November 28th, 2014
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Weekly Commentary

If DaBoyz can squeeze a 500-point Dow rally out of yesterday’s administered easing of dollar “swap” rates, just imagine what they can do with a little Santa seasonality and a dollop of year-end window-dressing.  Let’s be straight about a couple of things. First, no one expects the latest easing of global credit lines to resolve Europe’s debt crisis. And second, the 800 points the Dow has tacked on this week represent little more than trading machines masturbating each other amidst a short-covering panic. Some observers merely yawned, noting that the swap arrangements that make it easy and cheap – and now even easier and cheaper, if such a thing were imaginable — for foreign banks to borrow dollars have been in place since 2007.  However, others saw the announcement by the central banks as nothing less than a bold step by the Federal Reserve to begin monetizing the debt of Spain, Italy, Greece, France et al.

It’s a moot point whether the U.S. has begun bailing out Euro-deadbeats, however, since the U.S. is a deadbeat itself, albeit one in sole possession of the world’s reserve currency and therefore of the ability to gin up unlimited quantities of the stuff at will. Meanwhile, there’s little point in pretending that the U.S. is somehow not immersed in the bubbling cauldron of toxic global finance. U.S. banks had stopped lending to their European counterparts, and that’s why the Fed stepped in to pretend it has the situation under control. This may work for another week or so, if that long, but it’ll be interesting to see whether reducing swap rates to near-zero will help suppress sovereign borrowing rates that recently topped the 7% “red zone” for Italy. Would you lend the Italian government hundreds of billions of dollars at 7%? That’s what we thought. But if you live in Europe or the U.S., you’ll be doing it anyway – and for a lot less than 7% –courtesy of the bankers.

A Hyperinflationary Step?

Not to spoil the party, but we’d suggest keeping a close eye on T-Bond futures rather than on a criminally insane Dow Industrial Average that has obviously run amok.  U.S. Bonds and Notes have been in a sharp correction, with the former closing on a key Hidden Pivot target of ours at 140^14.  The target is so clear and compelling that its breach would offer strong evidence that the Fed’s increasingly desperate attempts to hold deflation at bay are about to finish the dollar’s destruction since the Fed was created nearly 100 years ago.  We’re planning on bottom-fishing near the target (click here to join us – at no cost to you), but if it the “hidden support” is exceeded even slightly, it could be signaling a significant global increase in inflationary pressures.

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TODAY'S ACTION for Thursday

Bankers’ Best-Laid Plans

by Rick Ackerman on December 1, 2011 5:29 am GMT

The markets were suspiciously subdued Wednesday night, but don’t be surprised if buyers are back on Thursday to pursue their bliss.  It ishardly implausible that those who planned yesterday’s liquidity announcement did so on a Wednesday because they believed it might be too ambitious to get a short-squeeze going as early in the week as Tuesday.


Rick's Picks for Thursday
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ECZ11 – December Euro (Last:1.3460)

by Rick Ackerman on December 1, 2011 3:14 am GMT

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ESZ11 – December Mini S&P (Last:1244.25)

by Rick Ackerman on December 1, 2011 3:25 am GMT

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GCG12 – February Gold (Last:1749.60)

by Rick Ackerman on December 1, 2011 3:38 am GMT

February Gold (GCG12) price chart with targetsWe’re long  two contracts, from an initial position of four, with an effective cost basis of 1733.00. Look to exit one of those contracts at 1758.00, a few ticks below the ‘D’ target of the ‘camo’ pattern we used to get on board. (Note: Initial entry was via the December contract, but we rolled the position intraday into February.) Since we’re swinging for the fence on this trade, I’ll suggest a 1733.30 stop-loss for now, one-cancels-the-other with the closing offer of one contract at 1758.00.  Upside potential is to 1869.80, the ‘D’ target of the big pattern shown. Its sibling p midpoint lies at 1770.20, so we’ll make that our minimum upside objective for the near term. A two-day close above it would make 1869.80 an odds-on shot. _______ UPDATE (6:28a.m. EST):  We exited on the overnight high, 1758.00, before the futures dropped back by $10.  This leaves us with a single contract whose cost basis is 1708.00. A 1704.20 stop-loss is suggested for now.

SIH11 – March Silver (Last:32.735)

by Rick Ackerman on December 1, 2011 3:46 am GMT

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Small Details of a Monster Rally

by Rick Ackerman on December 1, 2011 2:40 pm GMT

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$DXY – NYBOT Dollar Index (Last:87.85)

by Rick Ackerman on November 26, 2014 3:40 am GMT

I remain very bullish on the dollar and expect it to achieve the 90.00 target shown by early 2015. However, it is clearly winded after the steep run-up since July, resulting in more frequent consolidations to develop thrust for each successive new high. Another factor contributing to the rally’s timidity of late is the implied resistance of two key peaks made, respectively, at 88.71 (June 2010) and 89.62 (March 2009).  A true bull-market breakout will require a push past these peaks, and although that outcome seems likely, it could take a while. However, if DXY were to effortlessly power past the peaks within the next 4-6 weeks, it would imply there’s still enormous power in reserve to drive the bull market significantly higher.

