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From the monthly archives:
August 2011
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It was stumble-step-step-stumble yesterday, but because the futures got past a minor Hidden Pivot resistance I’d flagged at 1215.00, they should be presumed on-track for a run-up to 1241.00. The action was so erratic that there will probably be little value in my suggesting a camouflage strategy for Tuesday night. In fact, the futures were weakening as we went to press, and a further 10 points of downside from here, exceeding a prior low at 1192.00, would turn the hourly chart bearish.
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[Our longtime friend Tom McCafferty, a veteran commodity trader and author of numerous books on the subject, knows a thing or two about making hay when stocks and commodities turn volatile. In the essay below, he explains why the markets have been so nervous lately. Fortunately, in the violent swings that have been occurring from day to day and week to week, he sees the trading opportunities of a lifetime. RA]
Recently, Rick did some of that great technical analysis he is known for, and after he studied the formation the bones made on his sacred cloth and cut open a few toads to check their entrails, he came to the conclusion that the Dow Industrial Average is headed for a bull rally. Next we took a look at the fundamentals – the European banking situation, upheaval in Africa, labor problems and loss of competitive edge in China, the U. S. job and housing markets—and we grew very bearish. In other word, today’s Market is like a Joyce poem: you can read into it just about whatever you want.
We become further confused when we see so many strong companies sitting on tens of billions of dollars, and, at the same time, they are laying off staff. With their fat bankbooks, there are just too many of them striving to get leaner and meaner. On top of that, quarterly earnings are pretty damned good. We needed a good reason for this behavior. » Read the full article
Our Needs Establish ‘Intrinsic’ Values
by Rick Ackerman on August 31, 2011 12:01 am GMT · 52 comments
[In the essay below, Rick’s Picks forum regular Robert Moore explains why a resource so very abundant as silicon could have value, but also why, like so many other physical things, most particularly gold, it is continually increasing in value relative to the U.S. dollar. RA]
Why all this recent focus on value? There is so much banter and opinion circulating today about “intrinsic value.” Most often, I see the term being applied to competing monetary instruments: Gold versus government-issued paper currency. Everyone insists that their monetary instrument of choice somehow has more intrinsic value than the competition. While I find these arguments entertaining, I can’t help but dwell on the fact that both points of view are completely short-sighted and arbitrary, to wit: 1) Gold has value as an electrical conductor that does not corrode. In fact, a ship wired with Gold would be able to sail the oceans for millions of years. This makes Gold vastly superior to copper, which corrodes and loses its conductivity exceptionally fast in the presence of saltwater. Now, just imagine an entire Internet wired with Gold — such a knowledge base would be nearly as timeless as the Universe; and 2) paper has intrinsic value in the fact that if we did not produce it, there would be far more trees around, and therefore less atmospheric CO2. So, paper is incredibly valuable to those who wish to preserve the fear factor that humans are destroying our planet via climate change. » Read the full article