Wednesday, June 26, 2013

This rally is sucker-bait, but we may not get a chance to short the 1604.00 target given here yesterday, since the futures struggled without success to reach a lesser target at 1594.25 (see inset).  The target remains valid nonetheless, but it should be shorted only with 'camouflage' because it coincides with an obvious structural resistance recorded on June 21.  This gambit is for experts only, since a print at 1594.25 would create a bullish impulse leg on the chart shown.

We'll look for ways to short this rally aggressively if it continues, since only a fool or an economist could fail to understand that the steep rise in mortgage rates has already ended America's fraudulent housing boom, and with it the brazen deception that the Great Recession ever ended.

Forecasting the stock market’s price swings accurately is just a cheap parlor trick, as we often like to remind subscribers.  For the most part, and notwithstanding the diligent efforts of Wall Street’s Masters of the Universe to manipulate shares to their advantage, we see technical evidence each day that suggests that stocks and commodities are ruled by a sort of cosmic metronome. If you’re skeptical, we would urge you to visit the Rick’s Picks chat room sometime and see for yourself that predicting the exact highs and lows of minor trends has become a matter of routine for many of the technically trained ninjas who frequent the room. Far less predictable, however, are the kind of seismic events that make headlines and which have the potential to shake the financial world to its core.  Indeed, speculating about what might happen the next day, even the most gifted market seers cannot but hazard a guess as to whether the Dow Industrials are about to plummet by two-thousand points or instead rise by as much.  Thus do the market’s more or less predictable ups and downs ultimately do the bidding, not of algorithms and trading machines, but of a fearsome, id-driven hybrid of insect, reptile, sea monster and rabid dog. Traders step into the cage with this diabolical creature each day and take its measure not really knowing whether it is about to lull us to sleep, or instead rewrite history with a feat so stunning that even those who have observed the markets for 50 years will be numb with shock. Lulled to Death But as long as stocks continue to move mainly in one direction, as they’ve been doing since March of 2009, we tend to see, not the nightmares of investors’ collective subconscious, but a quite normal species that