Monday, August 1, 2011

Obama the Pessimist

– Posted in: Free Links Rick's Picks

Notable and quotable, from a Wall Street Journal essay penned by Fouad Ajami: "Temperament mattered. Ronald Reagan was the quintessential optimist, his faith in America boundless. He had been given his mandate amid economic distress—the great inflation of the 1970s, high unemployment and taxation—and a collapse of American authority abroad. Through two terms and a time of great challenges, he had pulled off one of the great deeds of political-economic restoration. He made tax cuts and economic growth the cornerstone of that recovery. Economic freedom at home had a corollary in foreign affairs—the pursuit of liberty, a course that secured a victorious end to the Cold War. The 'captive nations' were never in doubt, American power was on the side of liberty. "By that Reagan standard, Mr. Obama has been a singular failure. The crippling truth of the Obama presidency is the pessimism of the man, the low expectations he has for this republic. He had not come forth to awaken this country to its stirring first principles, but to manage its decline at home and abroad. So odd an outcome, a man with an inspiring biography who provides no inspiration, a personal story of 'The Audacity of Hope' yielding a leader who deep down believes that America's best days are behind it." To access the full essay at freerepublic.com, click here.

SIU11 – September Silver (Last:39.420)

– Posted in: Current Touts Rick's Picks

For a nice change, despite the fact that Silver futures are getting pounded tonight,  Silver Wheaton shares are refusing to confirm.  Be that as it may, we'll hew to the 38.285 correction target of the pattern shown as a minimum short-term objective.  It is a bearish sign for the very near term that the 39.345 midpoint support associated with that number has been exceeded Sunday night by a decisive five cents. The target is too close to the 38.215 low recorded on to bottom-fish with our usual penny-ante stop-loss, but I'd encourage traders to look for the camouflaged turn -- and possible trading opportunity -- from around 38.300 on down. To rout the bears --badly -- buyers would need to push this vehicle above 39.970 today without having let it fall to the 38.385 target.

ESU11 – September E-Mini S&P (Last:1292.50)

– Posted in: Current Touts Free Rick's Picks

I'll update Sunday night, since anything could happen, but as of Friday's close the futures looked like they were developing thrust for  a push to a Hidden Pivot at 1307.50. That would be equivalent to a Dow rally of about 120 points, but it would not necessarily mean a blessed thing. The midpoint resistance lies at 1296.50, and the futures would become and odds-on bet to continue to the target if they can exceed that number by a point or more. ______ UPDATE (10:41 p.m. EDT):  With a political deal in place, things are going exactly as forecast.  The futures opened Sunday night on a short-squeeze gap through the 1296.50 midpoint, making a follow-through to at least 1307.50 a near-certainty.  The actual high so far tonight is 1309.50, equivalent to a Dow rally of about 140 points, but if the futures poke above last Thursday's bull trap peak at 1313.00 they could put bears on the ropes for at least another day or two. Trading should be via camouflage only at this point, but it should be noted that tonight's rally is NOT impulsive on the hourly chart, since it has not exceeded any external peaks.  Although I hesitate to describe this knee-jerk hysteria as weakness, the failure of the upthrust to get past 1313.00 on the first try tells me the rally is not likely to last.

GCZ11 – December Gold (Last:1629.90)

– Posted in: Current Touts Free Rick's Picks

I'd take it personally if the futures don't reach the 1650.30 target shown.  It's just that pretty. And there's even room for a cherry on top, since a 1652.60 target will be in play if the first number is exceeded by more than two ticks. The midpoint with which it is associated lies at 1627.70, and it was surpassed with such ease on Friday that we shouldn't doubt that bulls have the moxie to supply a finishing stroke to the rally pattern Sunday night or Monday. _______ UPDATE (11:09 p.m. EDT) Price action has become so nasty and tiresome that it is almost killing.  With vicious shakedowns occurring almost daily within a tireless bull market, it's reached the point where I'd have to update four times daily just to play gold's stupid little game. Most immediately, it implies slippage to as low as 1596.00 if a 1607.90 midpoint gets trashed. (30-minute, a=1632.00 on July 29 at 1:30 EDT), B=16-8.20, C=1619.80). _______FURTHER UPDATE ( 11:01 a.m. EDT): Hooray.  The futures reversed overnight in bullish fashion from 1608.20, three ticks from the midpoint noted above.

