Tuesday, April 9, 2013

With the dollar in a constipated state for the last month, it might be yet a while longer before the buck resumes its upward course. The evidence can be found in the thatch of bars at the right-hand edge of the chart. Notice that the very highest of them failed by just 0.13 points to impulse above an important external peak recorded last August. Such hesitancy suggest that bulls lack the moxie right now to challenge last summer's highs without further consolidation.  My hunch is that the process will include some wild swings outside the by-now familiar range.

I'd like to be more encouraging, but the unavoidable fact is that gold futures look like hell right now.  Notice that although the 1587.10 rally target is still valid because the point C low remains intact, buyers have been unable to muster the $3 thrust it would take to get there after nearly three days of trying. Further evidence of weakness is found in the failure of subtle camouflage opportunities to bear fruit. Bottom line: There is no compelling reason to be trading this vehicle at the moment. If you can't resist, I'd suggest using 1587.10 as a price objective and the 30-minute chart for locating a promising impulse leg.

Permbears should take a look at the graph accompanying this tout, lest they get the crazy idea that bad economic news and lowered earnings forecasts alone are capable of slowing down buyers for more than a few minutes. Both of these negatives were in evidence and waxing last week, and one might have inferred that they were the cause of Monday's soft opening. Alas, it proved to be little more than a modest shakedown to begin the week, and within an hour bulls were at it again, driving stocks higher with such persistence that the 'effect' looks like a good bet  to reinforce the bullish mood till week's end. Meanwhile, you can cling to the hope that the 14632 rally target shown will show a little stopping power, but I wouldn't recommend opposing it aggressively.  A bigger picture available on the monthly chart still suggests that a major Hidden Pivot resistance at 14970 (broached here earlier) is likely to impede the stampede. The coordinates are as follows: A=10404 (10/31/11); B=13339 (5/31/12); and C=12035 (6/29/12).

Aren’t stocks supposed to rally on “bad” payroll news? If so, the Dow should have soared Friday on word that our allegedly recovering economy generated a sickly 88,000 jobs in March.  If that weren’t good/bad enough to inspire a psychotic buying spree on Wall Street, there was further news that a drop in the unemployment rate to 7.6% had been caused entirely by a huge exodus of workers from the job market. This stampede of the  despairing pushed the labor participation rate to 63.3%, its lowest level since 1979, undermining whatever  brazen claims the spinmeisters are making these days concerning the economy’s supposed re-awakening. Until just a few months ago, rotten news like Friday’s would have sent stocks soaring, since it meant, according to the popular wisdom, that the Fed was likely to ease even more, and for longer.  Instead, the Dow Industrials spent the entire day struggling to recoup a 170-point loss registered on the opening bar. Alas, the effort failed, leaving the Indoos 41 points shy of unchanged even after a last-ditch attempt to short-squeeze stocks in the final 30 minutes of the session. Stimulus Has Failed Is it possible the stock market’s glumness on Friday was due to a growing recognition that stimulus has accomplished little or nothing to create jobs? Sure, the banks are awash in funny money that has no place to go besides stocks and bonds. And home prices have temporarily stopped falling, cushioned by untold trillions of dollars in monetary stimulus. But as should be increasingly clear to all, even to Obama’s cheerleaders and spinmeisters, these trends have manifestly failed to lift the working man, and therefore the U.S. economy, in a way that is meaningful, much less sustainable. Meanwhile, the news media continue to propagate the destructive lie, absurd on its face,