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COMMENTARY for Wednesday
TODAY'S ACTION for Wednesday
Rick's Picks for Wednesday
It wasn’t supposed to be a struggle yesterday to reach a Hidden Pivot at 1261.80 – which, as you will surely know, the futures never did. What we saw instead was a garden variety bull-trap that got sprung overnight. Now, because the rally died at 1254.50, we’ll need to ratchet down our expectations a tad and ask that bulls demonstrate their case one impulse leg at a time. For starters, we may be able to get a read on this vehicle as early as Tuesday night, since the dainty pattern shown in the chart ought go no lower than the ’p’ midpoint — and certainly no lower than ‘D’ — if bulls are to remain in command. The no-sweat scenario would be for the futures to simply pump once or twice today or perhaps tomorrow to reach 1261.80.
The Diamonds cry out to be kicked in the nuts, since they bounced yesterday from such a stupidly obvious place, a nickel beneath the key low at 97.75 recorded on May 25. Keep in mind that this is NOT a double bottom in Hidden Pivot terms, since the 5-cent overshoot created a proper, bearish impulse leg. We’ll let things play out a bit before we attempt again to get short. The chart shows where a telling midpoint could conceivably form, providing us with an objective rationale — and a plan — for action.
The first place where bulls would become resurgent today is at 18.515, one consequential tick above a small peak among several left on the hourly chart by last week’s steep descent. The rally would become unstoppable, however, on a print at 18.815, a tick above a more important peak recorded two weeks earlier. That would also surpass a midpoint resistance at 18.795 that is associated with a ‘D’ target at 20.175. Please note that a correction down to as low as 17.750 would not diminish the bullishness of this week’s rally one bit.
Longer-term charts suggest Goldman will grope its way down to at least 115.61 this summer, but it’s too early to tell whether a lesser but even nastier pattern in gestation at this moment will wreak the maximum damage of which it is capable — i.e., a pounding down to 94.19. It’s shown in the accompanying chart, and the uncertainty yet remaining concerns whether there is a pop yet to come that will invalidate the existing point ‘C’.
Using information disseminated in the chat room, we took a casual swing at Hecla yesterday that was based on a minor impulse leg and a strong tout from our friend Phil Calderone. I will formalize the effort to get long in this stock if an exceptional opportunity arises, but at this moment I do not share Phil’s sense of urgency. A print at 5.62 would change that, but we can let it happen first before we act. For those eager to imbibe more risk, the stock is working on a bullish impulse leg on the hourly chart that bids fair to deliver 5.47. (A=5.10, on June 7; B=5.39, C=5.18) The entry signal was tripped ay 5.25, but the stock would need to push above the 5.33 midpoint to become a more enticing bet. Entry at that point would presumably be via camouflage, but you may need to hunker down on the 3-minute chart to find it.
Shortly before 2 a.m.,the futures had tripped an entry signal at 1057.50, implying they’re bound for its sibling midpoint at 1062.50, or perhaps to 1072.50 if any higher. I’ll suggest passing this one up, since latecomers are being given far too much time to get long. The trade might have been a go intraday using a “time stop” designed to take you out of the position if the move from the ‘X’ entry price to the ‘p’ midpoint did not materialize in, say, two or three minutes.
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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 Wednesday
From the never-less-than-fascinating Spengler, here’s a brilliant and unconventional analysis of Turkey and how it perceives itself in a post-American (and post-Attaturkian) world. Along the way, he notes that Turkish intelligence duped Israel into botching the flotilla raid. Click here to read this remarkable essay.
Okay, I went overboard trying to get your attention with the headline. However, I don’t think the gravity of Iran’s threat against Israel can be underestimated. Iran and Turkey appear ready to join forces militarily to challenge Israel’s blockade, and very soon. Israel will not back down from this confrontation, and I cannot imagine that Hillary Clinton or the U.N. Security Council will be able to derail it. The situation seems quite serious, really, notwithstanding the fact that the breathtaking imbeciles who buy U.S. stocks higher on most days are at it again today, ignoring not only the possibility of a shootout between Israel and its two most powerful enemies (one of them a NATO country!), but the possibility that the Gulf oil spill is going to kill the Atlantic Ocean. Click here to read more on Ahmadinejad’s brazen threat.
Hidden Pivot Webinar & Tutorials
The next Hidden Pivot Webinar will be held on Feb. 29th - Mar. 1st. This two-day event is designed to teach you the risk-averse trading strategies Rick has taken to his seminars around the world. Once you have learned his proprietary secrets, you will approach trading and investing with enough confidence to make your own decisions without having to rely on the advice of others. For more information, or to register, click here.
Britain Becomes the First to Choose Deflation
by Rick Ackerman on June 9, 2010 2:36 am GMT · 107 comments
[Over the last three years, the Federal Reserve has conjured up trillions of dollars of funny money in an attempt to breathe some inflation back into the economy. The attempt has clearly failed. Now, it would appear, Britain has become the first country to throw in the towel on fiscal and monetary black magic. In effect, the country has decided to let deflation take its course, allowing the chips to fall where they may. In the essay below, "Cameroni," a frequent contributor to the Rick’s Picks forum, takes a close look at the decision and what it will mean not only for Britain, but the world. He concludes with a list that spells out what to expect, and the kind of pain we will experience as the world’s financial system comes very slowly back into balance in the years ahead. If his predictions are borne out, the standard of living is about to fall sharply for billions of people around the world RA]
David Cameron’s new Government in Britain announced Tuesday that it will introduce austerity measures to begin paying down the estimated one trillion (U.S. value) in debts held by the British Government. Lets let that sink in for a moment, for it is a stunning announcement. Now repeat it: Britain will introduce austerity measures in order to eliminate the deficit and begin paying down the national debt. And that being said, we have just received the signal to an end to global stimulus measures — one that puts a nail in the coffin of the debate on whether or not Britain would “print” her way out of the debt crisis. That would have virtually guaranteed an eventual hyperinflation that would have » Read the full article