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COMMENTARY for Wednesday
TODAY'S ACTION for Wednesday
Rick's Picks for Wednesday
I try not to sugar-coat the outlook for Gold each day, but we should all have grown weary by now of looking for glimmers of hope in each and every bullish impulse leg that occurs on the 15-minute chart. Yes, I am still bullish on the long-term picture, and I do think Gold will make a run for $1000 when the stock market’s stench-ridden bear rally is in its grave. But we’ll save for the chat room whatever good news arrives each day on the lesser charts, accepting the fact that nothing of significance is happening unless the June futures push past peaks at 919.70 and 935.80 without stopping to catch their breath. I’ve shown where these peaks lie several times but do so once more so that the picture is etched into your minds.
We could be certain that the pounding the futures were receiving Tuesday night was just a bullish shakedown perpetrated by DaBoyz, were it not for the fact that the selloff was preceded by an intraday high that fell fully six points shy of an easy Hidden Pivot target. This warrants caution, and our short-term outlook would turn outright bearish if the selling were to go just a bit farther, surpassing an 889.00 low on the hourly chart that was recorded on the way up two days ago. This is all shown in the accompanying chart. _______ UPDATE (9:58 a.m.): The futures went no lower overnight than 891.00, revealing the selloff to be just a routine shakedown by DaBoyz in thin trading. The obligatory short squeeze they engineered on the opening was impulsive, so look for them to come back to the table for seconds. Minimum potential will be to 917.75.
We hold four Sep 84-May 84 calendar spreads for 3.45 and a September 76 put for 1.49. The May calls that we are short are showing surprising strength, so that we have only a small paper gain on the spread that is more than offset by the loss on the put. However, there is nearly $600 of theoretical profit potential between now and next Friday if DIA is trading around 84 at that time, so we’ll simply sit with the position for now. To simplify the accounting, we’ll impute a total loss on the put to our spread price, raising its cost basis to 3.82.
Google is stealing up on a midpoint resistance at 407.78 breach could signal more upside over the near term to as high as 439.66. That Hidden Pivot can be shorted with a stop-loss as tight as 22 cents, but don’t attempt it if the stock initially gets within 20 cents of the target and then drops back more than 30 cents. Officially, we’ll buy a September 270 put if and when 407.78 is approached within ten cents. We already hold one Sep 270 put for $8. ______ UPDATE (9:52 a.m.): Glug-glug-gluggle opened just above my target, but it didn’t stay up there long enough for us to buy any puts. If you shorted stock on the opening, cover now for a quick profit. If you’re plan was to buy the puts, follow the instructions as given originally.
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INTRADAY TRADING NOTES for Wednesday
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This Just In... for Wednesday
Slamming the barn door shut after all the horses have escaped, the Federal Government has put the screws to the cozy arrangement that until a week ago obtained between lenders and appraisers. The following comes from my Realtor, Scott Young:
“The latest financial news to affect lenders, realtors, appraisers and ultimately consumers is the implementation of the Home Valuation Code of Conduct. Known as the HVCC, this rule was implemented May 1st 2009 and requires that all lenders and brokers use an appraiser from an Appraisal Management Company.
“This ruling is of the utmost concern for it changes the entire appraisal process. Lenders and brokers no longer have a choice in who they get to use as an appraiser, and there can be no contact between appraiser and broker before a physical appraisal is given. Appraisal Management Companies will now be taking a portion of the cost of the appraisal, which means appraisers are now getting paid a portion of what they were paid before, for the same work, resulting in high quality appraisers simply leaving the industry. The AMC’s choose the appraiser, and the appraiser could be from a neighboring city. That’s tough for sensitive markets like Boulder where different neighborhood pockets get very different values, and knowing your neighborhood is very important in producing the best appraisal.
“The HVCC was originally created to help stop banks from pressuring appraisers into inflating home values, but the reality is this rule is hurting all parties in the mortgage and housing industry. Ultimately, it’s the homeowner that suffers the most. It’s the homeowner that pays for the appraisal and it’s their home that’s under scrutiny. I think everyone would agree that homeowners would like their home to be valued by the most qualified appraisers, appraisers who are paid a fair wage and have the knowledge and experience to back up their values
“We have included an article below that gives a more detailed look into the HVCC ruling as well as links to organizations that are trying to put a moratorium on this ruling for 12 months while a better solution can be worked out. Please call your representatives in Congress today, as the HVCC comes to a full vote on Thursday, May 7th. We would appreciate any forwarding of this message to other realtors, mortgage brokers and consumers, as many in the industry aren’t aware of this ruling, and it will have a truly negative effect on consumers, as well as mortgage brokers, realtors and appraisers.”
Hidden Pivot Webinar & Tutorials
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Dollar Hovering at Cliff’s Edge
by Rick Ackerman on May 6, 2009 2:52 am GMT · 6 comments
Is the dollar about to collapse? We’ll know soon enough, since the U.S. Dollar Index fell yesterday to within a hair of an important correction target that we flagged for subscribers a couple of weeks ago. The actual target was 83.45, a Hidden Pivot support that lay just 0.05 points beneath yesterday’s actual low. We’d expected a bounce from our target, and it came in the form of a sharp rally of 0.81 points off the intraday low at 83.50. However, the surge would need to continue to at least 85.29 by Wednesday’s close to confirm a bullish » Read the full article