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COMMENTARY for Tuesday
TODAY'S ACTION for Tuesday
PICK OF THE DAY for Tuesday
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Rick's Picks for Tuesday
The futures looked like they were consolidating yesterday for a push up to 1024.25. Midpoint resistance is at 1011.25, but there is also a minor peak recorded there Friday on the way down. My hunch is that any rally capable of exceeding this resistance will not provide much camouflage for entering with the trend, but there’s where I’d look to do so. _______ UPDATE (11:17 a.m. EDT): The futures climbed to exactly 1010.75 before diving in mock despair. I hope you showed more imagination than I, perhaps finding reason to get short at the high rather than taking for granted, as I did, that the resistance existed only to be conquered.
I mentioned a downside target at 933.80 in an update yesterday, but there’s another at 941.70 that now looks more compelling. Bottom-fishers can nibble there with a very tight stop-loss, but my hunch is that the futures will fall to the lower number if the first is exceeded by 80 cents or more. Alternatively, a run-up to at least 957.60 would be needed today to turn the hourly chart buoyant once again.
We’re still trying to exit four September 10-August 10 calendar spreads for 0.50, a gain that would come on top of a 0.90 credit that is our effective cost basis. Today, bid 0.15 to cover the short August calls, but lower it to 0.10 if SLW touches 9.40 intraday.
A decline today touching 157.01 would imply that the stock’s problems are serious. To leverage the downside speculatively with relatively little risk, I recommend buying the January 130-October 130 put spread for 3.40 up to a dozen times. If anyone fills the order, which is good through Wednesday, please let me know in the chat room so that I can establish a tracking position for your further guidance. ______ UPDATE (3:30 p.m.): Several of you informed me that you got aboard, so I’ll establish a tracking position of four spreads @ 3.40. For now, do nothing further.
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SIDE BETS for Tuesday
Conventional trendline support near 12.61 looks compelling enough to use as a minimum downside target for today. Alternatively, UNG would need to pop above 13.59 to turn the hourly chart bullish.
The weekly chart looks quite robust, having created a bullish impulse leg back in May. However, it would take a two-bar close above the 368.45 midpoint pivot shown in the chart to signal that the consolidation is complete. Thereafter, HUI would become an odds-on bet to reach a minimum 433.67.
A push past a midpoint resistance at 9370 would imply more upside to at least 9486, a Hidden Pivot that could be shorted with a very tight stop-loss.
On the weekly chart, we should take note of the fact that this bounce has come off a low just a hair from the 77.20 midpoint shown in the chart. Its breach would send DXY plummeting to as low as 72.93, but a print exceeding 79.78 to the upside would imply a reprieve, at least.
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‘All Roads Lead to Deflation’
by Rick Ackerman on August 11, 2009 12:01 am GMT · 25 comments
When we dropped out of the inflation/deflation debate a while ago, we asked the inflationists to wake us when the price of suburban homes reached a quadrillion dollars. Wouldn’t that be nice for the fifty million or so Americans who owe more on their homes than they’re worth! Anyway, the topic continues to percolate in the Rick’s Picks forum, including this recent, astute post from “Senor Cuidado”. Like us, the Senor doubts inflation is lurking around the bend:
Tahoe Billy, you priced gold and eggs but you left out oil. Oil is key to the U.S. economy. With gold at $3,000, what is the oil price going to be? And how are Americans going to afford the new stratospheric oil price? You also left out any interest rate prognostication. My advice is to read bloggers Ackerman, Shedlock, Denninger et al. and get a handle on » Read the full article