Friday, October 7, 2011

The futures took off just as we were examining a promising trade set-up during Thursday night's Hidden Pivot webinar.  It was exciting, sort of, since the thrust looked pretty potent on the three-minute chart that we were pondering.  It was somewhat less impressive on the hourly chart but nonetheless promising for the fact of moving December Gold toward the 1693.10 target of the pattern shown. Its midpoint sibling lies at 1644.90, and although there was an obvious struggle at the level, tonight's rally appears to have blasted free of its gravitational pull. Regardless, we should continue to use 1705.00 as the threshold of a bullish breakout worth enthusing over. Short of that, an impulsive push to 1675.60 would refresh the bullish potential of the hourly chart by exceeding the one-off peak shown. All of these price points are shown in the chart.

Yeah, I know you depend on me to not play hunches, but I can't shake the gut feeling that this rally is just a dead-cat bounce.  In any case, to reckon the odds in the coldly mechanical way that is our forte, we should remain skeptical unless the crime syndicate that is behind this squeeze can push the December contract, without taking a breather, above the 88.24 peak labeled in the chart.  This is shown hypothetically in the chart.

The rally peaked a single point above our 1153.75 target, then pushed up to a nominal new high after noodling around for most of the day. Short-squeeze dynamics obviously still obtain, but I'm not going to try to predict how all of the wicked crosscurrents in motion now are likely to play out on a Friday, when slapstick traditionally reigns. The pattern shown in the chart is far more elongated than those I tend to like, but I am proffering it anyway on the strength of the sibling resmblance between k-A and the b-c correction.  It yields an 1168.00 target, but I'll leave it to your daring, cunning and imagination to find a way to make hay with that number.

The Jewish High Holidays will conclude Saturday at sunset.  May those of you who observe Yom Kippur, the Day of Atonement, have an easy fast!  Touts and commentary for Monday will be out by Sunday night as usual.

We can’t recall ever having spoken a kind word about Barack Obama, nor do we even imagine him capable of saying or doing something that might bring us around. However, we do not – repeat, do not – blame him for the terminal state of the economy. It was headed irretrievably into a Second Great Depression long before he took office, and the things he has tried so far to forestall a day of reckoning are, for the most part, the same things that any president, Democrat or Republican, would have tried. Nothing would have worked, of course, because the deflation that the U.S. and the rest of the world have been trying so desperately to counteract is drawing irresistible force from an imploding derivatives bubble valued notionally at nearly a quadrillion dollars. Small wonder, then, that a relatively puny stimulus effort amounting to mere trillions of dollars has bought us only time, not growth, and done so in a way that will burden future generations with more debt than they will be able to service, let alone repay. To be sure, a solution has always lain well outside the boundaries of political discussion. The best we could have hoped for was a legislative sausage pleasing to the tastes of Harry Reid and John Boehner alike.  But nothing those two could conceivably have agreed on would have brought the economy around. Nor would a change at the top have helped.  Put someone else in the White House not handicapped by Mr. Obama's timidity, incompetence and cluelessness – New Jersey Gov. Chris Christie is our idea of the right guy for the job – and even he would have failed to slow the country’s slide into deepest recession, let alone reverse it. For in fact we face 30% unemployment, a wave