Tuesday, September 20, 2011

This past Saturday, Rick Ackerman was interviewed by Al Korelin of The Korelin Economics Report. During the interview, Rick discussed the economy and offered his views on the gold market. The full eight-segment show may be heard here.

Shortly after 1 a.m. EDT, Gold was up and index futures were down, but it would hardly be shocking if both trends were to reverse before trading begins in New York.  I've provided downside targets in bullion but none for the E-Mini S&Ps, which have become almost too boring to watch.

Apple is streaking toward a 447.02 target that can be used by long-term bulls to lay out option hedges, perhaps in the form of covered writes. We may also try to leg into some bearish butterfly spreads if and when the target is closely approached. One further possibility would entail initiating longs using 'camouflage' on a pullback to the 400.02 Hidden Pivot midpoint of the pattern. ______ UPDATE (September 26):  We'll keep this trade in mind even though the stock is no longer "streaking" toward the target, but inching. _______ UPDATE (October 2):  We'll try another time.

The Dollar Index has decisively exceeded a Hidden Pivot target at 77.44, but it will take a little more than that -- specifically a push above the 'external' peak at 78.87 shown in the chart -- to clinch the bullish case for the intermediate term (i.e., the next 3-5 weeks).  To qualify as a valid impulse leg on the weekly chart, the move from this point forward would need to be unbroken -- i.e., lacking a B-C pullback that is discernible on the weekly chart.

A downside target at 38.400 flagged here earlier is still my minimum retracement objective for the near term.  I've suggested tightly stopped bottom-fishing there, or better yet, camouflage buying, but please note that this Hidden Pivot's decisive breach would portend more weakness down to as low as 38.015, a second Hidden Pivot that could prove opportune for bargain hunting.  The patterns associated with both targets are shown in the accompanying chart.  Alternative, the futures would need to print 41.505 today to turn the tide for bulls. 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.

I called up a 240-minute chart to try to prioritize numerous corrective abc patterns that could send Gold prices at least somewhat lower in the days ahead. Most immediately, we should use 1750.10 as a minimum retracement objective. The pattern associated with that Hidden Pivot support is shown in the chart.  However,  its decisive breach would put a more important Hidden Pivot at 1709.20 in play.  That's a high-odds number where we could plan on buying aggressively, since it was confirmed by yesterday's bounce almost precisely from its midpoint sibling at 1771.50, a downside target drum-rolled here last week.  Alternatively, the December contrct would need to touch 1840.10 today or tomorrow for bulls to take charge. That's a tick above a small peak made last Wednesday on the way down.

Now in its sixth week, this excruciating distribution of stocks in a very probable bear market could induce seasickness in anyone tracking it too closely.  Moreover, although the ups and downs seem slavishly mindful of Hidden Pivot supports and resistances, price action seems to be getting increasingly difficult to leverage with the usual camouflage tactics. We can deal with this by simply looking for subtler price reversals, but we shouldn't expect to catch the next big-but-fleeting leg down in the Mother of All Bear Markets. For the moment, catching anything will require diligent attention to the lowly one-minute chart, on which a potentially shortable pattern (or perhaps a minor swing point worth bottom-fishing) is developing as I write these words.

[This commentary drew such a heavy response Monday in the Rick's Picks forum -- 60 posts so far -- that I am letting it run for a second day. RA] We lean strongly libertarian on the issues of the day, especially when debating those who would raise taxes to feed the insatiable maw of Government. So why are we rooting for the revenuers in their battle to squeeze more tribute from the customers of retail giant Amazon?  That’s right: We’re hoping the company loses its knock-down, drag-out battle to avoid collecting taxes for cash-strapped states, even if it means online shoppers will ultimately pay billions more for their purchases.  The states want Amazon to collect and remit taxes wherever the company sells merchandise and irrespective of whether it has a physical presence where the sales are conducted. In the long run, we would argue, it will be better for consumers to go along with this than letting them continue to buy untaxed goods online.  In the end, leveling the retail playing field between virtual and brick-and-mortar sellers in this way will help avert the day when Amazon and other globally scaled sellers have driven most of their brick-and-mortar competitors into the ground. Such an outcome may be more likely than shoppers might care to imagine, as the chart of Best Buy (below) suggests. Shares of the big-box purveyor of consumer electronics, computers and appliances have fallen by half since last November, when they traded for as much as $45, and recently touched a three-year low of $22 on weak earnings.  To be sure, the Great Recession has played a significant role in the collapse of Best Buy’s once high-flying stock. But with the firm’s release of dismal sales figures for Q2, analysts have begun to question whether the retailer is becoming