November 2011

Chat-room buzz over the weekend seemed mildly fearful of a stock-market collapse this week.  One poster said that if it did not occur on Monday, shares would simply head higher; another gave the impending disaster an entire week to get rolling. We see nothing so threatening in the charts, although there has been a perceptible quickening of the drumbeat for a pre-emptive strike on Iran's growing A-bomb capability.  Were that to occur, sending the price of oil to $200 or more overnight, we would surely rather be short the market -- for the remainder of the decade --than long.

Stocks came roaring back to end the week on an ebullient note, supposedly encouraged by the latest evidence that Europe is finally putting its financial house in order.  While the New York Times resisted the temptation to spread this drivel across the top of its weekend editions, the Wall Street Journal eagerly took the bait, offering up the following headline:  “Europe Pulls Back From Brink”.  Time for a victory lap for Europe?  Not so fast. While we’d like to think that somewhere in the nearly 800 words that followed, the four Journal reporters credited with writing this mush-up would have provided some further details of the latest “plan” to “save” Europe, no such details were forthcoming. As far as we could determine, the manic buying spree that lifted the world’s bourses on Friday took its inspiration from whatever ephemeral hopes attach to the political ousters of top leaders in Italy and Greece. Perhaps that’s why the Journal went no deeper than a single quote from some hedge-fund dorkwad  to substantiate the premise of a headline saying that Europe had “pulled back” from the brink. Here’s the quote, in case you, too, are looking for a reason to buy stocks come Monday:  “Hope for better management in Greece and Italy is causing the market to breathe a bit of a sigh of relief.” That’s it. Re-read the story a dozen times and you’ll find no further explanation. Recall that earlier in the week, the speculators and algo traders who have come to dominate the world's bourses sold the Dow Industrials down nearly 400 points in the space of a few hours,  joining in a global avalanche that caused hundreds of billions of dollars worth of valuations to evaporate. So why the sudden leap of faith on Friday?  We’ll probably never know.

A 1305.25 rally target drum-rolled here earlier is still a logical minimum objective for the near term.  Trend-trading is limited to the very lesser charts, and so I'll suggest that camouflageurs take their cues from such look-to-the-left peaks as are evident in the accompanying chart.  _______ UPDATE:  The futures made their intraday low at 1243.50, two ticks from a bearish target at 1243.00 posted in the chat room shortly before noon EST, when the December contract was trading around  1255.  As I noted at the time, the weakness should be viewed as an installment on some bearish, bigger-picture targets below 1200.

Turgid action at the bell suggests stock are likely to be subdued as the week draws to a close. That was certainly the case early Thursday evening, with bullion and index futures little changed.

The futures had recouped most of Thursday's bearish impulse leg at the bell, but they'll need to rally above 34.810 today to equalize the give-and-take between bulls and bears ahead of the weekend.  More bullish still would be a close above 34.990, since that would put in play the 37.870 target of a larger pattern begun on October 20 from 29.935.

Yesterday's bullish turn came from $2.40 above a 1734.20 downside target, but the bullish implications of this will not be 'actualized' until such time as the bounce achieves a minimum 1780.30 today.  That's not quite an 'external' peak on the 30-minute chart, visually speaking, but it'll do for purposes of reckoning impulsiveness on the lesser charts. Night owls should plan on bottom-fishing at the 1743.70 midpoint support shown if the opportunity arises.

Yesterday's pooch-screwing was centered mainly on a 1237.50 midpoint resistance that's associated with a 'D' target at 1250.25.  Although I won't pretend to care which way things go -- it is a Friday, after all -- I'll mention that the look-to-the-left peak at 1246.50 shown in the chart could provide an excellent 'camo' opportunity to get long if there's a rally that stalls and pulls back from somewhere between it and the more obvious high at 1249.25.   The November 16-17 Webinar will be held much earlier in the day in order to accommodate students from Europe who would otherwise be in session in the middle of the night. Both segments of the two-day class will begin at 5 p.m. London time. Click here if you’d like further details, along with a $50 discount.

The good news is that Silver Wheaton appears to have a 15% rally ahead that will be well nigh unstoppable. Push and pull will combine to lift the stock, respectively, via a Hidden Pivot rally target at 40.70, but also via the magnetic attraction of a trendline that has figured prominently in the SLW's ups and downs for more than a year.  A two-day close above the trendline should suffice to set it on its way toward new all-time highs, but until that happens we should not take for granted that bulls still rule.  The 36.49 midpoint resistance of the pattern shown has already been exceeded by a whopping 89 cents, lending weight, if not quite certitude, to the 40.70 target that sits, as of today, just above the trendline.

Groupon’s $700 million IPO last week proved that thieves and lunatics, working hand in hand and impelled by naked greed, remain a dominant force in today’s markets. With America rapidly on its way to becoming Nickel-and-Dime Nation, perhaps those who snapped up 35 million Groupon shares at huge premiums on opening day knew what they were doing? We were reminded of Groupon’s visceral appeal this morning when we opened a G-mail from them promising $5 off the next Groupon purchase.  Had we known this opportunity-of-a-lifetime would be sitting in our mailbox when we awoke, we would scarcely have slept the night before.  Imagine what the company would be worth if it can sell just one $10 Groupon to each and every Chinaman. If and when that happens, and assuming the Chinese don’t rip off the idea first, Groupon at $28 per share may turn out to have been a steal. Or perhaps not. There is always the chance that Google will come along, even before the Chinese have stolen the idea, and do it better themselves. Google, as everyone knows, does whatever it is doing better than just about any other company. That is why Microsoft’s Bing! search engine isn’t even in the race, despite ginned-up statistics that would have us believe the product is quickly saturating its market.  In fact, Bing! has gotten as far as it has only with a huge, artificial boost from Microsoft’s weekly laxative of security patches, gratuitous updates and other bitware effluvia. Turns out that one of those updates stealthily inserted a Bing! search field into Firefox’s tool bar, and that it takes a registry hack to get rid of it. (Warning: Half-measures will only allow Bing! to return again and again and again, like the proverbial bad penny.) If you want to know