November 26th, 2014
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Weekly Commentary

The Plunge Protection Team has been hard at work lately, although not in the way some traders might imagine. The very name evokes the shadowy activities of a group of Svengalis believed to control the stock market through timely interventions in such key trading vehicles as the S&P 500 futures. In fact, the PPT, more blandly known as the President’s Working Group on Financial Markets, was commissioned under President Reagan after the 1987 Crash to prevent meltdowns. These day, however, nearly six years into a ferocious bull market that seldom pauses for breath, one might question why a Plunge Protection Team is needed at all. The answer is that the PPT, far from defending against selling panics, has been furtively on the offensive, triggering short-squeeze panics that spike shares to new record highs at every opportunity. Usually, the news catalyzing these rallies hits the tickertape on a Friday, when the effects of a short-covering binge are apt to be most pronounced. It is hardly a stretch to imagine that these engineered events have been scheduled and coordinated by the PPT, working in concert with the central banks. » Read the full article


TODAY'S ACTION for Wednesday

Turkey Day Doings…

by Rick Ackerman on November 26, 2014 4:56 am GMT · 0 comments

Happy Thanksgiving to you all!  I’ll be spending the afternoon with my in-laws, shooting pool and watching 49ers v. Seahawks on the biggest TV screen that could conceivably fit on a basement wall. The normal routine will obtain on Wednesday, including the weekly tutorial session at noon. If there’s any activity in the chat room on Friday, I’ll hang with you for a while and possibly hold an ‘impromptu’ session that will help us hit the ground running next week.


Rick's Picks for Wednesday
$ = Actionable Advice + = Open Position
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All Picks By Issue:

$DXY – NYBOT Dollar Index (Last:87.85)

by Rick Ackerman on November 26, 2014 3:40 am GMT

I remain very bullish on the dollar and expect it to achieve the 90.00 target shown by early 2015. However, it is clearly winded after the steep run-up since July, resulting in more frequent consolidations to develop thrust for each successive new high. Another factor contributing to the rally’s timidity of late is the implied resistance of two key peaks made, respectively, at 88.71 (June 2010) and 89.62 (March 2009).  A true bull-market breakout will require a push past these peaks, and although that outcome seems likely, it could take a while. However, if DXY were to effortlessly power past the peaks within the next 4-6 weeks, it would imply there’s still enormous power in reserve to drive the bull market significantly higher.

ECZ14 – December Euro (Last:1.2477)

by Rick Ackerman on November 26, 2014 4:10 am GMT

The analysis presented elsewhere on this page for the Dollar Index is very bullish, but is it corroborated by an equally bearish picture in the euro? The answer is yes, as can be inferred from the ponderous look of the long-term chart (see inset).  How far could the euro fall? In the chat room Tuesday, I broached the possibility that it could eventually go to parity with the dollar, a level not seen since 2002. Strictly speaking however, and based on the long-term chart, I can forecast no worse that 1.08. That would represent a 13% fall from current levels and a 32% decline from the all-time high of 1.60 achieved in 2008. That number is a Hidden Pivot support, and although a bounce there would be likely, there are no guarantees that the euro would not take yet another leg down. Bottom line: euro/dollar parity is possible, but even if it is not achieved the euro still has much farther to fall.

$AAPL – Apple Computer (Last:118.63)

by Rick Ackerman on November 25, 2014 4:10 am GMT

AAPL has been on a rampage since April, gaining hundreds of billions of dollars in valuation with a run-up of more than 60%.  How long can a stock that is already the most valuable in the world continue to rise vertically?  Probably not forever, it can be safely inferred. It’s not as though Apple has no competitors. Indeed, the day is probably not far off when Chinese manufacturers are churning out smart phones that will do just about everything an iPhone can do, but for one tenth the price. Samsung is having troubles of its own coping with brutal competition in mobile devices — but then again, the company does not enjoy Apple’s cult status, nor the kind of caché among customers that has inspired some of them to have the Apple logo tattooed on their butts.

From a technical standpoint the stock is closing on a very compelling target at 125.87 that comes from the weekly chart (see inset). I expect this Hidden Pivot to show stopping power that will be compounded by the 126.87 target of a lesser rally pattern that is clearly discernible on the hourly chart. The implied $7+ rally is reason enough to try to get long here if you are not already on board. However, it is also reason to take profits, do covered writes against stock held in a portfolio; or more aggressively, to reverse long positions and get short. In any case, I’ll use the 126.37 midpoint of the targeted range as my minimum upside objective for the near term, to serve you in any way that suits your goals.

