Monday, June 14, 2010

As long as we're trying to lighten the mood around here, check out this howler from the New York Times.  It concerns how New York's legislature is about to let the state and municipalities borrow $6 billion to help them make their required annual payments to the state pension fund.  You'll never guess were they intend to get the money.  Click here  for the punch line.

Today's commentary is indeed grim, so let me offer something to lighten the heart:  a well-reasoned essay predicting that Obama will not finish his term -- that he will be forced to resign.  The author is Peter Ferrara, writing in The American Spectator, and you can access the article by clicking here.

Debka.com is reporting that the war in Afghanistan is about to end, although not with a victory for the U.S.  "The repercussions of the U.S. exit in these circumstances will impinge on American influence worldwide including the Middle East," Debka noted.  For the complete story, and for details of how Pakistan has helped turn the tide for the Taliban, click here.

Let's make DaBoyz push this hoax past 1118.00 (1122.75, basis June) before we jump on the bullish bandwagon.  That number corresponds to a peak along the wall of May's decline, and a rally that exceeds it would create a sufficiently robust impulse leg on the hourly chart to warrant our bemused attention if not our respect. Keep in mind that the rally would need to be unbroken on the hourly chart from the time it passes the "starting line" represented by twin peaks #1  at 1102.75.

While Friday's fleeting spike failed by a few cents to reach a midpoint target at 18.555, it succeeded in refreshing the bull trend by pushing above some external peaks from earlier in June. If and when the midpoint is breached, we should infer that more upside to at least 19.200 lies immediately in store.  However, if the futures should pull back over the next day or two, a midpoint support at 17.765 is the first place we might look to bottom-fish aggressively.

The suspicion grows that yet more tedious, inscrutable buoyancy lies ahead for the summer, so labored and disappointing has been the follow-through to the May 6 cascade.  While the Dow Industrials "should have" fallen to at least 9616, or perhaps to 9535, they've managed  a correction so far down to only 9758.  The shortfall would have bullish implications for the intermediate term if the ponderous dithering that has characterized price action since late May should ultimately give way to rallies exceeding the specific peaks I have referenced in today's touts for the Indoos and the E-Mini S&Ps.

Inflation, deflation, government borrowing or the plunging euro — you name it — the specter of these concerns has set off a dash to gold, driving the precious metal to new highs and illustrating how fears of economic turmoil have moved from the fringe to the mainstream. via Worried About Their Dollars, More Are Turning to Gold - NYTimes.com.

We’ve railed at traders and speculators recently for their arrogant and sometimes breathtaking stupidity in failing to discount an onslaught of world-shattering news. If the dolts, rubes, bozos and mountebanks who have kept stocks afloat even remotely understood what has been going on in this world, we wrote here recently, the Dow Industrials would plummet 6000 points in mere days.  And the news has been grave, indeed.  America’s wholly imagined economic recovery died for good on Friday with the release of shocking retail figures for May. Household incomes have been falling, consumer credit imploding, M3 plummeting, and now it turns out that corporations have allowed $1.8 trillion to sit idle in low-yielding bank accounts, hastening the economy's deflationary collapse and the onset of a Second Great Depression. We face the impossible task of getting out from beneath $130 Trillion of debt and liabilities amassed by government at all levels. The nation is adrift under a weak president whose radical politics have sharply divided the voters. Iran and Turkey (a NATO member!) have declared war on Israel, sending warships to run the Gaza blockade. Europe’s financial house of cards is within months, or even weeks, of total collapse.  The jihadists may be turning the tide against U.S. and British forces in Afghanistan. Unfortunately the list does not end there. For in fact, there is one crisis that greatly overshadows all of them:  the seabed irruption in the Gulf of Mexico. We won’t even pretend any longer that there is a market “angle” to this story.  In fact, the markets are a side show, and politics a droll burlesque, in comparison to the geophysical dreadnought taking shape in the Gulf.  Because it could eventually threaten all life on this planet, there may be no “investable issues” here. Seabed Fissures The problem is no longer a leak or a spill, you see,

Two midpoint pivots lie not far above, hidden  impediments that could soon test bulls' mettle.  One is at 1237.40, the other at 1244.40, and the provenance of both is shown in the accompanying chart. Let's stipulate that a two-day close above the lower resistance is needed before we infer more upside to the sibling targets of those numbers -- respectively,  1258.60 and 1272.60