September 2011

SIZ11 – December Silver (Last:30.840)

– Posted in: Current Touts Free Rick's Picks

Silver's main bearish pattern is aiming for a re-test of the recent low and possibly for a final low of 18.965.  The midpoint of the pattern is at 26.275, just above the correction low of 26.150, which is our "B" point.  This midpoint is no more hidden than the one on the gold chart, where the pattern is very similar.  This could change in either or both cases, should the "C" point be re-set higher and a decline ensue.  In that event pivoteers should recalculate and take another look at how well hidden "P" is, with an eye to buying it.  If silver's current "C" holds but the midpoint doesn't, the 18.965 target should not be considered outlandish, as it would represent only a slightly larger percentage decline than that which occurred in 2008.  (Posted by Doug "harry" McLagan)

GCZ11 – December Gold (Last:1629.10)

– Posted in: Current Touts Rick's Picks

Gold is in the process of pulling back substantially from its recent all-time high, but it appears very unlikely that the bull market has ended.  The current decline is thus far the third-largest of the ten-year uptrend, in percentage terms, having narrowly exceeded 20%.  The weekly logarithmic chart makes clear that the upward thrust which began at 1478.30 on July 1, and which preceded the current pullback, was much smaller than the sharp rallies which came before the two larger corrections of 2006 and 2008.  One implication of this fact is that gold has not passed through the kind of blow-off top that is likely to bring the bull market to an end.  Another possible implication is that the downside from here is limited.  The most prominent bearish pattern begins at 1819.40, and the BC retracement is already more than half of the impulse wave, putting the midpoint exactly two dollars above the 1535.00 low, which serves as our "B" point.  As such, we might see a re-test of that low, and we might expect it to survive.  If it doesn't, the "D" target of 1394.80 will come into view.  The eventual low of this pullback will become the "C" point of a large pattern which must be reckoned to begin at 681.00 three years ago.  As things stand, this large but still tentative pattern targets a high at the memorable level of 2777.70.  (Posted by Doug "harry" McLagan)

My Barber Shares His Wealth Secrets

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

(Louis Piro is an investor from the old school, a guy who innately understood that there were no shortcuts to building wealth.  His approach may seem almost quaint in an era of instant IPO billionaires, but --  who knows? -- it may yet come back into vogue. Piro was my barber when I lived in Mountain View a decade ago, and his story originally appeared in the Sunday San Francisco Examiner during the dot-com boom of the late 1990s. I republish it here every couple of years because the advice it holds for investors remains timeless. RA] If there is a single word to sum up the success of investor Louis Piro, that word is "dull." Piro has never made a killing on a stock.  He doesn't play hunches and he runs from hot tips.  He says he passed up Pfizer not long ago because its shares were too pricey even before impotent men started flocking to their Viagra pill for a cure. Nor will Piro sell anything from his portfolio.  He just keeps buying -- and then only with money he knows he won't need any time soon.  He adds stock whenever the price drops substantially. Piro shuns companies that sell products or services he can't understand, and he has never even owned a share of a Silicon Valley upstart. His favorite word -- "dividend" -- could be the mantra of a successful hypnotist.  Zzzzzzzz.  Finally there is this pearl, the cliché that underlies nearly every investment decision that Louis Piro has made in the last 45 years:  "Buy shares in companies that will grow with America." ‘Build a Little Nest Egg’ That Piro, 63, could have amassed considerable riches by following such homely rules is probably not unusual.  What is striking, however, is the remarkable degree of his

Magnifying Mistakes

– Posted in: Tutorials

Bullion and the broad averages were nearly comatose when we looked in on them this morning, so we spent the hour, not hunting for the usual, easy trades, but peeling back layers of visual clues to see how we might have jumped into some losers. The Dollar Index in particular proved fertile ground for mistakenness. Students may find themselves agreeing that the way in which we were able to find, in retrospect, a rationale for having avoided trouble is one of the subtler teachable moments in the recorded library.

