Friday, June 15, 2012

It's been a tiresome slog toward the relatively modest target at 1653.30 shown in the chart.  Because Gold is vulnerable to a $50 plunge at any moment, trades should be initiated only via camouflage on the lesser charts or at clear swing points on the hourly. That implies that bulls should look for their next opportunity on a b-c pullback following a marginal penetration of last Thursday's 1630.70 peak.  The target itself (i.e. 1653.30) is a short, provided you're able to hold theoretical entry risk to $50 or less per contract via camouflage.  Please note that an easy move through the target could imply that gold will be swept higher along with stocks if eurobailout mania erupts Sunday night.

We're looking aggressively these days for low-risk places to short the broad averages, but touts for Friday acknowledge the possibility that weekend elections in France and Greece could trigger an eruption of eurobailout mania with the power to short-squeeze index futures hard on Sunday night.   Get free access to my precise rally targets for the E-mini S&Ps and other popular trading vehicles by clicking here.

I hauled out the 240-minute chart to see how high, really, this hoax could go, and the answer is a hard-to-believe 1378.25, the 'D' target of the pattern shown.  This implies a Dow Industrials rally of more than 400 points. Still, we shouldn't underestimate the ability of the spinmeisters to put plenty of lipstick on whatever pig emerges from elections about to be held in France and Greece.  If the results trigger something like eurobailout mania, short-squeezing this vehicle above the midpoint resistance at 1337.75 Sunday might, we may infer that more upside awaits, presumably to the hard-to-believe target.  Camouflageurs should make ready to buy-stop their way aboard if a quick b-c pullback ensues on the 2-minute chart following a marginal upside penetration of 1337.75.

It's impossible to predict how much more mileage the spinmeisters will get from Spain's "problem" and the anticipated bailout thereof, but from a technical standpoint the euro still has room to rally. Specifically, the two 'D' targets shown should be used as minimum price objectives for the near term.  Camouflageurs can try getting short at either of these Hidden Pivots, but my hunch is that the higher would be the less risky play. _______ UPDATE [June 17, 8:47 p.m. EDT) Sunday's gap-up opening topped to-the-exact-tick at the 1.2759 target shown. If you shorted there, cover half the position now at around 1.2721 and tie the rest to a 1.2752 atop-loss.  If I hear from any traders in the chat room who did the trade, I'll establish a tracking position four your further guidance.

We're looking more and more aggressively for low-risk opportunities to get short, since it's possible that stocks have entered a bear market.  This equity-based (as opposed to futures-based) vehicle is optionable and highly liquid, so that, for the benefit of novices and experts alike, I'm going to start stalking it as we are already doing with the QQQs. For the moment, however, we won't attempt to impede it, since yesterday's spike just before the bell exceeded the 'D' target of the minor pattern shown. If still higher prices impend as we might therefore expect, the shortable 129.75 'D' target of the larger pattern begun on June 5 is a logical minimum price objective.  Its midpoint sibling at 126.80 is close enough to yesterday's high to yield an enticingly shortable top, but it is not my practice to establish short positions ten second before the final bell.  If the high had been achieved with 30-60 minutes remaining in the session, tough, I'd have said, "Short away, camouflageurs!" 

[From his new headquarters in a fashionable district of Shanghai, our friend and frequent contributor Mario Cavolo, a communications consultant, recently surveyed the passing parade.  Bullish thoughts on the global economy ensued. For, who can doubt that the dawning Asian Century will help balance out the difficulties that seem likely to hobble the economies of the West? For an uplifting, long-term view with a global perspective, read his essay below. RA] Does it not occur to any pessimist that a massive region of the world is expanding, not contracting, and that this statistical fact portends well for the future demand of all "stuff" across the globe? While assuredly not discounting disturbing global financial and economic pressures, pessimists and permabears seem to relish discounting the powerful, upward expansionary forces across the global economy that also clearly exist. Here in Shanghai, I now sit in the new upper middle class mall called Kerry Parkside, where we have a marketing location for our various services. Forget the fact that prices are annoyingly high and that the mall is still packed on the weekends. Let's consider right now only of this part of the story which gives us a glimpse of the future: Observing every family that enters this mall, every woman I see is either with a baby/toddler in tote or pregnant. Did I say “every”? Apologies. Of course not, and I readily confess such an exaggeration. Yet it boggles my mind to note how many pregnant women and under-three-year-olds are here, appearing very much as the rule, not the exception. The same exact observation is easily made across China's twenty or so major urban centers, now totaling a population well over 300 million family dwellers. Ladies and gentlemen, embrace and gladly welcome the greatest baby boom in history, unprecedented in world history,