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COMMENTARY for Tuesday
TODAY'S ACTION for Tuesday
Rick's Picks for Tuesday
The critical zone for gold is between 1106.80 and 1112.00, where a cluster of prior highs on the hourly chart intersects with the prominent descending resistance line on the daily chart. Fireworks could begin in this area, especially with a print exceeding 1112.00.
Copper’s feisty rebound from the February 5 low has surpassed an important prior high on the daily chart and looks set to continue. Action at a midpoint pivot of 3.1432, near current levels, should be telling. A pullback from there could provide camouflage that enables traders to get long with limited risk. Let’s use a move above the prior high of 3.1540, just above the midpoint pivot, as our signal that the sibling D target of of 3.2525 is within reach. ______ UPDATE (08:10 a.m. EST, Feb 17): The midpoint at 3.1432 indeed proved to be the key, but pivoteers needed to use it creatively by buying it on the return trip from above. This would have worked perfectly, as copper has since rallied by more than twelve cents a pound, worth as much as $2,677 per contract. The 3.2525 target was reached and surpassed, and we notice that the 0.618 Fibonacci retracement level for the large decline beginning January 7, which came in at 3.264, was also exceeded today.
If the bonds are going to reverse their recent downtrend soon, they might be expected to do so at a midpoint pivot of 116^15, which can be bottom-fished with a tight stop. The associated D target is 115^01, an area that will bear watching, as the midpoint of a larger daily pattern sits at the 115^10 level. ______ UPDATE (02:47 p.m. EST): The bonds have moved up enough to cancel our 116^15 and 115^01 targets.
A robust pattern on the daily chart points downward to a midpoint pivot at 71.42, and to a D target of 67.15 which would be a seven-month low. These targets are active so long as 75.69 is not touched or exceeded to the upside. Traders attempting to buy the midpoint should be mindful of the prior low of 71.32 when positioning stops. ______ UPDATE (12:34 p.m. EST): Oil has rallied powerfully and negated our targets.
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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.
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No Easy Way Back for U.S. Economy
by Rick Ackerman on February 16, 2010 12:01 am GMT · 23 comments
We wrote here the other day that once the bailouts and misguided stimulus attempts fail, the U.S. will have to start from the ground up to rebuild the economy. “But what mechanism can be used to bring back all the manufacturing jobs lost to China, Mexico, Taiwan over the last twenty years?” a reader asked in the forum. “It seems 80 percent of the population wants common-sense solutions, but the political meat grinder has its own agenda.” We replied as follows:
We’ll need to find our way back by producing services and goods that yield a comparative advantage for U.S. labor globally. That advantage would exist today if, since World War II, we had saved and invested most of our capital rather than consumed it and gone deeply into debt to live beyond our means. With Japanese levels of savings and investment, U.S. manufacture of steel, cars, clothing and such would be competitive with the most efficient producers in Asia and Latin America, much as our ability to grow and process corn — » Read the full article