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COMMENTARY for Monday
TODAY'S ACTION for Monday
Rick's Picks for Monday
If the bearish target at 1022.75 is reached as predicted, a 500-point plunge lies just ahead for the Dow Industrials. Friday’s feeble rally did little to change the outlook, since it surpassed only a single prior peak on the hourly chart, not the two that we require. Even so, we should be on our guard against a short-squeeze, since it would only require a print today at 1094.00 – 5.25 points above Friday’s peak — to turn the odds against bears for the short-term. The 1022.75 target would nonetheless remain valid in theory as long as 1174.75 (aka point ‘C’) has not been breached to the upside, but for all practical purposes it would take only a print at 1123.00 to all but guarantee significantly higher prices thereafter.
Friday’s rally in gold was as unimpressive as the one that occurred in stocks, having failed to exceed two prior peaks on the hourly chart. Still, the futures remained moderately buoyant Sunday night and appeared bound for an unambitious Hidden Pivot resistance at 1192.00 that lies just $4.20 above Friday’s peak. It would refresh the bull trend on the lesser charts if the target were to be achieved; if not, the futures would be vulnerable to a downdraft to 1159.00 over the near term.
It’s Sunday night, and the futures are gently wafting above a 17.785 midpoint resistance associated with a ‘D’ target at 18.015 (A=17.410 on the hourly chart). We’ll use the latter price as a minimum upside objective over the near term, noting at the same time that additional resistance may be encountered at 17.905. This is all pretty innocuous stuff, but if bulls were to rev things up a bit and surpass 18.725 today or tomorrow, that would put the fear of the Lord in bears’ cold, tiny hearts.
Pretty amusing, what passes for “safety” these days, eh? It looks like the bullish frenzy will continue, since Friday’s surge speared what had appeared to be a daunting midpoint resistance on the daily chart at 124^31. The ‘D’ sibling target of that number lies at 130^04, and although it’s difficult to imagine what manner of deranged thinking could conceivably push bonds, even in a Great Recession, to that level, the charts are telling us we should not be surprised if it happens. For your information, the rally equates to an interest rate of about 2.86% on the 10-Year Note (see inset).
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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 Monday
Gross public social expenditures in the European Union increased from 16 percent of gross domestic product in 1980 to 21 percent in 2005, compared with 15.9 percent in the United States. In France, the figure now is 31 percent, the highest in Europe, with state pensions making up more than 44 percent of the total and health care, 30 percent.
via Payback Time – Deficit Crisis Threatens Ample Benefits of European Life – NYTimes.com.
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Ski-Property Crash Has Barely Begun
by Rick Ackerman on May 24, 2010 2:01 am GMT · 7 comments
Colorado ski properties are enjoying a dead-cat bounce, although readers of a recent article in the Denver Post might infer there is something more to it than that. The article noted that in Eagle County, which includes tony Vail, residential transactions were up 190% year-over-year for the first quarter. That represents 276 properties changing hands, compared with 145 during the same period a year ago. However, as the article acknowledged, the surge was from very depressed levels, and it still fell 27 percent shy of the total for 2008 and 58 percent shy of the figure for 2007. Nowhere was there any mention of price trends or rental costs. If these factors had been taken into account, it would » Read the full article