Monday, August 30, 2010

BP – British Petroleum (Last:35.56)

– Posted in: Current Touts Free Rick's Picks

So much for the "Damage? What damage?"  phase of BP's heavily engineered short-squeeze. Last week's selling created the bearish component of "dueling impulse legs" on the daily chart.  The stock appears to be weighed down by the reality of dealing with the spill legally and environmentally, and last week's price action suggests it could be a long slog before shareholders get another chance to bail out on a feeding frenzy.

ESU10 – September E-Mini S&P (Last:1067.75)

– Posted in: Current Touts Free Rick's Picks

The burden of proof has weighed on bulls since the summer solstice high (1129.50), which contained the gutless, month-long short-squeeze that unfolded following Independence Day. From current levels, buyers would need to reach 1098.75 in a sprint, since that's what it would take to turn the daily chart bullish for the first time in ten weeks. The hourly chart already is bullish, but it took some brazen manipulation to make it that way, including a news-driven trampoline short-squeeze off Friday's double-bottom low.

SIU10 – September Silver (Last:19.080)

– Posted in: Current Touts Free Rick's Picks

All signs on the daily chart are bullish now that the futures have exceeded the secondary peak at 19.270 recorded on June 28. That created a robust impulse leg by extending the thrust past an"external" high in addition to the two "internals" already surpassed. Since there has been no pullback yet, bulls could stretch for a second external (19.500, on June 21) or even a third (the May 13 watershed at 19.865) before taking a breather. More immediately, they'll need to push decisively above a midpoint resistance at 19.195 to be deemed ready for the finishing stroke to its 'D' sibling at 19.390. Sunday night's lazy poke above the midpoint was not a bad start on this, considering the hour. Bulls will be in fine shape, short-term, unless the futures print below 18.550 today. ______ UPDATE (9:36 a.m. EDT):  That 19.195 midpoint is giving Silver way too much trouble this morning, telling us SI is unlikely to head higher at the moment. A feint at the opening topped a penny above the pivot, at 19.205, but it was all downhill from there.  To reclaim the high ground today, bulls will need to print 19.285.

GCZ10 – December Gold (Last:1237.80)

– Posted in: Current Touts Free Rick's Picks

Doug McLagan's most recent, detailed analysis will be hard to improve on, especially since we have both taken note, at different times, of a potential short-term top at 1244.20, a Hidden Pivot that lay just smidgen below last week's actual high. As Doug made clear, we'll be better able to gauge the bulls' resilience when we see how eager sellers are to push the futures beneath some prior lows on the hourly chart.  For starters, it would take a print today below 1230.70 to create a bearish impulse leg. Failing that, the bears could get shoved all the way up to 1257.00 before they find a backstop.  That's a Hidden Pivot rally target tied to a midpoint pivot at 1234.30, so you should look for a camouflaged bottom-fishing opportunity near that number. The trade would be worth three or four ticks' risk. ________ UPDATE (9:29 a.m. EDT): This morning's obligatory, absolutely gratuitous swoon bottomed at....1235.00.  Don't fret if you missed getting aboard, since even on the one-minute chart there were no camouflaged patterns to grab hold of.  If you trade gold, take the hint and go fishing.

The Holiday Stretch…

– Posted in: Rick's Picks

It's late Sunday night, and fans of the Hindenburg Omen were taking another licking. DaBoyz have capitalized on Friday's wilding spree with a moderate short-squeeze that has the E-Mini S&Ps up the equivalent of about 50 Dow points.  There's always a chance that New York could awaken in a surly mood and kill the festivities, but my hunch is that the skeleton-staff schmucks who will be stuck at the office this week have been told not to pee, even, unless they clear it with someone high enough up the chain of command to be all but unreachable until after Labor Day.

The $15 Trillion Home Equity Question

– Posted in: Commentary for the Week of March 8 Free

[To broaden the conversation, Rick’s Picks inaugurates a two-week series of commentaries today from guests who have contributed regularly to the daily forum.  I can promise that you’ll enjoy these essays, which cover topics ranging from the peculiar economic boom in Germany, to the failure of New Jersey’s casinos, to the possibility that the global economic breakdown has been meticulously engineered by financial and political sociopaths.  This morning we proffer the always-sunny thoughts of Mario Cavolo, an expatriate who lives in China. His very bullish outlook for the global economy contrasts with some of the gloomier think-pieces that have appeared in this space.  In the essay below, Mario extrapolates a very positive economic outcome from the $15 trillion of unencumbered equity that Chinese property owners currently have vested in their homes.  Will the eventual leveraging of this still debt-free sum, together with the irresistible power of China’s growing economy, be sufficient to pull the world out of its funk?  Read on for Mario’s optimistic answer. RA] Current United States home mortgage debt: $15 trillion. Current China home equity: $15 trillion. Mortgage debt on those homes? Zero.  It is easy to suggest that this insight, which reveals a $30 trillion spread between U.S. home mortgage debt and Chinese home equity, better enables us to grasp the underlying forces impacting the economic power shift we are seeing from West to East. While it might be in vogue these days to criticize the United States for being built on a mountain of debt, I’d rather not. Let's first take a moment to remember the positive effect the world over which the judicious and reasonable use of debt has had over the past 50 years. How’s that you ask? Because while it is in vogue to complain about America’s mountain of debt, that very