We weren’t trying to be unkind when we wrote here yesterday that Obama’s $825 billion stimulus plan didn’t have a prayer of succeeding. We wish our new President all possible success, really, but our good feelings stop short of believing that he can cure a credit bust with galactic new quantities of public borrowing. Yeah, right, Keynes said it could be done. But with all the critical scrutiny that Keynes’ misconceived ideas have been attracting lately, even neo-Fabian hacks like Paul Krugman may eventually be forced to concede that fiscal stimulus failed miserably in its goal of lifting the U.S. from the economic mire of the 1930s. Another crackpot notion about that era that long ago wilted under the light of truth is that the Fed turned the 1929 Crash into a Depression by tightening credit. The statistical record says the opposite is true – that the Fed eased frantically, to no avail. The only popular theory about the causes of the crash that still holds up is that the Smoot-Hawley tariff was the straw that broke the camel’s back. For sure. But is the lesson still so pungent that a Democratic Congress will champion free trade, as it absolutely must? We shall see. But one is hardly reassured by the Cyclopean dimensions of Obama’s stimulus sausage. In purely economic terms, the effort is doomed simply because it will borrow vast sums of capital for purposes that cannot possibly improve the economy other than very superficially. Just how superficially beggars belief. We had initially taken Obama at his word, that there was plenty of stimulus in this bill for business and capital investment. In fact, to describe this mephitic heap of political rejectamenta as a legislative sausage is to slander the meat-packing industry. The stimulus is
Thursday, January 29, 2009
NEM Newmont Mining (38.67)
– Posted in: Current Touts Free Rick's PicksAs long as Newmont is getting undeservedly trashed, let's attempt some bargain hunting if the selling intensifies. The nearest Hidden Pivot worth bottom-fishing lies at 36.40, so I'll recommend bidding 36.44 for 200 shares, good through Friday. _______ UPDATE: Continue to bid for stock. Newmont got hit hard on the opening bar, but the fake-out low at 37.02 -- quickly recovered -- was not sufficiently overdone to get our order filled.
E-Mini S&P (855.75)
– Posted in: Current Touts Free Rick's PicksThe futures turned vicious after exceeding by a couple of points an 873.75 target that had served us well this week. Night owls can attempt bottom-fishing nonetheless, since there's an enticing midpoint support at 866.25 associated with the pattern shown in the chart. This one warrants a stop-loss no wider than 2-3 ticks, but if it's hit expect the downtrend to continue to 857.75. _______ UPDATE (1:23 a.m.): The futures have bounced slightly from a so-far low at 865.25. I'll treat the order as having filled and survived, since some of you may wisely have second-guessed my extremely tight stop-loss. Assuming, now, an 864.75 stop, you should be shooting for at least 871.00 before you implement a trailing stop or take a partial profit on a multilot position. Actual potential, short-term, would be 876.00, a Hidden Pivot resistance. _______ FURTHER UDPATE: In their last-gasp rally of the night the futures made it no higher than 869.00, triggering our stop, and a loss of about $75, on the way down. Weakness spilled over into the opening, sending the futures to a so-far low of 850.50. This was impulsive on the hourly chart, and so we should expct more weakness.
April Gold (886.00)
– Posted in: Current Touts Free Rick's PicksA Hidden Pivot support at 867.20 is currently my worst-case target for the correction begun Monday from $918. You can try bottom-fishing there with a stop-loss as tight as 866.40. Alternatively, a thrust today that touches 899.70 would signal a reversal and no more pain for a while. Please note that the big-picture target at 952.30 given here earlier will remain valid as long 803.60 is not exceeded to the downside.
GDX Gold Miners ETF (33.87)
– Posted in: Current Touts Free Rick's PicksRaise the bid to 32.03, but stick to a rigid stop-loss at 31.94, since, if yesterday's chop turns out to have been distribution, it augurs more than a further decline of just 30 or so cents. Alternatively, if a bullish turn is coming, it will be telegraphed by a thrust touching 33.85 this morning. A shallow pullback from just above that number would be buyable using a minor-trend abc pattern. _______ UPDATE: Our 32.03 bid and very tight stop-loss caught the low (32.00) precisely and painlessly. Assuming 400 shares bought, I'll recommend taking profits on half the position now, hitting the 33.86 bid. That will leave us with 200 shares whose adjusted cost basis is 31.12.
