Wednesday, March 18, 2009

We'll heed the subtle but potentially wicked bullish impulse leg created by the E-Mini S&P at the tail end of yesterday's regular session. Please note as well that if Crude hasn't topped for at least the short-term, a 10 percent rally could be brewing.

The 49.62 target (if memory serves) disseminated in the chat room yesterday morning was exceeded by 20 cents -- not quite enough for us to infer with confidence that the rally has breathed its last. The target stands to be significant from a short-term perspective, but if it is brushed aside within the next two days, look for the rally to continue to at least

Anglogold, mentioned in today's commentary, looks all but certain to reach a minimum 37.62 over the near term. That's an 8.6% rally from here, and it would be a good place for long-term bulls to

After playing footsies with our rally targets for the last two days the futures caught a short-squeeze gust in the final minutes of yesterday's session, stealing a few more points to create a 777.00 high. This created an impulse leg on the hourly chart that is subtle (see chart) but which should be understood by bears

In thin trading Tuesday night, by breaching the 913.90 Hidden Pivot midpoint of the pattern shown in the chart, the April contract has tripped a signal implying a fall to

A 6.00 bid for two July 115-April 115 call spreads would have come all to easily the other day, so I'll track and record the position for your further guidance. We were sleazed out of the further short sale of an additional April 115 call yesterday for 2.60, since someone stepped in front of us with an offer at 2.56, the high price of the day. No matter; we'll try again, greedily raising the price to 3.80. If successful

Since stocks started rallying a week ago, gold and silver futures have held up magnificently against a tide of silliness that has swelled on faintly improving perceptions of the economy. We should view the price of gold, above all, as a reality check on the global Carnivale, such as it is, but there will always be times when bullion's cold, stern eye will be temporarily distracted by the irresistible hubris of a bear rally.  Such as now. An unavoidable side effect of the current mini-mania for stocks has been the wild thrashing of precious metal quotes -- or more recently, the tedious flatlining of quotes until some gratuitous spasm erupts for an hour or so just to scramble the players.  But such histrionics make little sense to serious investors when bullion probes below $900; and so, with no rationale for going much lower, but  no reason yet to blow the $1000 barrier to smithereens, gold will continue to seethe, waiting for the tide of silliness to recede. And no one sounds sillier these days than our Fed Chairman, Helicopter Ben, who despite his nickname has tried everything except dropping $100 bills from the sky.  With his factually empty talk about an end to the "recession" later in the year and a gradual recovery in 2010, he has begun to sound almost like Kudlow, CNBC's all-purpose shill for anything that might cause the benighted Hopeful to turn on, tune in and permanently suspend disbelief. What will it take  to send Bernanke back into his bomb shelter?  We can see a few inevitabilities that might do the trick: a complete meltdown of the global insurance business; the collapse of New York City real estate; and/or yet another swan dive by the Dow Industrials. In the meantime, it will remain largely  unappreciated by Bernanke, and by nearly everyone else, that it is not the recent emergence of hopefulness that has caused stocks to rise, but rather the reverse -- i.e., a purely technical rally has caused false hopes to