Wednesday, September 5, 2012

Silver's strong action since August 20 has it aiming for a target at 33.625, and probably higher.  The precious metals were fairly quiet on Tuesday, with no new patterns of significance emerging in either silver or gold.  The silver pattern that we are looking at here is similar but not exactly analogous to the one we described yesterday for the gold market, since the 'A' points are different.  This is a judgment call prompted by the size of silver's BC pullback, which was much shallower than gold's.  Shorting this market will be treacherous, but intrepid silver traders (is there any other kind?) might try it with a tight order pair around the target.  The stop should be no lower than 33.660.  (Posted by Doug “harry” McLagan)

Index futures and bullion were marking time within bull trends late Tuesday night, although if the slope of the former were any mellower, the S&Ps would be flatlining. Yesterday's end-of-day short-squeeze should be viewed with skepticism, since it failed to bring stocks back to unchanged on the day.

Although we use Apple as our main bellwether, Google deserves attention as well because it's a 'market stock' that tends to accurately reflect the prevailing mood on Wall Street. Right now GOOG is stalled at a minor midpoint resistance at 681.50 (see inset), but if it closes above that Hidden Pivot for two consecutive days, look for a follow-through straightaway to the 703.75 'D' target of the pattern shown.  If the Dow were to follow suit, it would imply a 3% rally of about 400 points.  ______ UPDATE (September 10, 2:23 a.m. EDT): Buyers impaled our target on Friday, implying an easy move to the next, at 716.43.  As you can see for yourself in the refreshed chart I've provided, the target looks appealing as a short, and so I'll suggest doing so -- 200 shares, stop 716.75, good till canceled._______ UPDATE (September 19, 12:39 a.m. EDT):  DaBoyz used the staged weakness of a bear-trap opening to set up a $10 short-squeeze rally to 716.74 -- 31 cents from the target flagged above -- in the first 30 minutes of the session. After scuddling sideways for the next five hours, the stock took off again, leaving shorts on the ropes at the bell. Minimum predicted upside in the early going on Wednesday:  723.11.  Shorts should risk no more than 0.20 on trades initiated at that price. _______ UPDATE (6:26 p.m. EDT): Yesterday's short-squeeze rally blew past 723.48, implying more upside over the very near-term to at least 734.45.  As always, an easy move through that target, a Hidden Pivot, would imply that bulls have yet more firepower to deploy. _______ UPDATE (September 23, 11:41 p.m. EDT): Friday's rally hit 734.92, fulfilling our target.  That resistance is not exactly chopped liver, so if GOOG blows past it today, infer that the

[Gary Leibowitz, a regular in the Rick’s Picks forum, has a knack for attracting hostile fire.  An unrelenting optimist in a bear’s lair, he is a guy who consistently raises everyone else’s hackles. In the guest commentary below, however, he digresses on a topic that all of us can take pleasure in – not just for its own sake, but as an investment.  RA] Can you guess what investment has outperformed the S&P 500 by more than 300% over the last 30 years?  This asset has risen steeply in value when stocks were in a bull market, but it has fallen only half as steeply during bear markets. When I first stumbled on it about 25 years ago, I didn’t even consider it as an investment. Instead, I treated it like a hobby, one that I still enjoy. This particular investable requires only that one diversify into five sub-classes, and that one store it in a safe environment.  In the end, you will be able to either sell it in a fairly liquid market, or you can simply pee it away as you enjoy it. If I have confused you, it was intentional.  My mention of five investment categories may have helped you guess what I was talking about. Here they are: Chateau Margaux, Chateau Lafite Rothschild, Chateau Mouton Rothschild, Chateau Haut Brion, and Chateau Latour. To invest in these Bordeaux you need not be an expert, or even have a trained nose. All that is required is that you store the bottles in a somewhat humid environment at around 55 degrees.  If you have a proper place at home that fits the bill, great. But you can also buy an inexpensive wine cooler to keep the temperature constant.  As for being savvy about each year’s grape harvest, in most