Friday, May 11, 2012

For all the headless-chicken hysterics of the last week, this vehicle seems to desire nothing more than a rendezvous with the 1332.75 low recorded on March 6. We'll sit back and let it do its stupid, pointless thing today, since the billboard-obvious structural support represented by 1332.75 will take precedence over any Hidden Pivots other than those within minor patterns.

The dollar looks poised to surge, a prospect that holds bearish implications for stocks, bullion and all other currencies. For a graphical look at the technical picture, check out the chart that accompanies today's tout for DXY, the Dollar Index.

Someone mentioned in the chat room tonight that the dollar was bumping up against a trendline, presumably developing thrust for a breakout (see inset).  From a Hidden Pivot standpoint another perhaps more significant breakout price lies at 81.64, somewhat above the trendline's 80.35. It is the 'p' midpoint of the large pattern shown in the chart, with a 'D' target at 85.16. Breakouts aside, DXY's daily chart is already bullishly impulsive going back to a 78.10 point 'A' low recorded on 2/29.  The pattern projects to 81.24, so you could infer that the fireworks need only a match to light up the sky. Want to learn how to do this stuff yourself? Click here for information about the upcoming Hidden Pivot Webinar on June 6-7.

Paying subscribers get to see quite a bit more of Rick’s Picks than lurkers might infer from reading the free commentaries that go out each day to many thousands of readers. A headline that will have caught the eye of the latter was this one, from the May 2 edition: Gold’s Nastiness Hints of a Major Bottom. Comex June Gold subsequently fell $76, and we were therefore unsurprised to receive e-mails from lurkers who evidently had been caught flat-footed by this supposedly unforeseen (by us, anyway) bout of weakness. In fact, the daily “trading touts” that lie behind the Rick’s Picks subscriber wall have been far more cautious than outsiders would likely know. Just yesterday, in fact, we offered a projection for GDXJ, a proxy for junior mining stocks, that may have caused some subscribers’ scalps to crawl. (Click here for a free trial subscription if you want to see just how low we think this favorite of gold bulls could conceivably go.) So which is it:  Are we bullish on gold, as our headlines would seem to imply? Or do we privately shrink from the risk of owning bullion? The answer is that, although we are bullish on gold and silver for the long-term and have been socking away bullion coins for years, we are not so certain that it will achieve the stratospheric heights that some gurus have predicted. However, what we are most confident in saying is that, come hell or high water, gold’s purchasing power will more than hold its own relative to all other classes of investable assets.  We would concede, however, that the fantastic price targets of some bullion superbulls have a few things going for them.  For one, the U.S. dollar is already intrinsically worthless, and that implies that real money – i.e.,