Tuesday, May 7, 2013

AMZN – Amazon (Last:255.66)

– Posted in: Current Touts Free Rick's Picks

Yes, we're aware that the institutional whack-jobs who have powered this bull market to record highs have been loading up on defensive stocks, particularly the shares of purveyors of consumer staples and healthcare products. But when the shares of world-beating retailers like Amazon can no longer head-butt their way past midpoint resistance (see chart), perhaps the scaredy-cat factor is worth worrying about.  We're prepared to relax if AMZN gets second wind off a lower point C. As things stand, however, the stock is in a prolonged dirge that would seem to hold negative implications for the economy as a whole.

The Pause that Asphyxiates

– Posted in: Free Rick's Picks

Slow Mondays are not uncommon, but yesterday's tedium verged on asphyxiating. It was interesting to the extent that it left some key vehicles, including DIA and the S&P 500, sitting precisely at rally targets that were reached on Friday.  If the push through them comes as expected, you'll have some clear targets to work with to trade either side of the move.

ESM13 – June E-Mini S&P (Last:1610/50)

– Posted in: Current Touts Rick's Picks

You should check the archive for the location of some key rally targets not far above, as well as for tactics we intend to use to leverage them. Since higher prices are implied in any case, traders in search of buying opportunities on the way up might want to check out the one-minute chart (see inset), since it is a cornucopia of 'external" peaks suitable for camo-ready predators.

GCM13 – June Gold (Last:1441.00)

– Posted in: Current Touts Free Rick's Picks

The chart shows yesterday's snoozefest in a context that could ultimately prove tradable for night owls. Assuming C=1455.40 holds, the D target at 1494.50 can be shorted with a stop-loss as tight as three ticks.  There's also room for some buying on the way up, predicated on an impulsive thrust that surpasses at least two of the many 'external' peaks available.  As always, an easy move past D would imply that there is additional buying power remaining to be spent. ______ UPDATE (10:15 a.m. EDT):  This dog got no lift whatsoever -- just a couple false starts from a lower point C at 1456.80 -- before it headed south. Nevertheless, the bad guys will have trouble pounding it much lower than the so far intraday low of 1440.50, since structural support from a 5/1 low at 1439.70 is nigh.

Thoughts on Bubbles and the Slippery Slope

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

[Our friend Doug Behnfield, the savviest financial advisor we know, says stocks are extremely vulnerable now but that long-term bonds, far from being in a bubble, are about to explode and send yields below two percent. He explains why in the letter below. It went out to clients in mid-April, and although the S&Ps have since continued their surreal rise into record territory, little else has changed. RA] In many ways, 2013 has started off like 2012. Long term Treasury bond rates started 2012 at 2.9% and spiked to 3.5% by April 19. That was the peak and they finished the year practically unchanged. We began this year with the yield at 2.95% and by April 11 they hit 3.28%. Rates have already tumbled to 2.84%. The S&P500 rose 12% in Q1 2012, peaking on April 2 and making practically no progress for the rest of the year. This year the S&P 500 rose 10% in Q1 and peaked (so far) on April 11. At this time last year my most important question from an investment standpoint was: Is the back up in rates a mere correction or a slippery slope? Is the almost unanimous opinion that the Great Bull Market in Bonds is over correct? A secondary (and closely related) question was: What is the outlook for the economy and the stock market? Apparently, no matter how much things change, the questions remain the same. First, I will try to tackle the generally accepted view that we have a bond bubble. Here is a recent quote from Robert Shiller; the famed Yale economist and author of Irrational Exuberance in USA Today on April 4, 2013: "Irrational exuberance is the psychological basis of a speculative bubble. I will define a speculative bubble as a situation in which news of price