, 8/16, 9/18). The fight now is over is this just a classic Elliot wave bear pullback, or the start of a new bullish run.
Yesterday was a classic gap fill run, so today's rest (an indecisive doji so far) is expected and actually desired for the GLD bulls, as it should help put in another rung of support. But any close above Wednesday's close ($132) will start to drive further short covering and more true buying in the GLD.
The larger picture is that FED and developed market central banks around the world all actually wants low interest rates but some modest inflation. So expect them to conduct policy that support all classic metrics for inflation...such as gold. But much of the dev market policy will result in more emerging market inflation and then conflict. Meanwhile, the price fall has again started to hurt production.
Bottom line? Don't fight the FED. Or Japan for that matter. And soon as the German elections are over this month, expect to see a more dovish EU as well. Developed countries around the world have 1) too much debt, and 2) graying populations. As such, they all want to inflate their way out of there obligations and prop up asset prices so don't stall the economy.