Member-only content. Please Login or get a free trial of Rick's Picks to view.
COMMENTARY for Saturday
TODAY'S ACTION for Friday
Rick's Picks for Friday
The futures are down seven points at the moment, a tick off their evening lows. So far, it appears to be a routine shakedown to lower the price to more comfortable levels than obtained at Thursday’s close. The selling would become more serious, however, if it were to exceed 991.50 to the downside, creating a bearish impulse leg on the lesser charts. In a bigger picture, because the decline is following the creation earlier this month of a robustly bullish impulse leg on the weekly chart, we should assume it is merely corrective. A major new leg up would be signaled by a 37.50-point “booster stage” rally from within the pullback range 923-978.
A Hidden Pivot at 76.58 makes a compelling downside objective on the 180-minute chart, but if it fails to arrest the slide, the 72.93 ‘D’ target of a larger pattern will be in play. Both patterns are shown in the accompanying chart. Alternatively, it would take a rally exceeding 80.30 to turn the intraday charts decisively bullish.
There’s not much going on, really, but we could still take encouragement if the futures push past the minor, 950.60 peak mentioned here yesterday. Otherwise, look for any weakness to hit a minimum 932.30, a midpoint support that is not recommended for bottom-fishing because of its close proximity to lows made earlier in the week.
A midpoint support at 13.720 beckons, and you could bottom-fish there with a stop-loss as tight as three ticks. If it’s hit, though, expect the futures to continue their fall down to at least 13.365. Alternatively it would take a print at 14.295 to turn the hourly chart bullish. _______ UPDATE (2:52 p.m.) : The futures have trampolined 58 cents from within a penny of the 13.720 midpoint flagged above. If you caught a ride, profit-taking shouldn’t be much of a problem at this point. If you bought more than one contract, I’d suggest holding a third to a half of the position for scale-out selling, but with a stop-loss suited to your comfort zone. (Note: This tout was originally published as a Side Bet, below.)
Member-only content. Please Login or get a free trial of Rick's Picks to view.
Member-only content. Please Login or get a free trial of Rick's Picks to view.
Take any dozen good reasons for being bearish right now and they still don’t equal the bullishness of the chart shown. The undeniably compelling rally objective is 13085, a 4.8% move from current levels, and one can only surmise that the dusting the 12158 midpoint received on the last pullback (12/28) all but clinched a finishing stroke to the higher number. Moreover, it implies that bears shouldn’t get their hopes too high even if, in the next few days, the Dow plummets 324 points to retest the midpoint support. As of now, that would signal not weakness, but a screaming opportunity to get long. Hard to believe, really, but that’s what the charts say.
SIDE BETS for Friday
UNG’s collapse yesterday brought it to within 11 cents of an 11.31 Hidden Pivot target that I flagged during the webinar demo. I offer the target to all who have been picking bottoms the whole way down, encouraged perhaps by the very bullish outlook espoused a while back by Karim. The risk of bottom-fishing is arithmetically lower now, but surely there are more-opportune vehicles to trade? _______ UPDATE: UNG has bounced sharply this morning off an 11.30 low that lay just one tick from our target. If you bought the bottom, you’re on you’re on now.
A midpoint support at 13.720 beckons, and you could bottom-fish there with a stop-loss as tight as three ticks. If it’s hit, though, expect the futures to continue their fall down to at least 13.365. Alternatively it would take a print at 14.295 to turn the hourly chart bullish.
The September contract has slowly been making its way toward a potentially important top at 1.4647, a Hidden Pivot that is derived from a rally cycle begun in mid-May from 1.3416.
This Just In... for Friday
Some high-minded discussion of our economic malaise, originally published at LeCafe Americain, can be found at this link (with thanks to the chat-roomer who posted it earlier.) Here’s an excerpt:
“The most intractable part of the current financial crisis, and the ongoing problem of the US economy is the huge tax which is levied on the American public by its corporations, primarily in the financial and health care sectors, and a political system based on lobbyists and their campaign contributions.”
Reader T.H. McGraw, 70, is also a writer, and old enough to remember some pithy anecdotes about the Great Depression. In an article he wrote for the History News Network of George Mason University, he recalls an America that had the fortitude to weather hard times with a sanguine spirit. Read Remembering Past Hard Times, an excerpt from which is appended below, by clicking here.