Watch for a Bull Trap

– Posted in: Free Rick's Picks

If a political deal is barfed up before Monday's night's supposed deadline, stocks will have nowhere to go but up.  This will not be because traders think the deal is bullish for the market or the economy, but because they expect other traders to react as though it were.  Since nothing could be further from the truth, we should expect the rally to be over rather quickly.  My hunch is that it would be a good short sale with the Dow up between 100-120 points, but if we're going to do any actually shorting it should be based on a Hidden Pivot target or midpoint. It is for such a purpose that you should keep my target for the E-Mini S&P in mind.  The one I've proffered comes from the five-minute chart, since there are no big-picture Hidden Pivots that work.

As Housing Slump Deepens, Rental Market Booms

– Posted in: Commentary for the Week of March 8 Free

Vacancy rates here in Denver are as low as they’ve been in more than a decade, pushing rents sharply higher even as the housing market continues to slump.  This reportedly is happening all over the nation as tightened mortgage-lending rules move home ownership beyond the reach of millions of would-be buyers.  Many of today’s renters could probably have qualified for mortgages under the loose standards that obtained just a few years ago.  These days, however, even if they could get their hands on the money, a growing number of would-be homeowners are passing up the American dream in order to avoid the hassles and expense that come with it. So many are doing this, in fact, that they’ve even sparked bidding wars for rental units in Colorado and elsewhere. We heard about this from the bank president of a local branch, a 27-year-old who owns eight rental properties and first became a homeowner himself when he was 19. He said that demand for rentals is so strong these days that he no longer even has to advertise properties to get them leased quickly; word of mouth is all that’s needed.  Run a rental ad on Craig’s list, he says, and in just a day or two you’re swamped with applications. And in numerous instance where apartment-hunters have shown up, only to learn that a unit had already been rented, they’ve offered to pay more for it -- much more. Just recently, the banker said, a guy offered to pay $1450 a month for an apartment that had just been rented for $1300. Some are willing to sign extended leases for two, three or even five years, the banker said, but with demand so strong, there’s little incentive for landlords to accommodate. “Honey, Let’s Sell the House…” Who’s doing the renting? 

SLW – Silver Wheaton (Last:36.08.)

– Posted in: Current Touts Free Rick's Picks

These are interesting times for Silver Wheaton, for sure. The stock played toe-sies on Friday with a very important trendline that I'd said was in play. My hunch is that it will hammer the support for a bit more this week but eventually come out on top. To remove the forecast from the realm of speculation, however, it will take a thrust to at least 42.90 to turn the daily chart bullish again. That's a tall order, but it hardly strains logic to assume the stock's best days lie ahead, not behind. We shall see, but whatever the case, we'll continue to hold four Sep 42 calls for 1.32 and four Sep 50 calls for 0.26.  Our goal is to complete the butterfly spread by shorting eight Sep 46 calls for 0.79 or more, giving us a risk-free play on a bullish rest-of-the-summer.

USU11 – September T-Bond (Last:128^05)

– Posted in: Current Touts Rick's Picks

While a scare-mongering news media continues to assault common sense with ceaseless blather about all the terrible things that are going to happen if Democrats and Republicans don't come to terms by midnight Monday, bond traders have been partying up a storm.  Who are you gonna believe?  If the steep uptrend in the September T-Bond is any indication of what's coming, the deadline is going to be the biggest non-event since Kohoutek streaked across the sky. Not that Brian Williams et al. will have noticed. T-Bonds hardly look worried and could continue to as high as 130^00 over the near-term, according to my technical runes.  Not exactly a harbinger of a default disaster.