$AAPL – Apple Computer (Last:118.63)

by Rick Ackerman on November 25, 2014 4:10 am GMT

AAPL has been on a rampage since April, gaining hundreds of billions of dollars in valuation with a run-up of more than 60%.  How long can a stock that is already the most valuable in the world continue to rise vertically?  Probably not forever, it can be safely inferred. It’s not as though Apple has no competitors. Indeed, the day is probably not far off when Chinese manufacturers are churning out smart phones that will do just about everything an iPhone can do, but for one tenth the price. Samsung is having troubles of its own coping with brutal competition in mobile devices — but then again, the company does not enjoy Apple’s cult status, nor the kind of caché among customers that has inspired some of them to have the Apple logo tattooed on their butts.

From a technical standpoint the stock is closing on a very compelling target at 125.87 that comes from the weekly chart (see inset). I expect this Hidden Pivot to show stopping power that will be compounded by the 126.87 target of a lesser rally pattern that is clearly discernible on the hourly chart. The implied $7+ rally is reason enough to try to get long here if you are not already on board. However, it is also reason to take profits, do covered writes against stock held in a portfolio; or more aggressively, to reverse long positions and get short. In any case, I’ll use the 126.37 midpoint of the targeted range as my minimum upside objective for the near term, to serve you in any way that suits your goals.

$JYZ14 – December Yen (Last:0.8481)

by Rick Ackerman on November 24, 2014 8:00 am GMT

The chart shown has implications that may or may not prevent Japan from getting sucked into a deflationary black hole. However, the chart is quite clear on the question of whether BOJ will be successful in its longstanding goal of trashing the yen. (Answer: Yes, very.) The small rally in early October from around 0.9001 validates the pattern itself, and the decisive progress beneath that level since implies that the D target at 0.7332 is likely to be reached. This will obviously benefit Japanese exporters, but it will also put more pressure on manufacturers in the U.S. and elsewhere that compete with them. Traders should position from the short side until the target is reached, but be alert for a rally back up to the red line, since that would set up a ‘mechanical’ short to the target using a 0.9418 stop-loss. That’s far more than we would ordinarily risk, but you could cut it down to size by using the ‘camouflage’ technique. When appropriate, ask in the chat room if you’re uncertain about how to do this.

$ESZ14 – December E-Mini S&P (Last:2070.00)

by Rick Ackerman on November 24, 2014 7:09 am GMT

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$GDXJ – Junior Gold Miner ETF (Last:28.81)

by Rick Ackerman on November 20, 2014 6:17 am GMT

GDXJ’s ups and downs are in ‘dueling’ mode at the moment, alternating between bullish and bearish feints. It was mildly bullish when the stock slightly exceeded the 129.30 target shown on Tuesday. However, yesterday’s slide also exceeded a Hidden Pivot target — in this case a hidden support at 27.21.  Taken together, the action suggests that this vehicle will spend the next few days marking time in the range 28-29. The picture would brighten on a thrust exceeding 29.20 on Thursday, since that would imply more upside to at least 31.24. Alternatively, a continuation of the downtrend past 25.67 would have equally bearish implications. ______ UPDATE (November 24, 1:54 a.m. EST): GDXJ finally budged by moving above 29.28, albeit a day later than we might have preferred.  Now, if the rally holds above Friday’s 28.42 low, a modest target at 30.43 will be in play — would become an odds-on bet if and when this vehicle pushes decisively above the 29.43 midpoint resistance.

USZ14 – December T-Bonds (Last:141^22)

by Rick Ackerman on November 17, 2014 12:06 am GMT

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$+DIA – Dow Industrials ETF (Last:177.80)

by Rick Ackerman on November 12, 2014 4:20 am GMT

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$IDAH – Idaho North Resources (Last:0.1600)

by Rick Ackerman on November 5, 2014 12:01 am GMT

Idaho North [OTC symbol: IDAH] offers investors a potentially lucrative synergy between two very successful entrepreneurs.  CEO Mark Fralich started out as a reporter with the Associated Press News Service but went on to co-found Spoval Fiber Optics before moving into the exploration business with Mines Management, Consolidated Goldfields Corp. and some other natural resource companies. Like most executives in the exploration business, he is an aggressive risk-taker. But he is also an astute bettor, perhaps never moreso than in his choice of Thomas Callicrate to head up his technical team.

Callicrate is bottled lightning, a geologist who may know more about ore deposits in Nevada than anyone else in the world. I counted no fewer than 250 file cabinets in the barn-size work buildings that surround Callicrate’s spectacular home in Carson City. He seems to have committed every geological map in those cabinets to memory, and he can tell you exactly where each and every rock came from in the massive stone fireplace that dominates his living room and in his beautifully landscaped gardens.  The fact that he chose to affiliate with IDAH attests to his confidence in Fralich’s ability to exploit to-the-max whatever ore deposits the company is able to find.

From a technical standpoint, the company’s shares have not traded for long enough to offer a sound basis for prediction. The stock has fluctuated between 0.08 and 0.24 since being OTC-listed in November 2013. That said, it would be no worse than an even bet to hit 0.3000 a share, nearly double its current price, if it can push past the red line at 0.2150. That’s a Hidden Pivot midpoint resistance, and it will remain valid as a minimum upside target for the near term unless the stock falls below 0.1300 first.

For news concerning two separate option agreements that IDAH recently signed, click here for the Green Monster property in Nye County, and here for Coeur Mining’s Klondyke properties.

$+SNIPF – Snipp Interactive (Last:0.3310)

by Rick Ackerman on October 28, 2014 2:47 am GMT

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