Wednesday, January 2, 2013

GCG13 – February Gold (Last:1649.10)

– Posted in: Current Touts Free Rick's Picks

Someone posted an $1158 target for gold in the chat room, attributing it to Martin Armstrong.  Over time, I've lost a clear sense of whether the guy has been right more often than wrong, which is the basis on which all forecasters should be judged. However, the seven-year stretch Armstrong did in prison for what many believe to have been trumped-up securities-fraud charges seems to have given his credibility a more or less permanent boost.  After looking at gold's long-term charts myself, I find no basis for predicting such a severe drop in the price of gold in 2013 -- one amounting to a 62% correction of the rally begun in October 2008 from 728.  What I see is a lazy consolidation that could continue for quite some time, perhaps into 2014, without exceeding the range 1500-1800.  That said, an impulsive, unpaused thrust breaching lows #1 and #2 (see inset) would lend weight to Armstrong's scenario.  Perhaps he has a crystal ball?  We don't, however, and until such time as we see some strongly bearish impulse legs develop on the daily chart, we'll stick with a forecast that is only moderately bearish at worst for the intermediate term.  _______ UPDATE (January 4 at 1:23 p.m. EST):  With this morning's dump, the futures appear bound for 1606.40.  The midpoint sibling of that 'D' target, already exceeded by a whopping $24,  lies at 1650.90, and so we should view any rally to that threshold as short-able, albeit via camouflage.

DJIA – Dow Industrial Average (Last:13104)

– Posted in: Current Touts Rick's Picks

Friday's whipped-up hysteria failed to surpass even a single prior peak on the hourly chart, let alone the two we require to generate a bullish impulse leg. This is bearish on its face, but we shouldn't presume to know how DaBoyz will work the crowd on 2013's opening day, especially since the political eddies, currents and riptides are beyond predicting.  My hunch is that, as the unpredictables grow less newsworthy, the focus will increasingly be on an economy about to turn leaden under the massive weight of Obamacare, significantly higher payroll taxes and the end of the dead-cat bounce in housing.

Gratuitous Spasms Ahead

– Posted in: Free Rick's Picks

Australian stocks have spasmed higher on news that a fiscal-cliff deal has been struck.  DaBoyz are bound to leverage this with a short-squeeze of their own when U.S. markets open Wednesday morning.  Although I expect stocks to head significantly lower in January after the meaninglessness of the deal becomes more widely acknowledged, there's little point in our attempting to out-guess the headless chickens who will be mixing it up this morning.  I may put out a speculative trade intraday nonetheless if it looks like we can do so with relatively little risk, so stay tuned to the chat room and to 'E-Mail Notifications' if you're game.

Only a Martian Attack Can Save Us

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

In the wickedly funny Tim Burton film Mars Attacks! there’s a scene where all 534 members of Congress get vaporized by aliens with ray guns. Alas, just when we need them most, there is nary a Martian invader around.  Instead, we have only the tragicomic spectacle of political thumb-wrestling on such a grotesque scale that even optimists will have been sapped of hope that the Republic can somehow survive the follies and depredations of its ruling class. The fact that the negotiations have continued into 2013 after a supposed compromise was reached on New Year’s Eve hints of further perils for Americans in the new year.  For, nowhere in any compromise soon to be struck is there a serious word about spending cuts. The main focus of the talks is the extent of tax increases that will in any case hit most workers, and hard. “In effect,” noted the Wall Street Journal, “Congress has delayed the fiscal cliff by erecting a new and potentially more dangerous one.” Just so. Unfortunately, Monday’s eleventh-hour compromise between Obama and the Senate came after the House had adjourned for the day. Initially the news media waxed exuberant, as is their wont when little or nothing of substance has occurred on Capitol Hill. A day later, however, the headlines that trumpeted the story have become “Dewey-Beats-Truman” offal. We now learn that the Senate’s recipe for Sweeney Todd sausage is not going down so well with House members and that they could reject it. And for good reason: No one especially likes the latest deal – not the Democrats, not the Republicans, not even Obama himself. At least this time Nancy Pelosi has kept her mouth shut, since it’s obvious that, like Obamacare, whatever budget agreement eventually emerges will have to be lived with for a