$JYZ14 – December Yen (Last:0.8481)

by Rick Ackerman on November 24, 2014 8:00 am GMT

The chart shown has implications that may or may not prevent Japan from getting sucked into a deflationary black hole. However, the chart is quite clear on the question of whether BOJ will be successful in its longstanding goal of trashing the yen. (Answer: Yes, very.) The small rally in early October from around 0.9001 validates the pattern itself, and the decisive progress beneath that level since implies that the D target at 0.7332 is likely to be reached. This will obviously benefit Japanese exporters, but it will also put more pressure on manufacturers in the U.S. and elsewhere that compete with them. Traders should position from the short side until the target is reached, but be alert for a rally back up to the red line, since that would set up a ‘mechanical’ short to the target using a 0.9418 stop-loss. That’s far more than we would ordinarily risk, but you could cut it down to size by using the ‘camouflage’ technique. When appropriate, ask in the chat room if you’re uncertain about how to do this.

$ESZ14 – December E-Mini S&P (Last:2070.00)

by Rick Ackerman on November 24, 2014 7:09 am GMT

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$GDXJ – Junior Gold Miner ETF (Last:28.81)

by Rick Ackerman on November 20, 2014 6:17 am GMT

GDXJ’s ups and downs are in ‘dueling’ mode at the moment, alternating between bullish and bearish feints. It was mildly bullish when the stock slightly exceeded the 129.30 target shown on Tuesday. However, yesterday’s slide also exceeded a Hidden Pivot target — in this case a hidden support at 27.21.  Taken together, the action suggests that this vehicle will spend the next few days marking time in the range 28-29. The picture would brighten on a thrust exceeding 29.20 on Thursday, since that would imply more upside to at least 31.24. Alternatively, a continuation of the downtrend past 25.67 would have equally bearish implications. ______ UPDATE (November 24, 1:54 a.m. EST): GDXJ finally budged by moving above 29.28, albeit a day later than we might have preferred.  Now, if the rally holds above Friday’s 28.42 low, a modest target at 30.43 will be in play — would become an odds-on bet if and when this vehicle pushes decisively above the 29.43 midpoint resistance.

USZ14 – December T-Bonds (Last:141^22)

by Rick Ackerman on November 17, 2014 12:06 am GMT

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$+DIA – Dow Industrials ETF (Last:177.80)

by Rick Ackerman on November 12, 2014 4:20 am GMT

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$IDAH – Idaho North Resources (Last:0.1600)

by Rick Ackerman on November 5, 2014 12:01 am GMT

Idaho North [OTC symbol: IDAH] offers investors a potentially lucrative synergy between two very successful entrepreneurs.  CEO Mark Fralich started out as a reporter with the Associated Press News Service but went on to co-found Spoval Fiber Optics before moving into the exploration business with Mines Management, Consolidated Goldfields Corp. and some other natural resource companies. Like most executives in the exploration business, he is an aggressive risk-taker. But he is also an astute bettor, perhaps never moreso than in his choice of Thomas Callicrate to head up his technical team.

Callicrate is bottled lightning, a geologist who may know more about ore deposits in Nevada than anyone else in the world. I counted no fewer than 250 file cabinets in the barn-size work buildings that surround Callicrate’s spectacular home in Carson City. He seems to have committed every geological map in those cabinets to memory, and he can tell you exactly where each and every rock came from in the massive stone fireplace that dominates his living room and in his beautifully landscaped gardens.  The fact that he chose to affiliate with IDAH attests to his confidence in Fralich’s ability to exploit to-the-max whatever ore deposits the company is able to find.

From a technical standpoint, the company’s shares have not traded for long enough to offer a sound basis for prediction. The stock has fluctuated between 0.08 and 0.24 since being OTC-listed in November 2013. That said, it would be no worse than an even bet to hit 0.3000 a share, nearly double its current price, if it can push past the red line at 0.2150. That’s a Hidden Pivot midpoint resistance, and it will remain valid as a minimum upside target for the near term unless the stock falls below 0.1300 first.

For news concerning two separate option agreements that IDAH recently signed, click here for the Green Monster property in Nye County, and here for Coeur Mining’s Klondyke properties.

$+SNIPF – Snipp Interactive (Last:0.3310)

by Rick Ackerman on October 28, 2014 2:47 am GMT

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