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COMMENTARY for Friday
TODAY'S ACTION for Friday
Rick's Picks for Friday
Perhaps if we all stopped watching gold so hard for a day or two it would show less disdain for bulls and do what had come naturally until last week — i.e., move relentlessly higher. In any event, we needn’t debate our choice of benchmarks to tell us when buying has resumed in earnest. Because the 1154.50 peak shown on the accompanying chart cannot tell a lie, that’s where we’ll set a screen alert to wake ourselves. If the futures instead fall Thursday night after having gone no higher than 1139.00, some key (albeit minor in the bigger picture) supports lie at 1123.30 and 1107.60. _______ UPDATE (3:48 p.m. EST): Another lousy day for gold. I wouldn’t touch the futures before they hit 1090.20, a Hidden Pivot that looks magnetic. This kind of weakness, with gold getting dragged lower each day, kicking and screaming, will ideally produce a V-shaped low.
A Hidden Pivot target at 17.015 went unachieved yesterday when March Silver got hung up in what will likely prove to be a distribution zone. That number would be a buy with a tight stop-loss; otherwise, a print exceeding 18.050 would be needed to turn the hourly chart unambiguously bullish.
The futures have been screwing the pooch since early November. Are they perhaps trying to tell us something? Such as: It’s not worth trying to guess when the breakout — or, somewhat less likely, the breakdown — will occur? My guess is that it won’t be today, so let’s celebrate with a one-day moratorium on Hidden Pivot targets for this sludge-pot.
The futures found little support yesterday at the 118^14 Hidden Pivot midpoint of the pattern shown in the chart, so we’ll assume they’re bound for that number’s ‘D’ sibling, 116^20, at least. The downtrend begun around Thanksgiving has unfolded with authority, and nothing less than an upthrust exceeding 120^14 will suffice to turn things around.
The stock would need to pull back to at least 166.18 to be properly rested for another bullish thrust, but we’ll accept the actual low at 166.21 as sufficient. That implies a long entry at 167.16 and a 169.99 target, but it’s not an ideal camouflage opportunity because of the overnight interval between the creation of ‘C’ and its calculated entry price ‘X’. No trade is advised, but this would have been an enticing one if the expected liftoff had occurred before yesterday’s close.
When HUI exceeded a 502.82 Hidden Pivot resistance on December 1, it signaled more upside to at least 532.83, at least in theory. In practice, the bearish impulse leg from the all-time high reached the next day, 516.16, has unfolded with enough strength to suggest that at best, a consolidation of perhaps another 7-10 days will be needed to set the stage for an attempt at new highs. It’ll be at least 3-4 days before we see a follow-through leg to the downside on the daily chat but if and when it comes we’ll be better able to judge whether the recent damage is likely to prove fatal. More immediately still, let’s set the bar at 471.75 today to tell us whether bulls are feeling feisty enough to turn the lesser charts bullish sooner rather than later.
GOOG has been struggling for altitude lately, unable to muster the potential last-gasp rally it would take to achieve a Hidden Pivot target at 607.28. The butterfly spread advised from lower levels is nicely profitable now, but it may have entailed too much work to engage the interest of subscribers. Here’s an easy one, though: If the stock hits 607.00, get short by buying a single January 570 put. It should be selling for less than $5, but it will be easier to be scientific about it by monitoring the option bid/asked spread when the stock gets within a buck or so of the target.
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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.
This Just In... for Friday
Just when you thought the global-warming mandarins couldn’t embarrass honest scientists any more than they have, along comes a new scandal. Turns out the mandarins’ temperature-measuring devices in all too many instances sat next to the exhaust fans of air conditioning units, were surrounded by asphalt parking lots and roads, sat on blistering-hot rooftops, or near sidewalks and buildings that absorb and radiate heat. Click here for this sad, sad story and an album of incriminating photos.
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.
More Reasons Why Deflation Will Rule
by Rick Ackerman on December 11, 2009 4:36 am GMT · 32 comments
We usually like to kick off inflation vs. deflation debates with an incendiary essay of our own, but this time we offer you opinions from two outside sources, one predicting more deflation (Hoisington Quarterly Review and Outlook); the other, a hyperinflation (Shadow Government Statistics, published by John Williams.) If you read Ricks Picks regularly, you’ll already know which side of the debate we’re on. We have shouted deflationist warnings from the rooftops since the mid-1990s, writing on the topic for Barron’s, the San » Read the full article