The futures were developing torque Sunday night for a shot at recouping virtually all of last week’s losses in a single, algorithm-enabled, short-squeeze burst on or before the opening. So much for all of the hard, hard work sellers put into driving stocks only moderately lower over the course of the last few trading sessions. My immediate target, based on the minor pattern shown, is 1323.00, but the futures will need to do a little better, surpassing a look-to-the-left peak at 1324.00, to refresh the bullish impulse on the lesser charts. _______ UPDATE (8:36 a.m. EDT): It would be premature to kick back and enjoy Sunday night’s refreshing selloff, since all of it so far has yet to create a bearish impulse leg even on the 30-minute chart. That would occur on a 1306.50 print, although the “dueling” impulse legs engendered thereof would still leave room for a moderately bullish bias. ________ FURTHER UPDATE (9:44 a.m.): Ahhhhh! How sweet. This unexpected plunge looks bound for a minimum 1287.25. You can try bottom-fishing there with a three-tick stop-loss.
From the monthly archives:
April 2011
I’ve provided two closely spaced rally targets for May Silver that are likely to show some stopping power. In any event, traders and investors should pay close attention, since the range defined by these two Hidden Pivots looks very compelling up to the level of the weekly chart (A=26.400). _______ UPDATE (8:42 a.m. EDT): Mild weakness in Gold is holding Silver back this morning, but nothing in the otherwise bullish picture for both has changed.
In today’s touts, I’ve extrapolated a potentially major top in the Gold Bugs Index that lies about 25% above current levels. There are also some benchmarks along the way that could prove useful to precious-metal traders an investors.
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Yesterday’s short-squeeze rally looked gutless, since it died three pathetic ticks short of a bullish impulse leg on the hourly chart. However, DaBoyz will undoubtedly try to pop this brick again today, since there were no pullbacks on Thursday big enough to let shorts off the hook. Whatever happens, we should set aside the 1295.25 downside target given here earlier, since the actual low at 1298.25 will probably stand for a while. If it doesn’t, however, you could bottom-fish a Hidden Pivot at 1292.75, provided 1313.25 (aka point ‘c’) hasn’t been exceeded to the upside overnight.
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Our recent discussion of whether deflation or hyperinflation will lay waste to the economy elicited hundreds of responses. Two of particular interest are featured below. The first, from blogger Charles Hugh Smith, explains why it may be impossible to know with any certainty which of the two forces will prevail. The second, the thoughts of a fourth-generation Texas rancher, suggests that in a crisis, we may discover that our need for protein trumps concerns over gold, silver, Treasury paper and the dollar. Here’s Charles, in an excerpt from an e-mail I received from him several days ago:
I certainly wouldn’t want to debate anyone because my arguments are those of a trader, basically, not an economist. Maybe we will get hyperinflation, I don’t claim to know. What bothers me is the widespread conviction that hyperinflation is “guaranteed.” This smells like a one-sided trade to me, even if it is more of a meme than a trade.
As we’ve both said, the other issue is, how do the Elites benefit from hyperinflation? The only answer I’ve ever received is “they’ve already bought gold.” Yeah, right. As I noted, there’s $7T in gold, total, half of which is owned by central banks, and there’s $160T in financial wealth to protect in the world. Even if gold went to $10K/oz there would be no more than $35 T in gold in private hands, and by that time, the gold in Fort Knox (or in the PBoChina vaults, etc.) would be enough to establish a gold-backed currency. Meanwhile, the Financial Elites would have lost all their financial wealth. Have they really transferred all their wealth out of all financial instruments and totally into gold and land? If so, then owns the $160T in financial wealth? » Read the full article
It’s the Deficits, Stupid!
by Rick Ackerman on April 18, 2011 12:54 am GMT · 55 comments
[My good friend Tom McCafferty is a veteran commodity trader and the author of numerous books about trading, including one of the very best primers available on the put-and-call game, Options Demystified. More recently, he has written several guest commentaries for Rick’s Picks, among them an upcoming piece in which he will reveal his top choice for all investables – an asset class that has the potential to pay big dividends for generations to come. In the essay below, Tom explains why he’s bearish on the economy – and on America – these days. RA]
Recently, I was asked why I wasn’t as bullish as some of my fellow traders. The market has gotten off to a respectable start for the year and I didn’t seem as excited as some of our group. Short-term, I was as mostly long, but long-term I was Smokey the Bear. These guys demanded to know why I was so low key. My answer of course was: “It’s all the deficits, stupid!” More definitively, it is all the obstacles that may prevent the United States of America from tackling the problems, i.e.:
• Bipartisanship—I don’t think this country has been so divided since the Revolution or the Civil War. Nothing gets done as all the politicians, special interest groups and powerful unions fight for their special interest and neglect the best interest of the overall population. » Read the full article