Friday, April 29, 2011

If you're betting against the dollar, it looks like you'll have the wind at your back down to at least 72.26, a Hidden Pivot support whose provenance is shown in the chart.  Judging from the way sellers bombed another, far more important, one at 73.51, I wouldn't count too heavily on a big bounce from 72.26, even if it might suffice for scalpers.  A major target at 68.36 is unlikely to be reached without an intervening, strong upthrust, but evidence continues to mount that it will indeed be achieved.

I'm not going to venture too far out on a limb with predictions for this rabid animal as it takes the measure of a $50 "barrier" that perhaps too many traders expect to be so challenging. If I were the rabid animal, just to make a point, I'd pop through $50 on a Friday, then leave the precious metals world hanging in suspense by closing $1 to $2 above it for the weekend.  In any event, once the midpoint resistance at 49.670 flagged here earlier falls, its sibling 'D' target at 54.725 will be waiting for us with open arms.

We remain focused on 1581.20 as an upside target. The futures appeared to be sustaining altitude early Thursday evening, holding nicely above the 1533.40 'D' target of a lesser pattern reached earlier in the day.  This suggests that the bad guys may be in for another rough day on Friday.  However, they'll have more than a slender reed to lean on at 1581.20, since it is a target that has been a while in coming. I've reproduced a chart alongside so that you can see this once again for yourselves.

The 1371.00 rally target given here yesterday remains valid, even if the stall that I'd guaranteed precisely at its sibling midpoint, 1359.00, missed by two ticks. (Friday morning update: Now missed by one tick, since today's high so far is 1358.75.)  I've checked the 3-minute chart in search of 'camo' opportunities for night owls, but as of around 7:20 p.m. there didn't appear to be enough subtlety in the upthrusts to give us the edge we typically look for.

Just when I thought it was safe to set the Hyperinflation vs. Deflation debate on autopilot, along comes Gary North with a smugly condescending essay posted at lewrockwell.com  that put my name in the headline and unspoken words in my mouth: “Rick Ackerman Defects to the Hyperinflationists Camp After 30 Years.” Not so fast, Gary. I’d still back anyone with a good deflation argument, of which there are many, and I can still take the deflationist side of the debate against you or anyone else without fear of getting pushed around. Nor will I ever be comfortable sitting in the same pew as Liro Gonzala, Jim Willie and a few other inflationistas who go “all-in” every time someone even mildly contradicts them. And just because I was impressed with FOFOA blogspot’s hyperinflation arguments is no reason to infer that I cannot find holes in them. Even he doesn’t claim to have a crystal ball, or that the debate is over. There will always be room for doubt. Take his counterintuitive assertion that the bankers who hold our mortgages would fare better in a hyperinflation than a deflation.  While deflation would likely reduce them to bag holders in a tidal wave of bankruptcies, the mere whiff of hyperinflation supposedly would set them scrambling for tangible assets before the rest of us even have time to panic. FOFOA convinced me that this is indeed plausible with a step-by-step argument much clearer than any I had come across. But even he would concede that things might not go so smoothly for the Masters of the Universe.  For starters, there’s the assumption that they will be cashed out at 100 cents on the dollar and have time to trade the money for real goods just ahead of the dollar’s collapse. Although there is precedent