Monday, May 18, 2009

Speaking of Goldman's "attitude" today, which someone in the chat room mentioned, it's time to nibble on FAZ, which mimics the Russell Financial 1000 in reverse, 3x. Option implied volatilities are beyond stratospheric, but we can try to get around this by calendar

Check out today's analysis of the Dollar Index (DXY), since it lies within easy distance of a bullish threshold on the hourly chart. If we're in for a period of strength in the dollar, it's going to catch a lot of leverage artistes with their pants down.

There's an unachieved target down at _____, but we should monitor the Dollar Index closely right now, since just a little more upside would generate a bullish impulse leg on the hourly chart that could delay or eventually negate the target. Specifically, if DXY pops above

Goldman's narrow failure to surpass an autumn peak at 142.00 on the last rally spike suggests that the bear rally's days are numbered. Getting short could prove tricky, however, since we want to avoid doing so if the stock still has one last lunge left, as it well may. One way we'll be able to judge for ourselves whether this is likely is by observing the price action on a modest decline to _____. That is the midpoint support of

A key rally target that has been four months in coming lies just above, at _____. If this number is achieved, slightly exceeding a very important peak at _____ recorded last September, that would be the most bullish price action we've seen on the daily chart since December. That is when

Our bullish benchmark is still _____, a tick above an unimposing but nonetheless important peak that was created April 1 on the way down. However, if a test of resistance at $1000 lies shortly ahead for the bull cycle begun in mid-April, the futures should

A minor downtrend from Friday's high pointed as low as _____, but as of 1 a.m. EDT sellers had not even achieved the Hidden Pivot midpoint, 874.00. This hinted of a firm opening Monday morning even though the futures were trading below last

Gloomy forecasts have generally held sway at the Committee for Monetary Research and Education's annual spring dinner, but this is the only time we can recall when there were no optimists on the dais bold enough to challenge a consensus now gloomier, probably, than at any time since the 1930s. Jim Grant's off-the-cuff talk was about as sunny as the evening's presentations got, and even he was unwilling to allow much more than a ray of hope that everything would somehow turn out all right. Bob Hoye, on the other hand, was unequivocally bearish:  "The chances of anyone fixing this mess," he told the crowd, "are literally zero." But the scariest talk of the night came from Bill Beach, director of the Heritage Foundation's Center for Data Analysis.  If you find today's economic news too depressing to imbibe, he said, "things are even darker than they seem." A self-described data junkie who loves to delve into the statistical facts behind the headlines, Beach says today's economic numbers are so appalling that he's "scared to death" to look at them.  What is most extraordinary about these times, he said, is that government at all levels has never been so willing to take on more debt. As a result, said Beach, our children will be paying back interest and principal for many, many years to come. How much do we owe?  Beach asked one person in the room to stand up.  That one person -- one among a hundred in the banquet room of New York City's Union League Club that night - could be said to represent the $182 billion required to bail out just one insurer, AIG. But if you add in the expenses the federal government will incur maintaining Social Security, Medicare and Medicaid over the next 20 years, you'd