Monday, June 20, 2011

America appears primed for a political revolution, but will it happen?  Or are we too glutted with middle class amenities to put creature comforts at risk?  A similar theme permeated Will the Soviet Union Survive Until 1980?, an important essay published in 1970 by Soviet dissident Andrei Amalrik. Amalrik predicted revolution would come despite the seductive appeal of the middle-class life that many Russians were beginning to experience in the post-Khrushchev era.  With so many households so close to owning a Lada automobile, a washer/dryer and a color TV, why would anyone risk rocking the boat? The average Russian had lived like a serf for centuries, after all, and so the promise of significant improvements in the standard of living was no small thing. Such concerns may be no less relevant today in the USA, where the economy even in recession has sustained bourgeois luxuries at levels not far below the civilizational peak achieved in 2008, just before the Great Financial Collapse.  Indeed, even as joblessness mounts and the country continues to wallow in what has cynically come to be called The Great Recession, one needn’t leave the couch to enjoy a surfeit of bread and circuses that puts Rome at its most decadent to shame . However, and ironically, the escapist trash of reality TV has distanced huge swaths of the populace from reality itself.  In such a climate of hedonism and shop-till-you-drop hubris, the Founders’ concerns with liberty and the tyranny of government hold about as much interest as a philosophical treatise by Plato, Mill or Emerson. And yet, even for those who care more about Snooki and the Weiner affair than about the state of the union, there is no ignoring the by-now overwhelming stench emanating from Washington. We have watched the most liberal president in the

Yesterday, Rick was interviewed by Kerry Lutz of The Financial Survival Radio Network about The Hidden Pivot Method. Click here for the short audio presentation.

The continuous T-Note contract has traded well above the midpoint resistance shown in the chart, suggesting that April's show of strength was no fluke.  In fact, there is now the strong possibility of a further four percent rally. That would of course hold bearish implications not just for stocks, but for gold, Silver and the entire commodities complex.  In the meantime, it would take a selloff exceeding 122^04 to the downside to turn the hourly chart bearish.

The hourly chart suggests neither particular strength nor weakness in the weeks ahead. However, given the range the euro could traverse and still be within the confines of the last few months' price action, there is ample room to stoke the rumor mill as it pertains to Europe's inevitable financial decline and fall. The currency got a reprieve last week when Germany eased somewhat on bailout terms for Greece, but no one could actually believe that this will prove to be more than a stopgap.  Such considerations will tend to limit upside on the euro, but it will also temper the aggressiveness of euro bears, since an actual collapse, inevitable though it may be, has been forestalled yet again.

Friday's $15 spike early in the session appeared to be in consolidation for a second-wind burst to as high as 1554.50 over the near term. (It would be subject to midpoint interference at exactly 1544.60.)  It will take a little better than that, however -- a print at 1545.60, to be exact -- to refresh the short-term bull by exceeding yet another 'external' peak on the hourly chart. Night owls look for a low-risk boarding opportunity should seek camouflage on the five-minute chart, since that's where 'buy' signals were being generated on Friday afternoon.

All of last week's gratuitous ups and downs occurred beneath Monday's peaks, suggesting buyers are in no great rush to forge higher.  That said, there was a bullish pattern on the five-minute chart that projected to 36.475 over the very term -- a 57-cent rally above Friday's settlement. The midpoint resistance associated with that number lies at 35.980, so any upside breach of more than 2-3 ticks will be a positive sign; moreover, a move to the target would re-energize the bull trend on the lesser intraday charts, although not quite on the hourly.

Price action at week's end was moderately bullish for the near term, since the pullback that followed an impulsive upthrust was not sufficient to create an offsetting, bearish leg on the hourly chart. Even so, the follow-through so far has been feeble, and the futures will need to push above 1271.00, a Hidden Pivot midpoint shown in the chart, to seize the advantage.  Night owls may need to zoom down to the three- or five-minute chart to catch a ride, but there could also be a second opportunity if the futures pull back after slightly breaching the 1279.75 'look-to-the-left' peak shown. _______ UPDATE (1:59 a.m.):  DaBoyz have manipulated the futures eight points lower in an attempt to exhaust sellers ahead of Monday's opening. At the moment, there are no downside pivots as compelling as the conventional structural support at 1252.25 created by last week's low, but if it breaks down and the selling turns nasty, look for more weakness down to at least 1242.50. Day traders can bottom-fish that Hidden Pivot support with a stop-loss as tight as three ticks.