We'll know soon enough whether Obama's presidency will begin with a soak-the-rich belly-flop on tax policy. He's said up till now that he would not even consider a tax hike, given the deathly state of the economy. But if that is so, what were the usual suspects doing on Fox yesterday, telling Neil Cavuto that Obama has not really made up his mind? Nancy Pelosi was quoted as saying just that, and it could not have been just a casual remark. Two other dim Congressional lefties appeared on the show, and both had the chutzpah to argue that more taxes, if paid only by the "rich," would be better for us all. Cavuto, the best hardball interviewer in television, would have none of this. He pointed out that if taxes on the top two brackets were jacked up to their old levels under Clinton, it would raise only an additional $300 billion. This compares with proposed new outlays of nearly $2 trillion, noted Cavuto. Whose taxes would cover the shortfall, he asked? The larger problem is Congressional Democrats' apparent failure to distinguish between real money and play money. When you talk about raising taxes to cover the deficit, you are talking about taking real money out of real workers' pockets. That is far different from enacting huge stimulus packages and bailouts that everyone knows we will never be able to pay for anyway - at least, not with real money. Why saddle our most productive workers with back-breaking new taxes to finance outlays that exceed by tenfold our ability to pay for them? We've given a dozen reasons why all stock market rallies these days are just fool's gold. But if Obama doesn't get this one right the weight of despair is going to crush Wall Street, and soon. ***
Friday, January 23, 2009
GOOG Google Inc (323.79)
– Posted in: Current Touts Free Rick's PicksWith Google earnings due out, I thought I'd take a crack at targeting whatever lunatic action greets the news. My number is 318.08, a Hidden Pivot whose provenance is shown in the chart. This target is not one that I would use to intercept aggressively, but if you do attempt to get short, an initial stop-loss no wider than 26 cents is suggested. _______ UPDATE: Lunatic action has short-squeezed Gluggle to a so-far high at 323.10, but 332.32 was possible if these bozos blow out the 323.66 midpoint.
Dollar Index (86.40)
– Posted in: Current Touts Free Rick's PicksThe Dollar Index was pussyfooting with the 85.47 midpoint support shown in the chart, but if it breaks down, look for the selloff to bring DXY down to at least 84.84. This would of course be very bullish for bullion, which has managed to move higher lately even with the dollar rallying. _______ UPDATE: The Dollar Index went postal after the above analysis was published. It was trading around 86.46 at 4 a.m. EST, presumably bound for at least 86.83. Anything above that would indicate more upside to at least 87.25.
February Gold (902.20)
– Posted in: Current Touts Free Rick's PicksThe futures appear to be wedging for a thrust to as high as 952.30, but first they'll need to beat a midpoint resistance at 876.90 into bloody submission. More immediately, much as I'd love to be able to flag a Hidden Pivot support that could be bottom-fished Thursday night, one at 853.60 that is available at this moment (i.e., 7:13 p.m. EST) is likely to be stale by the time you read this. If not, and it's still viable, an 852.90 stop-loss would be appropriate. A chart alongside shows the target. _______ UPDATE: The futures made their low overnight at 852.50(!) before rocketing spectacularly higher. The valuable lesson here is that, if you're looking for a $100 explosion in Gold, don't try to save nickels and dimes trying to bottom-fish the low with some chintzy, 70-cent stop-loss.
E-Mini S&P (814.00)
– Posted in: Current Touts Free Rick's PicksThere is absolutely nothing to like about this market, but bears shouldn't give up hope that it will do the right thing via a thousand-point decline one of these days. Just don't expect trumpets to sound beforehand, tipping you off in plenty of time so that you can comfortably get short and enjoy the show. The 675.50 target given here earlier is still where I think this cinder block is headed, and the last-ditch support is still 809.00, the midpoint pivot of the larger pattern. Night owls please note: On the hourly chart, the futures look like they want to run up to 851.00. That's a Hidden Pivot, and it is short-able if the pattern that produced it does not get too badly bent out of shape Thursday night. _______ UPDATE As of 3:30 a.m. EST the futures were diving, having apexed at 826.75 -- precisely where they were trading when the above analysis was published. The downtrend promised to reach 809.25, at least, but bottom-fishing there is not recommended, since the pivot is closely concident with the 807.50 bottom of Thursday's short-squeeze.
