March 2010

All due praise to Google, which has put principle above money by refusing to censor search results in China. We can’t recall the last time an American company publically took the high road, ethically and morally speaking – especially when billions of dollars of potential revenues were at stake as they are in this case. More often, we read about bribery scandals abroad and cynically assume it’s the cost of doing business in the ethical swamps that lie outside of Europe, Canada and Japan. China is much worse than merely corrupt, however, and that’s why it was an ideal place for Google to take a principled stand. In fact, China is a place where dissenters disappear from their homes in the middle of the night, and whose authoritarian government has embraced a particularly brutal form of genocide to achieve its goal of subjugating Tibet.  Since invading the country in 1949, imperial China has killed nearly a fifth of Tibet's population and destroyed 6,000 monasteries. Concerning China's sway over a supposedly free Taiwan, the Chinese government has threatened would-be interlopers, including the U.S., in the bluntest terms. Writing Off the U.S. And yet, with the singular, praiseworthy exception of Google, corporate America seems to have no qualms about doing business with China. The hope – or excuse, perhaps – is that by engaging China in trade, we stand a better chance of drawing the country into the community of nations that recognizes basic human rights, private property and the rule of law. While this calculation may have seemed persuasive ten years ago, it has been weakened by China’s emergence as a dominant economic power. Granted, they have not yet told the U.S. to take a hike. But they are very nearly in a position to do so, since they could easily

A hoax?  Or is it the answer to mankind's energy needs? This is one of those news stories about which...who knows?  Click here  to access the video.

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  (Posted by Doug McLagan)  ________ UPDATE (2:58 a.m. EST, March 31):  This tout is no longer active.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.