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COMMENTARY for Thursday
TODAY'S ACTION for Thursday
Rick's Picks for Thursday
A mini-wilding spree in the final half-hour of Wednesday’s session brought the futures back to within easy distance of the day’s highs, setting up a minor rally pattern in the process that points to 815.00, minimum. As of 7:15 p.m. EDT the rally had stalled precisely at the 810.25 midpoint, but any move through it later tonight could provide night owls with an opportunity to leverage the five points of upside that would presumably remain. _______ UPDATE (12:10 a.m. ): DaBoyz squeezed boldy on who-knows-what news, whipping and driving the futures as high as 823.25 so far tonight. This quasi-criminal opportunism is not likely to get much further than 830 or so overnight, since that’s where the would-be hijackers will run into some serious supply. But if they can merely maintain altitude till Thursday’s opening, that may suffice to leverage a fresh wave of panic at the bell. That would be good for a push, probably, to 843.75, a very short-able Hidden Pivot that would be equivalent to a Dow rally of 300 points.
Yesterday’s fleeting spike was constructive, since it poked slightly above the last fleeting spike, 934.70, recorded two days earlier. This refreshed the bull trend despite the selloff that followed, and it also put into play a 942.70 rally target for the near term. The midpoint resistance associated with that Hidden Pivot lies at 931.60, so any decisive move above it would offer evidence that the thrust is likely to reach the higher target, and soon. _______ UPDATE (9:56 a.m):The rally died at 931.80, two ticks above the pivot resistance identified above. Gold’s subsequent relapse seems likely to bring the June contract down to the 896.90 target given here earlier. _______ FURTHER UPDATE (12:16 P.M.): Hidden Pivots caught both the intraday high and low of today’s $30 swing within less than a dollar. The futures have now rallied $10 from a so-far bottom at 896.10.
Poised precisely at a midpoint resistance at 110.45, Goldman looks extremely likely to pop to exactly 120.34, and soon. However, it is too risky for me to suggest that you simply buy calls at-the-market on the bell, since prices are likely to be rigged and rapacious on the breakaway gap we might expect. We already hold two July 115-April 115 calendar spreads for 6.o0 that are quite profitable, and we are short an additional April 115 call for 3.80. Let’s reprice it down to 1.40, since that will impute the carrying cost of two April 90-85 put spreads to our cost basis, effectively writing them off. In addition, you should try to buy two July 120-April 120 calls spreads for 9.80 or less, contingent on the stock trading 110 or higher. The spread has the potential to widen out to 17.80 at April expiration, giving us low-risk protection to the upside. I’ve included a snapshot of an option calculator that shows the July 120 calls worth 17.77 on April 17 with the underlying stock trading at 120. This spread looks like a winner to me, and it will be well worth your while to try and put it on (or perhaps leg it on) at the price I have specified. _______ UPDATE (10:08 a.m.) : I’ll add two July 120-April 120 call spreads to our position, since they could have been bought without much difficulty for 9.80. With the stock currently trading for 114.46, the spread can still be bought for that price.
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Inflationists Fail to Explain ‘How’
by Rick Ackerman on April 2, 2009 12:01 am GMT · 32 comments
Yesterday’s challenge – explain how inflation will get off the launching pad in a deflating economy – went unanswered, although the topic itself provoked quite a response in the Rick’s Picks forum. The question was not rhetorical, since in order to produce inflation there has to be a mechanism for all of that printing press money inflationists keep blathering about to physically make its way into the consumer economy. Anyone who thinks massive fiscal spending alone can create inflation should read Hayek’s The Road to Serfdom, since the equally massive borrowing needed to finance a public works economy » Read the full article