Tuesday, April 21, 2009

My minimum dwnside projection for the near term is ____. That's a midpoint Hidden Pivot, but I wouldn't recommend bottom-fishing there since it comes off a continuous chart. A breach of that number would be bearish, a two-day close below

Implied volatilities have collapsed so badly that the September 270 put we hold for $8 can be bought for a bit less than that even though the stock is trading nearly $10 lower. My hunch is that option volatility will return once Google has had the opportunity to fall a further 50-70 points. We can wait, since our risk

Goldman should lead the way down if the bear is about to emerge from hibernation, as we suspect it is. It would take merely a breach of 112.50 today to turn the daily chart bearish, and a print below 112.22 to queer the 0.618 Fibonacci support associated with the most recent rally leg. Ordinarily I'd suggest trying to leverage the stock's fall by buying some long-dated, way out-of-the-money puts. However,

DaBoyz let the futures grope their way relentlessly lower yesterday in search of a bottom that never materialized. Now, judging from the extremely timid action Monday night, the pros are as nervous as the amateurs concerning what might ensue. The two possible scenarios on which nearly everyone is focused are 1) the bear rally begun on March 6 is over; or 2) a sharp break, one with perhaps 2-3 days remaining, will be recouped quickly as the bear rally returns in earnest. My hunch is that

Gold still looks buoyant after clawing its way higher yesterday, but the rally so far has not been particularly impressive. To avoid false hope or confusion, we'll use _____ today as a bullish trigger, since that's what it would take to turn the hourly chart positive.

For a few bracing hours yesterday, everything seemed right with the world: stocks were getting pounded, gold and silver were moving energetically higher, and crude oil was plummeting just as it should in a world that is sinking into the mire of recession-or-worse. It was a welcome change from the surreal, feel-good mood that has pervaded the bourses in the U.S. and elsewhere since early March. Even the Wall Street Journal deferred to reality with this dog-bites-man story atop the front page: Bank Lending Keeps Dropping.  Shocking, you say? Or should we merely feign outrage, as the Journal did when it wrote: "Political disquiet over banks' perceived lack of lending, as well as their spending on bonus and perks, has provoked skepticism about the administration's ability to revitalize the banking system."  While the skepticism is warranted, it's obvious the Journal doesn't understand what's going on. Like the Obama administration, the newspaper is concerned that the major banks, greedy and depraved as ever, have curtailed lending now that they've gotten their bailout money and paid out a hefty chunk of it in the form of bonuses. This is true, of course, but it only tells half the story. The other half is that consumers are simply not in a borrowing mood, to put it mildly, and that lower interest rates aren't going to change that.  Real Estate Epiphany There are two reasons for this, one of which has been widely acknowledged by the news media: We have all become obsessed with paying down debt. But the second reason is subtler and appears not to have been factored into monetary policy. It is the stark realization by most Americans that real estate values do not necessarily have to rise. Before this epiphany, many found it all too easy to borrow because their net