Monday, November 22, 2010

The chart reproduced here on Friday is still valid. It shows a pattern going back to early November with the potential to reach 30.385 over the next 4-5 days.  First, as noted here earlier, a midpoint resistance at 27.685 will need to be surmounted.  This could happen sooner rather than later, since the futures have commenced Sunday night's activity with a 35-cent leap to a so-far high at 27.685, a tick shy of our bull trigger price.  Oops. They have just this moment pushed to 27.875.  Looks like the bad guys, aka DaScumballs, are in for a rough time!

With respect to the short-term picture, the futures have done little to encourage lately.  In fact, the sleazy head-fake on the opening bar Friday looked more like a short-squeeze-distribution ploy than bullish buying. It also failed to clear some minor peaks from last Monday, furthering the suspicion that Gold is in no great hurry to take flight. In any event, an upthrust today would need to exceed 1378.40 to catch fire.  That's the midpoint resistance on the pattern shown in the chart. ______ UPDATE (2:47 p.m. ET): It's shortly before 3 a.m. and the futures have been as high as 1364.80. The nearest HP target is 1366.10, but if the futures shred it, getting to -- and then past -- 1378.40 shouldn't be a problem.

The futures look poised to pop to at least 1.3754, predicated on their success in decisively surmounting a lesser Hidden Pivot resistance, a midpoint at 1.3691.  If they get by the higher number, that would portend still more upside over the near term to as high as 1.3778.  However, even achieving the lesser number will renew the bull trend on the hourly chart, so we should view the action over the next day or two as crucial in determining whether the rally is destined for big things or merely a flash-in-the-pan. _______ UPDATE (9:00 p.m. ET):  The Hidden Pivot target caught the actual high at 1.3785 within 0.0007 points. The futures dove sharply thereafter, erasing the gains from two days and then some.

The pullback from last week's 79.46 high will need to come down to at least 77.82 -- 0.34 points beneath the so far correction low -- for this vehicle to be considered properly recharged for a second bull leg.  Anything could in fact happen, but we'll let the burden of proof continue to rest on the bulls, since, after all, it is the illusion of a flying pig that they will be attempting to sustain.

Take a look at the chart if you want to see a worthless day of navel-gazing.  When I wrote as follows, I only hope that I saved you the tedium and minor anguish of tracking the futures for six pointless hours: "Let’s spare ourselves any ambitions in this vehicle today..."  Anyway, today is potentially a different story if DaBoyz kick off Thanksgiving week's obligatory short-squeeze coming out of the gate.   The Hidden Pivot resistance to monitor lies at 1199.50 -- exactly where Friday's head-butting inanity paused no fewer than three times. A three-point move above it today, or a close above it, would portend more upside over the near term to at least 1228.00.  Here are the relevant coordinates from the 60-minute chart: A=1167.75 (October 27), B=1124.75 (November 9).

Last week’s financial headlines offered a study in contrasts. On the ostensibly sunny side of the news was the explosive evacuation coaxed forth by General Motors' IPO. Economic optimists must have rejoiced at this spectacle, oversubscribed and charged with hubris as it was. Just like in the good old days, speculators and Wall Street bunko artists couldn’t get enough of a bad thing. Or are we perhaps being unfair to GM?  At best, we’d say the jury is still out, given that it has taken $50 billion worth of Federal largesse to elevate the once-mighty automaker from basket case to dubious recovery story. Nowhere in the torrent of stories about the IPO was there even a word about the actual cars that GM builds. Not that this would be a concern on Wall Street, with its idiot savant focus on the deal itself. For the record, we’ll mention that the latest Consumer Reports is not exactly gung-ho on GM’s, um, product.  Although the company has made strides in engineering and quality, notes the magazine, it still has a ways to go before it catches up with foreign competitors. (And let’s not even mention the Volt, a GM hybrid that looks like it will take every bit of a planned $7000 subsidy to dislodge the car from showrooms.) So if the hoopla-and-hubris surrounding GM was last week’s “good” news, what was the bad?  In case you missed it, a bankruptcy-in-progress that will eventually dwarf GM’s took another small step toward the abyss. We are of course referring to the latest bond sale by the Golden State -- a $10 billion debacle that drew such a tepid response that California was forced to cancel a second debt offering this week worth $267 million.  Too bad they don’t have a Federal Reserve-type bank of their own to take