Thursday, March 28, 2013

There doesn't seem to be much interest in this stock in the chat room, but for the record and nonetheless, its daily chart has just generated a buy signal at 41.04.  The rally paused yesterday just 3 cents above the 41.83 midpoint pivot, but camo traders shouldn't have much difficulty catching the next leg to 42.56, its D sibling. _______ UPDATE (March 31, 10:56 p.m. EDT):  Traders in fact would have faced quite a challenge using camouflage to get aboard on Thursday, since the best such opportunity that arose would have yielded little better than a scratched trade (see inset, a new chart). My suggestion is to keep trying, but on the 3-minute chart rather than the '5' I've displayed.  The 42.56 target still obtains as a minimum rally objective. _______ UPDATE (April 1, 2:47 a.m. EDT):  The lesser charts have gone bearishly impulsive, testing our patience. I'd suggest zooming out to the 10-minute chart now if you're looking for the bullish turn, since there are plenty of 'external' hooks for a trade.  _______ UPDATE (April 3, 2:06 a.m. EDT): Yesterday's kamikaze dive turned a mildly promising daily chart into a duel between bulls and bears (see inset, a fresh chart). Despite the severity of the drop, the two forces look evenly matched at this point, suggesting there is likely to be bargain-hunting near March's 38.55 low that will keep the stock from falling apart straightaway. _______ UPDATE (April 4, 10:56 p.m. EDT): Sellers schmeissed the structural support at 38.55, implying they're intent on pushing the stock even lower. Because the 38.34 midpoint support of the pattern shown was exceeded by 27 cents, we should expect NEM to fall to at least 34.68, its 'D' sibling, at least.  I'll nonetheless recommend bottom-fishing with a 34.71 bid for 400 shares, stop

We've looked at CAT for bellwether clues but have never traded it. Let's try something new, bottom-fishing near an 84.16 correction target (see inset) that looks quite compelling. Officially we'll use camouflage, and I'll try to signal the entry opportunity in the chat room if I'm at my desk when the screen alert I've set goes off.  However, if you'd rather dispense with the fancy stuff, you can use a straight bid for 400 share @84.21, stop  84.03.  If you want to be notified via e-mail in real time of a 'buy' signal, be sure to check 'E-Mail Notifications' on your My Account page. _______ UPDATE (March 31, 11:13 p.m. EDT):  To finish the week, the usual bunch of ripoff artists opened CAT on a gap (see inset, a new chart) that turned out to have been a bull trap.  The stock is still a buy, but camouflageurs will need to be especially careful, since buyers are likely to be smarting for a day or two as a result of having been whipsawed for an entire week.

Here is yet another chart that supports the views of the bullish lunatic fringe.  The 14966 target is one that I've already identified in the cash Dow, but the futures' daily chart yields an even clearer picture.  Consolidation above p (the red line) is unmistakable and implies that the target is very likely to be achieved.  That said, we have no clear indication as yet concerning how long the correction will last, or how deep it might go.  Camo traders can position from either side using the hourly chart, since false signals in both directions have been occurring more or less regularly.

We were briefly in a trade yesterday that was flagged in timely fashion by an alert chat-roomer who goes by the handle 'Kibitzer'.  Kibitzer he manifestly is not, since this opportunity had some serious mojo going for it, camo-wise.  The trade went on to reach its 'D' target at 1557.00, but not before I'd suggested tightening the stop-loss sufficiently to turn Kibitzer's $600 winner into a $125 semi-quasi-pseudo winner. The broad averages underperformed my expectations yesterday, but I still think DaBoyz are simply marking time, waiting for news from Europe to recede from view, albeit perhaps only temporarily.  When liftoff finally occurs, presumably by no later than Friday, you can safely assume the futures are bound for the 1594.25 target, at least.  Camouflageurs, please take note:  a move to the target would become an  odds-on bet if the futures close above the 1562.00 midpoint resistance.  Click here to sample Rick's Picks free for a week, including the chat room.

San Francisco Real Estate Housing Bubble Home prices are rising at the fastest pace since before the housing bubble and crash, according to the Case-Shiller Index.  Data for January showed a 10-city composite up 7.3% over the last 12 months and a 20-city index gaining 8.1%.  A bullish sign for the housing market?  More like a death rattle, we’d say.  In our estimation, the collapse in residential real estate prices begun in 2007 is only halfway to a bottom, implying that valuations will eventually fall a further 35% from their 2007 housing bubble peaks. Check out the Mountain View, CA home pictured below if you want to know why, even after the real estate collapse of 2007-09, California home prices in particular are still egregiously out of line with incomes. We rented this house from 1995-1999 for about $2400/month before moving to Colorado like so many other Californians seeking twice as much home for half the price.  The three-bedroom rancher was worth about $525,000 at the time, and we wondered who would be so foolish to buy it at that price. With just 1150 square feet of usable space and a small back yard, it had sat unimproved since 1952, when it sold new for around $12,000. The only feature in the house that might be considered an upgrade was the quiet-flush toilet in the half-bathroom. Otherwise, fixtures, carpets and structure were original and well worn. Termites could be heard munching on the garage. Smelling like a San Francisco housing bubble?  Unbelievably, the home is currently valued at $1.1 million on Zillow. Anyone who buys it at that price would have to be either crazy, extremely desperate, or confident that a greater fool would eventually appear when it’s time to trade up.  In 1952, before the San Francisco housing bubble,