Thursday, December 1, 2011

Small Details of a Monster Rally

– Posted in: Current Touts

The stock market was in the throes of a monster rally as this tutorial session got under way, with the Dow up more than 400 points and the E–Mini S&P inches from a target that could temporarily cap the rally. More important than all of this was a T-Bond selloff, the resolution of which may tell us whether the Western World is about to embark on a hyperinflationary course. We set a screen alert at a key downside target of the December T-Bond futures, there to await a result.

Bankers’ Best-Laid Plans

– Posted in: Free Rick's Picks

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.

SIH11 – March Silver (Last:32.735)

– Posted in: Current Touts Rick's Picks

Silver's rally yesterday looked impressive at first glance, but it's hard not to notice its failure to surpass  the key external peak at 33.120 recorded on November 22.  Gold looks capable of dragging Silver higher, though, and that is what I expect.  However, the latter would need to hit 34.010 today to refresh the bullish energy of the hourly chart. That's a single tick above the external peak I've highlighted (see inset).

GCG12 – February Gold (Last:1749.60)

– Posted in: Current Touts Free Rick's Picks

We'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.

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

– Posted in: Current Touts Rick's Picks

An 1139.75 rally target disseminated here yesterday morning held for nearly five hours until a flurry of panicky short-covering on the close turned it into suet.  Use 1255.75 as an upside target for now, predicated on a push through its sibling midpoint at 1248.75.  There's no pretending we can find good camouflage after yesterday's rampage, but that could change if Wednesday night's action creates a price-bar forest of tedium from which we can extrapolate a microscopic but tradable A-B impulse leg. My suggestion to night owls looking to catch the next northbound express is to look for such an opportunity on charts of 10-minute degree or less.

ECZ11 – December Euro (Last:1.3460)

– Posted in: Current Touts Rick's Picks

Yesterday's coordinated action by the central banks to lower dollar-swap rates sent the euro into a bullish spasm. The move was strongly impulsive on the hourly chart, but we'll reserve judgment on the likely longevity of the move until we see how the futures behave near the tentative 'p' midpoint of the pattern shown, 1.3551. An easy move through it would portend more upside to at least 1.3681, its 'D' sibling, but it would also infuse the hourly chart with new bullish energy for a possible push toward 1.40.

Watch T-Bonds, Not the Criminally Insane Dow

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

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