Wednesday, November 14, 2012

MSFT – Microsoft (Last:27.09)

– Posted in: Current Touts Rick's Picks

Microsoft's swift 10% plunge recently prompted someone in the chat room to note that it cannot be good for the market as a whole. Agreed, although from a technical standpoint it should be noted that the stock could fall a further 10%, to 24.30, without negating the bullish impulse leg that ended with early March's peak at 32.95. My strong hunch is that MSFT is headed down to at least the 22.05 midpoint support of the big pattern shown. That pivot is tied to a 'D' target a 11.10(!),which at this point seems farfetched. Nevertheless, and as far as I'm concerned, Windows 8 has the potential to be the biggest disaster in the company's history -- a product that would seem to hold no appeal whatsoever for business users, let alone a reason to upgrade from Windows 7. We shall see. In the meantime, we should endeavor to catch a ride south from the top of the next rally, since the subsequent downdraft could be a 20-percenter for shorts. Given Microsoft's huge cash hoard, acquiring shares below $20 would be like buying dollar bills at half-price. Is there a possibility that the company's spare tens of billions are parked in an unsafe place?  If so, the epiphany awaits that will reveal the $2 trillion surplus held by U.S. corporations to have been as ephemeral as our banking system's alleged reserves. [This just in: A ComputerWorld article calls Windows8 a "strategic mistake," and a "Jekyll and Hyde operating system that is weak on tablets, terrible on PCs."  Click here.]

$1803 Is Where Gold Would Come Alive

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

For gold investors, first the bad news – and let us be clear up front: it’s not really that bad.  Notice in the Comex chart below that the price of gold has been meandering within a pennant formation for more than a year. You don’t have to be a technician to see that this could comfortably continue for some time – well into 2014, perhaps – before the converging lines of the pennant will narrow sufficiently to force gold to “escape” either up or down. You can relax about which direction is the more likely, since the pattern so far looks like a classic consolidation, tipping the odds toward a breakout rather than a breakdown. However, our own proprietary tools (a.k.a. Hidden Pivot Analysis) suggest that it could be a while before the excitement begins.  This is implied by December Gold’s failure in October to surpass an important  peak at $1802 peak recorded seven months earlier, in March of 2012. Had the recent rally exceeded that peak, it would have created a bullish “impulse leg” of weekly-chart degree, clearing a path to at least $1976.  Alas, the rally chickened out just five points shy of impulsiveness, casting gold into corrective purgatory for an indefinite spell. A Rare Opportunity So what would it take to hasten bullion’s northbound exit from the pennant?  Here the news is good, for it would require nothing more than a measly $5 thrust that is uncorrected between 1798 and 1803.  Moreover, according to our technical runes, the thrust would not have to exceed the third peak at $1823 to signal a breakout with sufficient power to reach $1976 over the near term.  In fact, those familiar with our “camouflage” trading technique could conceivably be handed a rare opportunity to board with risk very tightly controlled if