Thursday, June 6, 2013

Gold is down and index futures are up early Thursday morning, but neither by much. I suspect that DaBoyz, opportunistic as always, are simply fading thin price action in preparation for reversing direction in both vehicles when the regular session begins.

The 1593.75 downside target shown is analogous to the one at 14899 that I've flagged in today's DJIA tout.  It is an obvious place to attempt bottom-fishing or to try shorting if the futures should rally first to the 1619.75 midpoint pivot, which is now resistance. Camouflage is the preferred tactic in either case.  As I've noted in the Dow analysis, an easy breach of the target would imply more weakness to come.

At this early stage, we have only a downtrend on the hourly chart with which to speculate on the possibility that a major top is in. Fortunately, the pattern is of such clarity and precision that its 'D' target at 14899 should be regarded as a reliable benchmark for gauging the selling power behind the so-far six-day selloff. As always, a breach of the target would imply more weakness to come; moreover, the easier it is penetrated, the greater the impending weakness to be inferred.  Camouflageurs can bottom-fish using the Diamonds (DIA), since a bounce from the targeted low seems quite likely. The reason we should employ camouflage is that the presumption of support at the round number 14900 is bound to attract the interest other players. Please note that if the Indoos should rally to the 15102 midpoint pivot before reaching the target, it would be an ideal place to try to get short.

Bears may have been pleasantly surprised yesterday when stocks closed lower on a Tuesday for the first time since January.  Has reality finally found a foothold in the fetid, bad-news-is-good-news precincts of Wall Street?  We shouldn’t get our hopes too high about this, since the herd still seems to believe that the uglier the economic news, the more likely central banking’s feather merchants are to continue pumping fraudulent money into shares and real estate. Still, you have to wonder how much harder the central bank will need to push on the string in order to compensate for a growing list of economic woes that now includes deepening recession in Europe, signs of serious economic fatigue in China, sharply rising U.S. mortgage rates, a cooling in auto sales and, most recently, news that America’s manufacturing sector is in its steepest slump since the recession allegedly ended in 2009. The Great Recession (upper case) continues nevertheless -- if not statistically, then at least in anecdotes drawn from the day-to-day lives of our friends, neighbors and former co-workers.  How ebullient could we be, given that statistical recovery has been far too feeble to have had much of an impact on jobs, wages or – here’s a concept seldom discussed any more -- capital investment?  In fact, the lion’s share of investable dollars has gone mainly into housing, stocks and Treasury debt, creating just enough of a wealth effect to distract us from the actual economy’s persistent miseries.  But with home prices up 11% since last March, who cares about $5 gas, surreal increases in the cost of health insurance, the imminent bankruptcy of Detroit, and other trifling details of economic life in America? Lowering Expectations With Bernanke behind the curtain, and his lazy, economically ignorant lackeys in the news media ever eager to