May 2009

Index futures were too coy to call early Thursday morning, down just one tick and seemingly taunting sellers to push their luck by trying for four negative days in a row. (Note: On one of those days the loss was minuscule.)  My gut feeling is that stocks will open flat, trend moderately lower in the first hour, and then accelerate to the downside.

We continue to hold a modest short position, a September 270 put purchased a while back for 8.00. The position is no longer tied to any technical rationale, but rather to my gut feeling that the rally in this stock since we acquired the put has been seriously misguided (much like the rally in Microsoft, a stock in which we also hold a small short position). Yesterday's $12 decline was therefore a breath of fresh air, but

We've been tracking and forecasting the bonds higher since last Friday, when they turned from a low near an important Hidden Pivot support at 119^10. Now, having exceeded the first rally target subsequently given,

The Hidden Pivot at _____ was a logical place for yesterday's rally to top, so we shouldn't be overly optimistic coming in this morning, since Thursday's spiky high at 931.40 missed our number by

The futures did a little jig at 880.00 to create a bottom near the end of Wednesday's session, but a Hidden Pivot support just below there at _____ is nonetheless worth bottom-fishing if you are a night owl looking for something to keep you awake. An ____ stop-loss is appropriate, implying

Did the bear rally breathe its last with yesterday’s sharp reversal? We shall see. But we hesitate to call the hubris of the last ten weeks a sucker’s rally, since we do not personally know anyone who did not hate and revile it every step of the way.  A “bull trap” is what the rally will come to be called if stocks now fall in the weeks and months ahead, since many who eagerly bought into it will drown as the bullish tide recedes. However, since March 6, when the rally commenced on news that Citi had actually made money, it is bears who have been trapped. It could be said in their defense that trying to pick a top in the current economic environment is an unavoidable temptation, especially with the news media conjuring up a picture of hope and recovery that any fool could tell you is a mirage.     The reporters who write these stories need only chat with their neighbors to find out what is really going on. Instead, they dutifully quote Ben Bernanke blathering about how the recession “should end” later this year. We haven’t seen any details concerning how this might occur, but the Fed chairman himself has cited the stock market’s rise as the most convincing evidence that it will. A supposed student of history, Helicopter Ben could probably benefit from poring over some stock charts from the 1930s, since the two very powerful rallies that occurred during that decade no more signaled recovery than Hitler’s invasion of Poland signaled stability for Europe.   The Hangman Cometh   In the publicly accessible Rick’s Picks forum, one technician who identified himself as “Jay” saw conclusive signs of a major reversal: “There are pretty good technical indications that the recent sucker rally topped this morning,”

The Gold Bugs Index appears to be on the threshold of a bullish breakout on the weekly chart, and so I've provided specific benchmarks in today's tout that provide some key details omitted from my commentary.

I'll reiterate a potentially important target posted the other day in the chat room: _____. That's a Hidden Pivot, and it is derived from the coordinates shown in the chart. The pattern has several alternative starting points that

Goldman has come within 44 cents of a key peak at 142.00 recorded early last October on the way down. If that number were to be surpassed by even a penny, it would create a fresh bullish