Friday, October 12, 2012

GCZ12 – December Gold (Last:1771.7)

– Posted in: Current Touts Free Rick's Picks

The gold chart is predominantly bullish, but it is due for a larger pullback and has been trending lower for the last week.  Duelling patterns give us an array of trading opportunities.  The bullish pattern in question targets a new high for the multi-month rally at 1818.30, but in the meantime the pattern's midpoint at 1788.40 might be the level to dash the hopes of impatient gold bulls.  A smaller but well-formed bearish pattern has a midpoint at 1765.00 and a 'D' target at 1753.50.  These pivots are where well-funded gold buyers might step in, buyers who have thus far prevented gold from retracing a large part of its recent rally.  The outlook for gold is balanced between the need for a larger pullback and the notion that the lengthening trading range is satisfying that need.  (Posted by Doug “harry” McLagan)

ESZ12 – December E-Mini S&P (Last:1430.25)

– Posted in: Current Touts Rick's Picks

Although I dissed yesterday's feeble rally attempt in today's commentary, it was nonetheless bullishly impulsive on the hourly chart.  That doesn't necessarily mean it's going to get very far, and we can therefore consider a speculative short at 'D2' of the pattern shown.  I won't task you with camouflaging your way aboard, but your stop-loss should be no wider then three ticks. If you're worried the rally may fall shy of D2, you could try camo-ing your way aboard at p or D, but I'd suggest camouflage at those two pivots. Size:  two contracts.

Ignore Signs of Distribution at Your Peril

– Posted in: Commentary for the Week of March 8 Free

Beneath a façade of tedious price action, U.S. stocks appear to be weakening by the hour. On Thursday, for instance, the Dow couldn’t even muster a 100-point pop on news that jobless claims had fallen by 30,000 for the week ended October 6. Earlier this year, before our perennially recovering economy encountered stiff and persistent recessionary headwinds, that stat would have been worth at least 150 Dow points on the opening. This time around, though, DaBoyz could extract only a paltry 84-point short squeeze from it.  When a second-wind flurry of buying failed to drive the blue chip average any higher, it was time to unload. We said so in the Rick’s Picks chat room at the time, noting that the rally felt “doomed,” as it indeed was. Have investors finally figured out that virtually all employment-related statistics, especially with the election less than a month away, are economically meaningless at best and brazen lies at worst? Even if they have, it would hardly have mattered.  Since early 2009 and up until recently, any economic datum from the Labor Department that was less than catastrophic has been seized on by institutional traders as a catalyst to stampede bears into covering short positions. As we’ve noted here before, that’s the only kind of buying powerful enough to drive stocks past levels of supply or jolt them from doldrums.  Now this effect appears to be dead, or at least dying. From a technical standpoint, there are disquieting signs of distribution as the Industrial Average and the S&P 500 Index hover within striking distance of new all-time highs.  With breadth deteriorating on rallies and S&P insider selling at flood tide, leadership has gone flaccid as well. Several key bellwethers that we monitor very closely and trade, notably Apple, IBM and GE, have turned