GCZ11 – December Gold (Last:1589.70)

– Posted in: Current Touts Rick's Picks

A Hidden Pivot support at 1570.80 is still our minimum downside objective and looks likely to produce a tradable bounce.  However, its failure would portend further slippage over the near term to as low as 1462.40, its D sibling.  There is one more number we need to incorporate into a very worst-case scenario:  1395.90, a 'D' target that comes from the uppermost possible point 'A' of the bear cycle shown in the chart.  Its sibling midpoint lies at 1537.50, and although that number may already be magnetic, it will be of little value for bottom fishing because it closely coincides with the September 26 low, 1535.00.

GOOG – Google (Last:528.28)

– Posted in: Current Touts Rick's Picks

Google has been marking time for more than six weeks, but unless it can pop above the 558.52 high recorded on September 20, a fall of at least 10 percent to the 478.88 target shown will remain in prospect. The stock has thus far held its ground near the midpoint support, but the failure of Tuesday's short-squeeze rally to stay aloft may force the hand of the stock's institutional sponsors.

HUI – Gold Bugs Index (Last:519.88)

– Posted in: Current Touts Rick's Picks

The selloff begun a week ago is closing on an important midpoint support at 512.14 that closely coincides with an important structural support at 512.25 recorded on August 5. A bounce from the range seems very likely, given its doubly supportive price points, but we'll need to scrutinize each phase of it on the lesser charts to accurately assess its strength.

ESZ11 – December Mini S&P (Last:1145.00)

– Posted in: Current Touts Free Rick's Picks

The futures are currently trading around the exact middle of the distribution zone formed by the wild price swings of the last six weeks. As such, there are no especially appealing swing trades in the offing, only whatever scalp-worthy opportunities can be extracted from the very lesser charts. Most immediately, that implies night owls can look for a turn from the 1140.00 midpoint support shown in the chart. If it doesn't come, however, the next logical spot for initiating a long position (via camouflage, hook, or crook)  would be at 1130.50.  A bigger picture suggests that the futures will want to come down to the 1088.75 midpoint of the ABC downtrend begun from July 22's  1341.75 high.  Want to learn how to nail swing highs and lows precisely, and to manage trade risk yourself? Click here for information about the upcoming Hidden Pivot Webinar on October 5-6 and a $50 discount.

A Happy, Healthy New Year…

– Posted in: Free Rick's Picks

...to all who celebrate the Jewish Holidays.  In observance of Rosh Hashanah, which begins Wednesday evening at sundown and marks the start of the year 5772, I will not be updating touts for Friday.  However, a fresh commentary will appear, and Doug 'Harry' McLagan will be posting timely analysis to finish the week for Gold and Silver futures.

Savage Competition in Electronic Gadgets

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

With only a handful of players savvy enough to compete in the major leagues of tablet computing, competition has nonetheless erupted that is likely to hearten consumers, especially those who have tired of paying exorbitant prices for gadgets bearing the Apple logo. Yesterday, it was Amazon that stepped into the ring -- with Kindle Fire, a $199 tablet that will sell for less than half of the cheapest Apple model. The 7-inch display is only half the size of Apple’s, but as Hewlett Packard’s close-out sale for a similar device proved, buyers are willing and eager to forsake Apple products if the price is right. To be sure, Amazon has targeted the lower end of the market with a tablet that cannot do all of the tricks that iPad is capable of.  It lacks an embedded camera and microphone, for starters, and there is no 3G cellular connection, only Wi-Fi.  Give Amazon a little time, however – perhaps eight to twelve months -- and a fully-featured product will be able to go head-to-head with Apple’s best, but with the kicker of Amazon “content” to make it more than merely competitive. Amazon’s announcement, presented by CEO Jeff Bezos with Steve Jobs-like flair, comes on the heels of an announcement that Dish, through its recently acquired Blockbuster unit, will offer streaming movies and TV shows to compete with Netflix. Recall that Netflix shot itself in the foot last month with a horrific new pricing scheme that elicited a firestorm of protests from subscribers and enough cancellations to cause NFLX shares to collapse. Since July, they’ve fallen from $305 to a recent low of $125, or nearly 60 percent. Netflix founder Reed Hastings, who even now probably still doesn’t get it, responded with some pro forma blather about how he is sure Netflix