Friday, June 1, 2012

Today's touts include the Dow Industrials, which look like they're about to let the other shoe drop.  A feint higher could set up the bull trap needed to make the next down-leg memorable, so don't miss an opportunity to go home short for the weekend if it should happen today.

No change. Buyers would need to push the July contract to 29.005 to get back in the game. Alternatively, a relatively small decline to 26.195 would re-activate an old target at 20.370. A potentially last-gasp rally to 28.985, a midpoint pivot, should be used by camouflageurs to get short provided entry risk can be held to a theoretical $70 per contract.

The Gold Miners ETF has been in a trading range for about a week, after making a potentially major low on May 16.  While bouncing up and down, GDX has traced out several attractive patterns, two of which have already rewarded tightly-stopped trades at their midpoints.  Unfortunately these two patterns point in different directions, and we are left to guess where GDX is going next, to its bearish 'D' target at 42.23 or its bullish 'D' at 46.90.  The good news is that hidden pivotry enables bulls to use a bearish pattern by going long at the lower target.  For a trade, we would buy at 42.26 with a stop at 41.99.  For an investment, we would size the purchase appropriately and omit the stop.  (Posted by Doug “harry” McLagan) _______ UPDATE (June 1, 2:15 p.m. EDT):  GDX decided that its destination was 46.90, and it zoomed up to 46.85 during morning trading for a quick 7% gain.  It has hovered just below that level for two hours now.

Yesterday afternoon's 's 22-point Whoopee Cushion bounce came off a low that lay just 1.50 points from the 1295.75 correction target flagged here.  Strictly speaking, there was no trade for those bidding at the Hidden Pivot.  However, using a camouflage strategy could have produced a different and rewarding outcome. Notice in the 3-minute chart (see inset) that the initial thrust was a compelling impulse leg with a one-off 'A', two single-bar coordinates and an entry trigger at 1303.50 -- in short, a 'What are you waiting for?' trade for Pivoteers alert to the possibility of a turn at or near 1295.75. The important thing to note is that the best -- and easiest -- entry opportunities are invariably those signaled on charts of minute degree following a price reversal at or near p or D.  For the trader, the trick is to act rather than think when all the ducks are so beautifully aligned. For Friday, bulls were holding a small edge as of around 1:15 a.m. Sticking with the 3-minute chart displayed above, the relevant pattern is A=1297.25 (5/31 at 11:09 a.m. EDT), B=1319.00 and C=1299.50. The implication is that a decisive pop through the 1312.50 midpoint resistance would send this vehicle on its way to D=1323.25.  Camouflageurs can start looking for a way in after the 1307.00 trigger is hit. ______ UPDATE (10:02 a.m. EDT):  Ahh, all is right with the world! Following the Dow's lead, the futures are in 'plummet mode' today, a Friday, DaBoyz having been unable to promote a short-squeeze on such dismal economic news as the markets have received this morning. (It seems, finally, to have dawned on the thieves, miscreants and mental defectives who make their living abusing OPM that this cannot lead to looser money because money is already as loose as

[Rick’s Picks once again goes off the beaten path with a guest commentary on patents from forum regular Ben Rositas. For reasons that he makes clear, patents and free markets go hand in hand. Moreover, to the extent tariffs support this, they are justified. RA] Today I hope to illustrate -- by explaining what they are not-- why patents allow free markets to exist at all. Consequently, the link between patent and tariff will be revealed, in turn revealing the inextricable link among patent, tariff, and free market. I will begin with two interpretations of the U.S. Constitution, Article I , section 8, cls 8. Brackets denote separations that aren't readily apparent. "To promote the progress of science and useful arts, by securing [for limited times] to authors and inventors the exclusive right to their respective writings and discoveries." Here, exclusive right belongs to someone, thus granting monopoly for the patent duration. And since it doesn't say "for a limited time," it is infinitely renewable. Conflicting with founding and framing principles, that interpretation is surely invalid. But if the brackets are expanded to include "to authors and inventors" the innovators are instead given limited, renewable durations, while exclusive right is secured to the patented thing. In the broader context of Article I, section eight -- Congressional powers in foreign/domestic matters -- the exclusive right is in the domestic market (otherwise it contradicts founding principles). Taken this way, competitive economic freedom is neither hindered nor obliterated. Free People Want Patents Exclusive right by patent means that foreign copies are infringement via smuggling. Ideas can be traded, explored, modified, reproduced, and patented, even if these are already done in multiple countries. And since domestic copies aren't infringement, nor domestic competitors barred from discovering or importing new ideas, improvement is actually encouraged. Copies