Tuesday, March 23, 2010

IWM, the Russell 2000 ETF, is approaching a shortable "D" target at 70.67 based on the weekly chart.  Traders should sell short at 70.56 with a stop at 70.86, risking $30 per 100 shares traded.  Please note that these levels have been adjusted from those mentioned initially in the chat room on Monday.  (Posted by Doug McLagan)  ________ UPDATE (2:58 a.m. EST, March 31):  This tout is no longer active.  It was replaced on March 31.

Goldman's spectacular bear rally is within striking distance of regenerating itself, since all it would take to create a quite potent impulse leg on the daily chart would be a $3.23 rally above Friday's highs. Meanwhile, a mere 55-center above the peak would meet the minimum requirement  of surpassing one "internal" and one "external" high.  With the financial stocks in gear, the nearly 13-month-old bear squeeze would be in good shape to continue through Spring.  Actually, if the stock breaks out in the manner shown in the chart, it could get to 206.80 -- a 17 percent move from these levels -- in a hurry.

The Dollar Index generated its first bullish impulse leg on the daily chart in seven weeks, and that'[s why I've featured it in today's touts.  A follow-through upstroke is not a done deal, at least not yet, but we should monitor the correction closely, since a resurgence obviously would weigh on bullion.  Permabears should also take a good look at the chart accompanying today's Goldman tout, since the stock looks like it's setting up for a possible moon shot.

Yesterday's thrust created a bullish impulse leg on the daily chart, although the requisite pullback will need to come down to at least 80.52 to recharge DXY for another rally. Once that occurs, the Dollar Index will be in position to push up to as high as 82.09 over the near term.

Silver was showing even more pluck than Gold Monday night, gently impulsing above the day's highs in thin trading. The after-hours peak so far as been 17.000, but if bulls can pop the futures decisively above a midpoint resistance at 17.005, a finishing stroke to the 17.125  'D' sibling of that Hidden Pivot would become likely.

Because yesterday's buy recommendation caught the overnight low to the exact tick, we ended the day long a single contract whose cost basis has been reduced by profit-taking to 1113.00.  Those who initiated the trade on a single contract were advised to exit earlier at 1160.25, producing a theoretical gain of $650 on a day trade. For now, continue to use an 1175.75 target, one-cancels-the-other, with a stop-loss at 1157.25.  If the futures hit 1166.00, implement a 4-point trailing stop.

 I jumped the gun when I flagged a bearish target at 1082.70 yesterday morning before another at 1090.00 had been breached. That last number, a Hidden Pivot support, not only survived, it birthed a promising rally that was continuing into the early evening.  The rally will become more than merely promising if and when it exceeds 1109.75, breaching the look-to-the-left peak shown in the chart. Thereafter, we could expect clear sailing to at least 1120.60, the midpoint pivot of an uptrend begun on February 25 from 1088.80.

Yesterday we aired a bearish prospectus for Canada written by “Cameroni,” a regular contributor to the Rick’s Picks forum. He expects a real estate bust and sees the Canadian economy ultimately getting dragged into the same deep bog that has trapped the U.S., on whom the nation’s export economy depends heavily.  Below is a response from “Bobtor” arguing that Canada is in far better shape than the U.S. to weather hard times, for a number of reasons. For one, the retail climate remains much healthier, with few signs of the blight that has shuttered tens of thousands stores, restaurants, malls  and prime commercial properties across America. Bobtor also thinks Canada’s political and business sectors are unpolluted by the kind of lies and corruption that have become endemic in the U.S. Here’s Bobtor’s post to the forum which can be accessed by clicking here: Thank you, Martin, for reinforcing some of the key points of my comments that seem to be lost on Cameroni. I too was not saying that Canada is in great economic shape, but that by comparison we are doing much better than the US, for the reasons you have mentioned and for many other. And Cameroni, I am not a real estate professional any more than I am a stock professional; I merely invest in both real estate and in stocks. I just like to know the rules of the games I play, hence my knowledge of real estate financing. Real estate prices will not crash in Canada in the manner or to the extent they have in the U.S. We do not have rental stock in our cities to accommodate the people coming in. The economics of cost, and rents, and rent controls in many Canadian cities have precluded the recent building of new rental stock.