Wednesday, July 27, 2011

With the futures trading early Wednesday morning well above a midpoint resistance at 40.990, its 'D' sibling at 42.110 is well in play. That Hidden Pivot can serve as our minimum upside objective for the moment, but as I noted during yesterday's impromptu trading room, there are no external peaks remaining to 'camo' ourselves aboard the easy way. Night owls should pay heed at 41.110, a lesser 'D' target noted during the impromptu (15m, A=40.715 at 6:30 on 7/26); B=41.010, and C=40.815).

A new number for August Gold emerges in today's tout -- something to shoot for if and when a lesser target at 1652.00 promoted here earlier is realized.

Although pullbacks are tending to be nastier than our midpoint guideline would encourage, those extra inches and feet of downwardliness are obviously intended to inspire whatever doubts and disappointment are needed to thwart most of us from becoming effortlessly rich.  A clear target at 1652.00 remains my minimum upside objective nonetheless, but another, just as clear, at 1727.60 beckons if and when the lower resistance yields. That last Hidden Pivot is tied to a midpoint at 1595.80, so any seemingly ill-tempered retracement to it should be viewed as opportunity, not punishment.

I alluded in a recent commentary to a mining stock that I'd recommended for immediate purchase by my 91-year-old mother (who, by the way, has always been a great stock-picker).  The company I have in mind is Baja Mining Corp., and this is not the first time I've mentioned it. Back in March, when it was trading for 13 cents less than the current 1.31, I saw easy potential to 1.66 once it got above a Hidden Pivot midpoint at 1.31. This it did, but the stock has gone sideways since, presumably developing thrust for the push to at least 1.66.  My renewed interest in Baja is not based on technical considerations, however, but on the phone call I received from the analyst who touted it to me originally. This is no hot tipster either; rather, he's one of the most knowledgeable and thorough analysts I know, and I completely trust him when he says Baja offers great value. The company's "story" remains as bullish as ever, says the source, and that's why it appears in today's list of touts. Incidentally, Pivoteers may notice that the tip of Monday's spiky rally offers great camouflage relative to the May 10 peak at 134.50 that it surpassed. You can buy the cautiously if you wish, but officially the recommendation is to buy a thousand shares market-on-open. _______ UPDATE (5:21 p.m. EDT):  We bought 1000 shares on the opening for 1.32. For now, do nothing further. Please be aware that if the stock breaches a midpoint support at 1.20, it could fall to as low as 1.14 in search of traction.

Our elected leaders need only look at the chart below to see how the budget stalemate will turn out.  Gold has been rising at an exceedingly steep pitch since early July, implying that whatever deal emerges from the sausage factory on Capitol Hill, it will not much affect the ongoing destruction of the dollar that began in earnest in 1913 with the creation of the Federal Reserve System. The Fed, as we know, was charged with conducting monetary policy and supervising the banking system. However, events of the last few years have allowed the central bank’s directors to expand its mandate to….as Buzz Lightyear would put it, infinity and beyond. The dire implications of this for the U.S. dollar have not been lost on bullion investors and traders, even if conventional thinking would deign to suggest that precious-metal prices have come too far, too fast. But compared to what? Over the last decade, bullion has outperformed just about every asset class you can name. The fact that it is now moving away from the pack of investment also-rans suggests not that buyers have run amok, but that the destruction of the dollar has entered a new and perhaps cataclysmic phase. What will replace the dollar when it utterly fails, as it must? Although gold may not pass political muster right now as America’s and the world’s next choice for money, no one can be certain that it won’t be drafted into the role.  After all, how many tried and true alternatives are there? In the meantime, we think the bull market has barely gotten started and that penny stocks that have languished for years will trade at ten or perhaps even a hundred times their current values before the bull has run its course. We’re so confident about this that

Writing on the imperial presidency, George Will's most recent column is as good as it gets:  'Congress Reminds Obama He's President, Not King'.  Click here to access this gem-of-an-essay.

Congressional wrangling over the debt limit has made the markets jittery lately, providing us with an excellent opportunity to look for day trades in a more or less trendless flux. We spent time on the intraday charts of the E-Mini S&Ps, then segued to the Dollar Index, which was in the throes of a steep rally. A highlight of the session was a detailed explanation of the bullish butterfly spread in Silver Wheaton that we'd been attempting to leg on as the stock swung wildly from ebullience to despair.