Thursday, December 3, 2009

I didn't hear from any subscribers who butterflied the 610 strike as I'd recommended, but it sill looks like the stock could top out near that price. Specifically, there is a Hidden Pivot target at 607.28 where we could attempt to get short with relatively little risk. I may be able to advise a price for any put options we might buy if and when the target is reached, but for now I'll make it catch-as-catch-can, stop 607.41.

After feinting higher on the opening, Apple plummeted yesterday to within 7 cents of a 195.68 pivot where I'd suggested bottom-fishing with a tight stop-loss. The best opportunity is past, since targets work best when they are approached for the first time. However, if you bought the low on your own initiative, I'd suggest taking profits on half the position asap, then tying what remains to a stop-loss that would negate the possibility of a loss.

The 1152.75 target given here earlier is still the only game in town, but it feels as though DaBoyz will need some news to catalyze the short-squeeze that alone is capable of making the rally happen. The midpoint sibling of that number is 1110.25, and so we shouldn't be surprised to see the futures loitering near that price for as long as it takes to muster sufficient bravado for the next leap.  My hunch is that when it finally happens, perhaps starting with a gap at the opening, the move will prove to have been all but inaccessible to even the most patient bulls.

Bulls should have been heartened to see gold so resilient on a day when the dollar stood firm. The payoff appears to be coming this evening, with a bullish thrust by the February futures above the day's range. I still like 1227.90 as a minimum upside target, or perhaps 1230.00 if any higher, but we should turn cautious when that range is reached. It seems likely to show some stopping power, but if none is discernible that would sharpen the focus on the 1337.00 target given here earlier.

If America ever escapes from the current economic morass and decides to give capitalism a try, here’s a Wall Street Journal headline that suggests what we’ll be up against: "Sharp’s New Plant Reinvents Japan Manufacturing Model".  The article goes on to describe the $11 billion investment Sharp recently made in a huge manufacturing complex designed to keep Japan competitive with China and other Pacific Rim countries in the manufacture of liquid crystal display panels. The complex covers enough land to occupy 32 baseball fields and is viewed as the cutting edge of Japan’s efforts to compete in high-tech manufacturing against countries with a very significant wage advantage. Compare that to the $3 billion “investment” U.S. taxpayers recently made to stoke the Cash for Clunkers giveaway.  Where would you rather put your money? The sad fact is, we don’t have any investable money -- not just in theory, but in practice, since it would have to come out of household savings. A CNBC-type economist would probably point out that Americans have begun to save like crazy. We don’t doubt it, since that is exactly what debt deflations such as the one we are currently experiencing cause households to do. But those savings have in fact already been pledged ten times over to pay for an increasingly State-run future that is long on promises and short on revenues. The mirage of savings vanishes entirely when you consider that Americans will soon be on the hook for a trillion-dollar health care boondoggle; for several times that sum to finance a bank-system bailout that cannot possibly succeed; and for who-knows-how-much to sustain a Social Security system whose costs had far outstripped affordability even when the U.S. economy was booming.  Daiquiri Parasols A no-nonsense economist from the Austrian School would probably view the situation as hopeless, looking out