Tuesday, October 16, 2012

Yesterday's rally supposedly was fueled by strong September retail numbers, and so I've included a chart of PowerShares' Dynamic Retail Index in today's touts. It shows a mixed picture that implies holiday shopping could go either way. A second chart shows bellwether FedEx breaking out, with potentially tradable implications over the next 3-4 days.

A reported sharp rise in retail sales last month was credited with spurring a 100-point Dow rally yesterday, but charts that actually track retail activity in the U.S. suggest a mixed picture at best. Notice that PowerShares' Dynamic Retail Index has generated 'dueling impulse legs' on the daily chart and that the current downtrend has at least somewhat further to go before we might expect a bounce.  I've set screen alerts above and below current levels, since whichever is touched first could signal, respectively, a bullish or bearish outcome for the holiday shopping season.

Yesterday's selloff generated a bearish impulse leg (see inset) whose imputed power would increase significantly if the downtrend breaches 1720.00 today. That would rack up a second 'external' low for an uncorrected move and shift our analytical focus to the midpoint of any subsequent leg down. That midpoint, still undetermined, would need to hold if December Gold is to avoid retracing a major piece of the rally from around 1600 begun in mid-August. Follow our trading advice in real time with a free trial subscription.

It's catch-as-catch-can from one day to the next, since this headless chicken appears to be animated by trading machines tuned to news headlines, web-based chatter and billboard-obvious support-and-resistance levels.  Notice that the futures have made no progress since slightly exceeding the 1465.75 target of the pattern shown more than a month ago (inset).  This is neither bullish nor bearish technically speaking, just boring beyond belief for anyone who expects the market to do "something" merely because we're living in such accursedly interesting times.  ______ UPDATE (3:15 p.m.): In the chat room about three hours ago, I offered a 1450.50 rally target that was ultimately exceeded by a single tick (i.e., 0.25 points). After hanging up near the highs for much of the morning, the futures have since fallen to a so-far low of 1446.00.  I've suggsted covering half here and carrying the remainder overnight only for those who have access to a trade desk during the late session.

Who’s to Blame for Death of the Middle Class in America? [We occasionally publish guest editorials with which we disagree, but seldom have we disagreed more vehemently than we do with the praise the author has heaped on Ben Bernanke – a mountebank in our book  -- for supposedly doing his job well.  Fortunately, it is not Bernanke that is the main subject of this essay, but rather, corporate greed and its role in impoverishing the American middle class. The writer is Shanghai entrepreneur and jazz pianist Mario Cavolo, an American expatriate and Rick Pick’s forum regular who usually manages to see the bright side of a darkening global economic picture without being a Pollyanna. RA] Ben Bernanke is the only person who is doing the right thing at the right time under the right circumstances. Let’s thank him for doing the only thing he can do to save the slowing world economy. I have decided to print up 10,000 “We Love You Ben” stickers. Even better, let’s go with “Ben’s Got the Balls We Need Because No One Else Does”.  Rather than blame “Helicopter Ben” like everyone else, ask yourself what is really going on.  What is the bottom-line problem for the average American? Yes, start reading between the lines, because the masterful spin doctors and populist media-driven messaging are more deceptive and manipulative than ever. They’ve mastered getting you to look in all the wrong places for all the wrong reasons.  If you were in Ben’s position, wouldn’t you be offering the world billions in easing rather than letting the economic edifice collapse, creating global havoc and spreading social unrest? Shall we compromise and say that you would do some parts the same and some parts different, but no matter what, you would have a supportive, accommodative, monetary