January 2010

U.S. securities markets are closed on Monday, Martin Luther King Day.  Touts and commentary for Tuesday will be out by Monday evening or earlier.

Three of Friday's touts are actionable, but the odds look best for the short recommend in the E-Mini S&P a few boring points above Thursday's peak.

All signs point higher, but boringly.  The nearest rally target where you might attempt to get short with a laughably tight stop-loss is 1149.50.  There are other, middling targets below it, but 1149.50 is the last shortable number before ES must be presumed bound for 1166.00, a Hidden Pivot resistance broached here earlier. ________ UPDATE (9:13 a.m.):   Overnight weakness was sufficient to create a bearish impulse leg on the hourly chart.  As of this moment, the follow-through projected to at least 1139.00, but potentially to 1135.50 if that Hidden Pivot midpoint is breached. Both targets will remain valid as long as 1142.50 is not exceeded to the upside.

The Dollar Index has been having a devil of a time falling to a compelling Hidden Pivot support at 76.08.  While we might ordinarily ascribe latent strength to DXY because of this, the rallies have been too feeble to earn our confidence.  Notice how yesterday's seemingly ferocious rally left an obvious peak on the 30-minute chart intact.  If the bulls had  had any gumption, the peak should have been swept aside easily.  Even so, I wouldn't suggest trying to impede this apparently chicken-hearted rally.  But we should at least set the bar high to warn us if bulls should turn serious. For today, that would mean a push exceeding the look-to-the-left peak at 77.51 shown in the chart.

The corrective pattern in Silver looks less reliable than the one I've flagged in Gold, although there's a comparable midpoint support at 18.415 that we can use as a minimum pullback target.  You can try bottom-fishing there with a three-tick stop-loss, but be aware that this is a riskier play than in Gold.  On the weekly chart, Silver has already blown past the midpoint resistance analogous to the one proffered in Gold. The Hidden Pivot was at 18.425, a whopping 50 cents below the peak recorded by the March contract in December.

Don't sweat it until this vehicle hits 1175.00, an important midpoint resistance broached here earlier that comes from the weekly chart. That is my minimum upside objective for the near term, and it will pose a key test.  We should not exhale a sigh of relief until the futures have closed above it for two consecutive Fridays.  A long time to hold one's breath, for sure, but we don't want to buy into a false signal here.  Most immediately, you can try bottom-fishing the 1129.00 Hidden Pivot support shown in the chart with an 1129.20 bid, stop 1127.90.  If the stop is hit, February Gold will be facing jeopardy over the near term to as low as 1111.30, the 'D' sibling of 1127.90.

Weeks have passed since I first suggested shorting February 29 calls (UMUBK) for around 0.95 against stock we already own.  The calls now look like they'd be a good sale for around 0.70-0.75.  The price target on the underlying is still 27.15, so we're close enough to do the trade.  You should also buy a February 24 put (UMUNZ) for each round lot of stock you hold.  Try using a day-order of 0.35 to accomplish this.  I expect Akamai to make a tradable top at or near the target, but whatever the stock does, we have a built in profit of around $1600 per round lot at these level, since our cost basis is $11.01.

Google is showing some spine in standing up to China, although, to hear the  Chinese tell it, a home-grown company was already beating the Mountain View, CA-based search-engine firm at its own game in China. We wish Google well, since the Chinese have been playing hardball lately with the kind of troublemakers who value human rights more than, not merely business, but their own lives. Over the protests of the U.S. and the rest of the free world, China made a show of sentencing dissident writer Liu Xiaobo to 11 years of hard labor. We wouldn’t put it past them to plot murder against nettlesome Google developers working in China, since a show trial could easily backfire. That’s how China’s Russian comrades have silenced those who spread supposedly subversive ideas. They don’t even go to the trouble of making it look like the victim was hit by a bus. Will the Chinese prove to be even worse than the Russians in the human rights category? We won’t know until after they’ve delivered the coup de grace to the U.S. in business and finance. When they no longer have to play ball with us, that’s when we’ll find out what they’re really made of. Denials, Always Google’s doubts about remaining in China were prompted by a sophisticated hacker attack in  mid-December that could only have been orchestrated by the government. Hackers broke into the G-mail accounts of Chinese human-rights activists, drawing the interest of U.S. intelligence agencies.  In the past, the Chinese have denied any responsibility for such attacks against foreign entities. At press time, however, no Chinese spokesman had surfaced to repeat this lie. But Google appears serious about withdrawing its business from China. “We recognize that this may well mean having to shut down Google.cn, and potentially our offices

Another interesting report out from Auerbach Grayson.  Click here  to access their latest, a ten-pager advanced as follows:  "Rich Ross our Technical Strategist prepared the attached document last night. Read all of it please to see that the resonance of higher markets is ubiquitous not just in NY and Zurich but also in Bucharest, Istanbul, Colombo, Almaty, Caracas, and Tallin. Is the world awash in money? (check your pockets?). If in fact you need a glib answer look no further than the estimable Mr. Blankfein who during yesterday's testimony by The Four Amigos said, 'Money became plentiful, and so people paid less attention to risk'. Oh, ok, now we know about the money, but just for a reality check here, are we really floating on a sea of money or in fact is there a case that away from the Wall St factories there is an immutable momentum of real productivity and growth out there. We think so and it continues to deliver the levelling of the global economic playing field. By the way, today's subject line's first use is attributed to JFK in a campaign speech in 1960. Clearly a call at that time for government spending, it was later perverted by Laffer as a tenet for Reagan trickle-down economics."