Monday, June 11, 2012

Silver's gap-up opening tonight looks like Gold's -- which is to say, feeble in comparison to the psychotic leap mustered by the index futures.  If there's a play, the best I can imagine as of early Sunday night would entail bottom-fishing at a 'p' midpoint like the one shown (see inset). Meanwhile, bulls would need to effect a print at 29.680 to energize the hourly chart.

So powerful is tonight's short squeeze in the index futures that it has pulled even bullion quotes higher. The August contact would reach 1653.10 if it were to fulfill its technical destiny (see inset), but the move so far seems to lack the psychotic vigor that has seized the Mini-S&Ps and -Dow. My hunch is that the 1604.75 midpoint -- already breached to the upside -- will look like resistance by Monday morning.

Today's commentary, written Saturday, speculates that the latest eurobailout -- this time, of Spain -- may not produce much bang for 125 billion bucks. Still, odds favor a finishing stroke to the mild short-squeeze that was in motion when last week ended. Specifically, the E-Mini S&P was bound for 1345.25 at the bell, having neatly impaled that Hidden Pivot target's 1325.50 midpoint sibling.  The scenario may begin an  end on Sunday's opening bar, so I'll leave it to Pivoteers to make hay with 1345.25, presumably by shorting it. As you can see for yourself, the target does not lack for clarity. _______ UPDATE (9:21 p.m. EDT):  Even for a Sunday night this short squeeze is something special, perhaps because DaBoyz realize that this latest bailout may be fattest pitch they'll get for a while. The move projects to as high as 1367.50, calculated by moving point 'A' down to  June 5's 1267.50.  Camouflageurs looking for a belated way to get long will probably do best waiting for a pullback to 1336.50, the Hidden Pivot midpoint associated with 1367.50. _______ UPDATE (11:23 a.m. EDT):The opening bar of Sunday's night's vicious squeeze was as much as DaScumballs could coax from this vehicle; it's been downhill since. Still, the move's impulsive bullishness remains, and the whack-os who are yet on board will have the edge, technically speaking, until such time as the pullback hits 1304.75. At that price, a 'duel' would become manifest that somewhat favors bears.

Another eurobailout, this time for Spain. Here’s how two politically useful idiots who cover business news for the Associated Press – Paul Wiseman and Peter Svensson -- saw it, abetted by the perfect quote from a third:  "This move will come as a relief to the Obama administration as it suggests that European leaders are finally beginning to take significant actions to ease the intensifying pressure on the euro zone's peripheral economies" such as Spain and Portugal,” said Eswar Prasad, professor of trade policy at Cornell University. Finally? Significant?  All three of these guys must have missed the news a few months ago that a trillion euros’ worth of  no-strings credit – about ten times the amount extended to Spain over the weekend – was put at the disposal of Europe’s commercial banks. But to do what?  Hey, let’s not be impertinent! Don’t ask, don’t tell has become the omerta of the global banking system and its news-media lackeys.  And anyway, it’s not the purposes to which such “money” will be put that we are supposed to think about – only that the “money” itself is there – in this case materialized, somehow, by 17 European countries most of which are themselves bankrupt. We’re not referring to just the PIIGS, either.  Has anyone taken a close look at France’s books lately? The Seattle Times headlined the story thus:  “Bailout for Spain’s Banks Buys Time for Europe”. That’s a gutsy way to slant the story on a Saturday night, considering that the world’s stock markets would be voting their confidence, or lack thereof, in less than 24 hours.  Suppose stocks open flat-to-down in Asia, and then Europe follows with a thud? There goes a hundred-and-twenty-five bil, as fleetingly impressive as a shower of white sparks on the Fourth of July.  Our

As promised, we'll keep trying to short this vehicle at each spot that yields attractive odds. Most immediately, that will mean buying four July 63 puts if the Cubes get within 15 cents of the 64.49 target shown.  I can't predict how much the options will sell for at that point, but if you want to get the best possible price, monitor the bid/asked spread for this series from the time QQQ hits 64.  If you fill the order, stop yourself out if the puts trade for 0.25 less than you paid for them.