Monday, November 17, 2008

No Honeymoon As Bailout Looms

By: Rick Ackerman – Posted in: Current Touts

Whatever illusions Americans may have about prospects for Change under Obama, they are about to be shattered by a Congressional bailout for U.S. automakers. Politics-as-usual all but guarantees that Washington will wind up throwing quite a bit more good money after bad -- not so much rescuing the car makers as postponing their day of reckoning for yet another six months, or perhaps a year or two at most. Democrats will vote overwhelmingly for the bailout, and Republicans will mostly oppose it. But in the end, General Motors, the squeakiest wheel among Detroit’s Big Three, will prevail with the argument that if Big Government does not pony up $25 billion pronto, countless jobs will be lost, along with any hope that GM, Ford and Chrysler will ever return to health. We’re all for fairy tale endings, but we doubt that many Americans are convinced that another $25 billion, or even a $100 billion, could turn the U.S. auto business around. Whatever the sums being tossed around, they pale in comparison to the expense not only of retooling factories and paring down the work force to perhaps a third of its current size, but of re-gearing the U.S. economy so that gas-guzzling, three-ton SUVs are no longer literally what makes America run. The automakers are implicitly promising that $50 billion would buy a radical shift in the way cars are designed and built. In fact, there can be no Manhattan Project for the automobile, since it’s not even clear what the goal of such a project would be. Are hydrogen fuel cells the answer? Electric cars based on a battery technology yet to be invented? Ultra light hybrids that would be great for commuting but lousy for a family ski weekend? No single answer is likely to suffice, and that is

December Gold (737.30)

By: Rick Ackerman – Posted in: Current Touts Free Rick's Picks

It's been nearly two months since Comex Gold generated any promising impulse legs on the hourly chart. Instead, gold's bullish thrusts have been fleeting, with nary a hint of follow-through. We'd be mildly encouraged by a pop this week to 782.30, a tick above a small but crucial peak etched on the way down on October 21. But if it doesn't come, the 628.10 target broached here earlier will continue to retain its magnetic allure. More immediately, a midpoint Hidden Pivot support at 718.60 looks like the best place to try bottom-fishing with a tight stop-loss. Please note, however, that a decisive breach of the support would hint of further weakness over the near term to as low as 683.30.

December Silver (9.580)

By: Rick Ackerman – Posted in: Current Touts Free Rick's Picks

Assuming nothing dramatic occurs today, a Hidden Pivot support at 9.150 could make a logical spot to try bottom-fishing with a stop-loss as tight as 3-4 ticks. Alternatively, a print a 9.995 would suggest the short-term picture is brightening. Still more encouraging would be a two-day close above 10.850, the midpoint resistance of the uptrend begun from 8.515 (a one-off 'A') on October 28. _______ UPDATE: The futures bottomed at 9.210 before rallying meekly. Nothing was done on the trade.

E-Mini S&P (851.50)

By: Rick Ackerman – Posted in: Current Touts Free Rick's Picks

The futures were easing lower Sunday night, but in that conspiratorially humdrum way that tells us not only that DaBoyz are not nervous, but that they are intent on accumulating shares for a squeeze play overnight or on the opening. However this carny game plays out, we'd be buyers at only one price, 766.50. That's the 'D' target of the pattern shown, and about as promising a Hidden Pivot as a trader could ask for if it completes by Wednesday or Thursday. More immediately, action at the 887.50 midpoint looks distributive, suggesting that a short-squeeze tonight or Monday morning is to be faded rather than feared. Whatever happens, we'll use 766.50 as a minimum downside target for the time being.