Wednesday, August 25, 2010

Newmont slightly exceeded a key support yesterday -- a Hidden Pivot midpoint at 55.88 -- but only by seven cents, so we'll assume that it is still intact.  If the stock should close below the pivot, however, or trade more  than 10 cents below it intraday, that would indicate a likelihood of further slippage to as low as 51.54, our midpoint's 'D' sibling.

Fair-weather fans of the dollar should be encouraged by its recent price action. DXY appears to be consolidating at the 'p' Hidden Pivot midpoint of the bullish pattern shown, since much of the oscillation has occurred above it. If and when this number is decisively exceeded, look for the thrust to carry to its 'D' sibling at 84.85 straightaway.

Tuesday's wild gold trading left us with confirmed patterns pointing both up and down on the daily chart, a technical picture which echoes the mixed short-term outlook based on other factors.  The low Tuesday morning marked the biggest pullback of the four-week uptrend, but most of that pullback was erased during the sharp two-hour rally that followed.  Duelling commenters in the chat room suggested (1) that the low of the day felt like the late-August seasonal low, but (2) that retail physical demand remains weak since the price rose above $1200.  Traders with seasonals in mind should not forget the late-October low of 2008 and the action in stocks and Treasury bonds at the time.  More immediately, COMEX gold and silver options will expire tomorrow, an event which often has a way of exerting downward pressure on price.  So long as the recent high of 1239.5 is not touched or surpassed, the new bearish targets shown on the left side of the graphic will remain active.  Both midpoint pivots, at 1193.2 and 1185.4, are potential buying levels.  Our orientation is toward getting long, but the bullish pattern on the right portion of the graphic does not give us a low-risk way to do so.  Traders should look for a camouflaged entry, especially one that involves an impulse to slightly above 1239.5. (Posted by Doug McLagan) _______ UPDATE (2:02 p.m. EDT): Shortly before 5:00 a.m. EDT, gold popped up to 1241.7, cancelling the bearish daily pattern.  The subsequent pullback gave us a good-looking pattern on the 15-minute chart (with A=1231.9) projecting to D=1243.6.  The futures obliged by peaking at 1243.4 and then dropping by more than seven dollars.  Alert pivoteers therefore had multiple opportunities to profit based on the morning's action.  The high of 1243.4, which has been hit twice, is

It was painful to watch bears struggle for yardage yesterday, even though they had the "best" bad news in months to help them out.  With the Guvmint's $8,000 tax credit no longer available to home buyers, housing starts have of course collapsed.  This could not have surprised anyone save Kudlow and a few thousand economists, really, but it is in the nature of Wall Street to feign "shock" whenever such truly bad news crosses the tape.  When the dust had settled, however, the Dow was off just 133 points, well off the day's lows; and the E-Mini S&Ps had yet to achieve our Hidden Pivot target at 1040.25, having gotten no lower than 1044.00.  I predicted a relapse to the target during yesterday's weekly tutorial session -- and it shall pass, I am sure, in the fullness of time -- but the target itself holds less and less appeal with each new day's failure to achieve it.  A 1038.75 stop-loss would be appropriate for traders who, bored out of their minds, are eager  to so "something" just to keep from rusting up.

[From self-described, “radical ol’ gloom-and-doomer” and frequent Rick’s Picks forum contributor Steven George Fair, here’s a tormented essay on why most of us are too far removed from the experience of the 1930s Depression to have any idea or imagination about what is coming. And make no mistake, he warns: Bears who think their timing and strategy will be good enough to gloat about are the most delusional of us all. RA] There seems to be a single constant in the financial world, and those who play.  There are few if any perma-anythings, with most chasing the bull, or chasing the bear as a bear-bull in the moment.  It looks like the last of the Perma for Life people are dying off as the last of the generation that endured the Great Depression find their rest in the soil. The generation who made roads in the dirt, flew paper airplanes, and dreamed the impossible dream are now gray haired, and either broke or millionaires.  There is little ground in between the extremes that was once a maxim 20-60-20 rich/middle class/poor.  What seems to exist today is a younger generation with no imagination, incapable of taking a block of wood and shoving it around the dirt pile in dreams of logging trucks, and crawler tractors.  Lost are the majority who created art, and music in its natural form.  There are no lifelong collectors of anything, only a headlong rush from contemporary to abstract, and back in hyper-realism.  Value is now replaced with greed, and get it now before the color fades.  Bringing a face to this reality was a conversation with a PhD, retired, from NASA, who spoke to me about the fear in NASA that the upcoming generation's imagination has been lulled to sleep by fast TV, fast girls, and constant