“Someone from ‘the thirties’ seeing today’s consumerism might initially express surprise, maybe admiration. After seeing its magnitude they might tactfully inquire as to the means for all the affluence. Few of them would easily be aware of the associated dissipation of personal savings, reckless destruction of resources and environmental ravages. That seems to evade even modern comprehension as consumerism is suggested by most as the proper nostrum for current economic problems – using credit if need be. Not that people of the Depression years were unfamiliar with credit buying. We can find Woody Guthrie’s ‘Dollar Down and a Dollar a Week’ in the pop-song offerings today. Generalizing from our readings, those in the ‘hard years’ seemed a good deal more circumspect, less entitled, and indeed adept at material self-denial.”
Hidden Pivot Webinar & Tutorials
The next Hidden Pivot Webinar will be held on Feb. 29th - Mar. 1st. This two-day event is designed to teach you the risk-averse trading strategies Rick has taken to his seminars around the world. Once you have learned his proprietary secrets, you will approach trading and investing with enough confidence to make your own decisions without having to rely on the advice of others. For more information, or to register, click here.
Rick’s Picks Weekend Edition
by Stephanie DeMaria on August 22, 2009 12:01 am GMT
Is Cash for Clunkers Our Economic Destiny?
Although we had vowed to let the by-now tiresome inflation vs. deflation debate simmer for a while, it came to an unexpected boil last week after some provocative comments were posted by “Senor Cuidado” in the Rick’s Picks forum. Like us, the Senor finds it difficult to imagine how all of those printing-press dollars the banks are currently sitting on will find their way into the consumer economy. So far, the banks have recoiled from the idea of lending out their digital funny-money, using it instead mostly to purchase U.S. Treasury…
Read the Rest of the Article | Comments
***
Consumer ‘Surge’ Downgraded to a Blip
Yesterday’s selloff on Wall Street was attributed to disappointment over consumer spending data that suggest a hoped-for surge in recent weeks is looking more like a blip. Who could possibly have believed the economy was returning to life in the first place? Actually, one guy does come to mind – our telegenic friend Larry Kudlow — but we suspect that even he didn’t really buy into the “green shoots” story – other, perhaps, than as a metaphor that engaged the fancy of credulous news editors for a few short weeks. There’s The Wall Street Journal, for one, where editors have found reason to celebrate an uptick in…
Read the Rest of the Article | Comments
***
Hyperinflation Won’t Be Like Germany’s
I thought I’d overdosed on the inflation vs. deflation debate, but that was before I started reading Adam Fergusson’s When Money Dies: The Nightmare of the Weimar Collapse. Fascinating stuff. Anyone who thinks it couldn’t happen here is right in one respect: It won’t take ten years to play out in the U.S., as it did in Germany. Far from it. My guess is that our own hyperinflation nightmare – and we will have one once deflation has had its way with all who borrowed more than they can ever pay back — will be over within ten…
Read the Rest of the Article | Comments
***
How Quickly Could the Dollar Collapse?
We popped up on the “wrong” side of the inflation/deflation argument here the other day with a hyperinflation scenario that seems to us not just possible but likely. Although we hold fast to a prediction that deflation is going to run its course, throwing tens of millions of Americans into bankruptcy, before relief comes to debtors, we are persuaded that at some point well down the road the U.S. will throw the switch to hyperinflate. Even so, we believe that the attendant collapse of the dollar will play out far more quickly than the…
Read the Rest of the Article | Comments
***
Sadly, Recovery Hopes Are Riding on Shoppers
Here’s ignorance all ablaze, high atop the front page of Wednesday’s Wall Street Journal: “Reluctant Shoppers Hold Back Recovery”. So there you have it. If only we would all make a beeline for the mall and shop-till-we-drop, just like the good old days, then we would have the kind of recovery that warms economists’ hearts. And it is evidently the economists, more than anyone else, who are clamoring for a return to the halcyon days of binge shopping in America. In a survey conducted by the Journal last month, 60 percent of the…
Read the Rest of the Article | Comments