Thursday, November 5, 2009

Stocks seem in no rush to go anywhere, but because their headless-chicken shtick doesn't seem to be holding bullion back, we can afford to be indifferent to the ups and downs of the broad averages. Gold looks strong enough to pull Silver higher, which is what it will take, since Silver has been unable to eat through supply by itself.

With yesterday's close above 17.250, Silver has shortened the odds of a follow-through to 18.375, a Hidden Pivot. The futures evidently will need to be dragged higher by gold, however, since, on their own, they have been unable thus far to push through a thick supply zone created last month that December Gold effortlessly speared yesterday.

The futures looked bound for a tradable low at 117^06 when the day ended. That's a Hidden Pivot, and you could bottom-fish there with a 117^02 stop-loss if it's hit today or Friday. Additionally, a midpoint pivot at 118^27 is a logical place to try and get short, provided you can find a pattern that allows you to do so at the point 'p' or 'd' of a minor trend rally. _______ UPDATE: The futures went no lower than 117^22, so we did nothing on the order, which should be canceled.

An in-one's-face Hidden Pivot at 1111.90 is still my minimum upside objective for the near term, with 1134.50 likely if it's exceeded on a closing basis or by more than 1.50 intraday.  A tightly-stopped short is encouraged if you're day trading, and so is buying overnight that's based on a breakout above 1097.50, a midpoint pivot associated with an 1103.40 target.

End-of-day histrionics turned a promising buying pattern into dreck yesterday, so we'll be starting from scratch this morning. Any buying we might have done would have offered limited upside, since all the action was, and still is, taking place within a larger downtrend. The futures would need to hit 1070.00 today or tomorrow to change that, turning the hourly chart bullish; otherwise we'll look for tortured descent to test early October's low, 1012.00. ______ UPDATE (11:30 p.m.):  Selling Wednesday night was pushing the futures down toward a 1040.75 midpoint support that can be bottom-fished with a 1.00-point stop-loss, but if it's hit look for the downtrend to continue to the 'D' target at 1033.75. The pattern shows nicely on the 5-minute chart -- and please note that it proceeds from a distinctive one-off 'A'. If the decline were to play out in accordance with the obvious 'A' at 1058.50, the respective midpoint and target would lie at 1039.25 and 1030.75. ________ FURTHER UPDATE (9:24 A.M.):  The correction played out to the lower pair of targets, producing an overnight low of 1039.00 that corresponded to the obvious A at 1058.50. Bottom-fishing 1040.75 would therefore have produced a trading loss of about $50.

The bankruptcy of business-loan giant CIT made headlines last weekend, but the story seems to have died all too quickly, considering its importance. Women will recognize this soon enough, since CIT provided financing to 60 percent of the apparel industry. All told, CIT was lending to 2000 firms that supplied merchandise to more than 300,000 stores. If you think vacant storefronts are a blight now, wait till you see how the malls, big-box stores and strip centers look in another year. One thing’s for sure, a CIT in reorganization will not be doing nearly as much lending to a cash-strapped retail sector.        With CIT seriously hobble, our friend Rich Cash, formerly a fund manager with Merrill Lynch, has provided a breezy, up-to-the-minute view of the economic landscape. We proffer it below, with many fascinating links, for your enjoyment.    Will Earth Stand Still… Again?  Who missed the 1943 Academy Award nominee tear-fest set in Depression Era Yorkshire, starring young Elizabeth Taylor and Roddy McDowell? Who did not feel at least a twinge as 1951/1989 galactic ambassadors Michael Rennie/Keanu Reeves were shot dead warning Washington that the earth would be terminated if it did not stop building atomic weapons, destroying the environment or fighting in space? Who saw Michael Jackson’s eloquent posthumous plea for loving each other and saving the world with peace?  Klaatu barada nikto…Et tu Brute?…This Is It!  Our collapsing pyramid of Ponzi debts came home, and Earth’s financial systems may be about to stand still. The second shoe from Panic Fall 2008 perhaps dropped this week, after long heroic useless measures to save $78B CIT, choking on its own debt. CIT was a major financier of Dunkin Donuts and payrolls for thousands of other small businesses providing low-wage jobs in the service economy. The end of dollars