Monday, June 18, 2012

This past Friday, Rick appeared on The Korelin Economic Report. Rick and Al took a break from financial topics this time and instead discussed the November elections. (Rick's segment is #6). Here is a transcript of that interview: Al Korelin: Okay. I’m back with Rick Ackerman. I’m going to do a little bit of a political discussion here, because politics, in my opinion, does relate directly to investing. Okay? Rick, I got a question for you. This deals with the current, with the Obama administration right now.You look at the numbers that are coming out right now. I want to start off with consumer sentiment. Consumer sentiment dropped 5.2 points down to 74.1, according to the Reuters/University of Michigan Sentiment Index that was announced on Friday. It went from 79.3 down to 74.1, okay? That is very, very negative. I think that is a major, major indication of obviously what’s going on in terms of people’s minds. You look at the gold indexes, because I think gold is a very, very accurate sentiment of consumer confidence, as is the first number we brought out. Gold continues to stay above $1600 an ounce level, okay? In spite of the fact that people are calling for gold to drop because things are starting to look so damn good, which I don’t think they are. Now in spite of this, the Dow Jones Industrial Average is not doing too bad. Now, given that scenario, how can the Obama administration possibly think that they can get re-elected? You look at the unemployment numbers that came out yesterday, they were worse, okay? 386,000, if I’m not mistaken, or something like that. Rick Ackerman: Well, I think Al that they can’t. You’ve got a trend that’s global right now, that simply wants to turn the incumbents

Stocks haven't gotten nearly as much boost from the Big Event in Greece Sunday night as we might have expected. Given the inability of DaSleazeballs to convert the election results into a rip-roaring short-squeeze, my hunch is that the broad averages will finish even-to-down on Monday.

We hold 200 shares with a profit-adjusted cost basis of 26.46. For now, use a generous stop-loss at 26.44, which is where the hourly chart would turn nasty.  At the same time, continue to offer 100 shares (or half the original position) to close at 30.17. _______ UPDATE (10:02 p.m. EDT): For now, raise the stop-loss to 27.12. Also, instead of closing out another piece of the position, let's try to sell calls against the stock if and when SLW gets within 15 cents of a Hidden Pivot target at 29.90 (daily chart, A=25.12 on 5/30). For each round lot of stock still held, short one July 30 call. I estimate that they'll be trading for around 1.25-1.30 with the underlying at 29.80.  ______ UPDATE (June 20, 3:47 p.m. EDT): In the wake of yesterday's gratuitous spasms, I'll recommend raising the stop-loss on our position to 27.39 today. That's where the hourly chart would turn impulsively bearish. _______ UPDATE (9:52 a.m. EDT):  For the umpteenth time, we have made a timely and profitable exit from this dog when it disappointed us. The stock gapped down to 27.84 on the opening, trading as low thereafter as $27.28, presumably on its way to Hell.  The fact that SLW has generated a bearish impulse leg on the hourly chart wthout having achieved its most recent rally target is telling me it's time to give up on the stock and move on to other stocks that show more promise.

Silver doesn't look quite as punk as Gold at the moment, but neither does it look capable of the burst it will take to vault the 29.260 midpoint resistance shown.  Once that Hidden Pivot is breached to the upside on a closing basis, its 30.605 sibling will become no worse than an even-odds bet.  Alternatively, a bearish target at 27.530 will remain in play (60m, A=29.675 on 6/7), predicated on a close beneath its p sibling at 28.310.

The futures have opened Sunday evening with a downward lurch, creating a bearish impulse leg on the hourly chart while denying us an opportunity to try shorting the modest, 1653.30 rally target given here earlier.  Caution is the watchword for now, since my intermediate-term outlook is bearish and a $70 plunge could come at any time.  Be that as it may, bulls will have a chance to salvage the day at the still undetermined 'p' midpoint of the developing pattern shown. Pivoteers are encouraged to give it a try, bottom-fishing there with a stop-loss as tight as three ticks, if a picture-perfect opportunity takes shape. _______ UPDATE (11:19 a.m. EDT):  The futures took a $10 bounce, hypothetically worth as much as $1000 per contract, from the exact, 1617.60 midpoint support of the pattern shown.  If you are still long a piece of the original position and let me know in the chat room, I'll establish a two-contract tracking position for your further guidance.

Index futures have begun Sunday evening with a spongy reaction to the supposedly momentous vote in Greece -- as though Wall Street were more interested in, say, the Sandusky trial than the financial future of Europe. The short-squeeze high for the move so far, as of around 8 p.m. EDT, is 1347.50 -- equivalent to a Dow thrust of about 90 points. However, DaBoyz will need to goose this vehicle above May 10's peak at 1356.75 to generate an impulse leg of daily-chart degree (see inset). None of this affects the viability of the 1378.25 rally target given here earlier, however. It can still be used a a minimum upside objective for this week, although I might have expected it to be in-the-bag by Sunday night.

[The following was written a day before Greece's election. Although the outcome seems unlikely to live up to its cliffhanger billing, it'll be interesting to see how U.S. markets react when index futures begin to trade Sunday evening. Our guess is that the institutional provocateurs who control the markets will use the outcome, whatever it be, to short-squeeze the bejeezus out of stocks. If they do, you should be ready to sell this last-gasp bear rally short. Click here to join us as we attempt to pick the Summer of 2012's exact top. RA] As the weekend approached, the outcome of Sunday’s election in Greece was being touted by the news media as “a cliffhanger,” a “Lehman moment, and “too close to call.”  But does anyone actually believe the ultimate outcome is in doubt? The drumbeat reminds us of the sensationalized news coverage that froths up every time America’s do-nothing Congress approaches a budget deadline. Greeks have been rioting in the streets for the better part of a year, and so it seems likely that even if they vote to stay in the EU, they will struggle in vain to fulfill the terms of future bailouts. Under the circumstances, political sentiment will continue to shift left, ultimately giving the radical Syriza party effective control of the nation’s political and economic machinery. A Marxist takeover of a deadbeat nation that owes everyone would be bad news for Europe, but it is predictable that stock markets around the world will turn riotously bullish no matter what the outcome. Bad new is good news on Wall Street these days, and good news -- i.e., a vote on Sunday to retain the status quo -- would be even better. Our hunch is that even if a military junta were to seize control of Greece’s