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Citigroup Can Predict the Top

December 19 2006
We’ve had our crosshairs trained on a 13045 Dow target since late September, convinced the blue chip average would get there come hell or high water. Now, a similarly outlandish target has emerged in Citi, until recently somewhat of a laggard in an otherwise very strong banking sector. Our precise objective for the stock lies at 64.73, a Hidden Pivot that’s about 9 dollars above yesterday’s...
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Street's Blowout Spills into Malls

December 18 2006
With some key averages reaching record highs on Friday, the Dow Industrials have now come within 530 points of the 13045 target first broached here several months ago. I was incredulous then and remain so, but what’s a chartist to do when the technical indicators points unambiguously higher?  For my part, I’ve simply stuck with a few mechanical indicators...
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Will Boomers Shun Florida?

December 15 2006
If you’re looking for rock-bottom bargains in real estate, try south Florida – a decade from now, that is.  Ever wondered what’s going to happen to all of those quiet...
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Will Boomers Shun Florida?

December 14 2006
If you’re looking for rock-bottom bargains in real estate, try south Florida – a decade from now, that is.  Ever wondered what’s going to happen to all of those quiet...
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Can Fed Really Avert Deflation?

December 13 2006
With the Dow average down 75 points in the early going yesterday, it felt for a little while as though the stock market was about to take an emetic plunge. Instead, the blue chip average got traction just above Friday’s lows, then rallied to finish slightly down on the day. From the looks of the chart below, we’re inclined to view this go-nowhere action as consolidation rather than distribution – a...
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China's Role In a Deflation

December 12 2006
“How the Global Boom Might End” is the title of a Sean Corrigan essay just out from Mises Institute. Corrigan’s think-pieces are always enlightening, and although this one gets the point across, I found it very heavy going. Moreover, he reveals a degree of optimism about the global economy that is arguably unwarranted. Some readers might have inferred as much from the article’s title, which could be...
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The Fat Lady Is Warming Up

December 11 2006
Check out the chart at bottom, which is complete through Friday. Is this an internet-stock-on-steroids – Google, perhaps? An oil company that just hit a gusher? A drug stock with a promising new treatment for cancer? Guess again. The chart shows price action in the world’s largest bank, Citigroup. Even in the context of two years’ worth of ups and downs, Friday’s thrust looked pretty impressive. The...
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Lying Our Way To Prosperity...

December 08 2006
Hard to believe stocks went all wobbly yesterday in nervous anticipation of payroll numbers due out this morning. With Ford and GM drifting steadily toward bankruptcy, and what remains of America’s manufacturing economy dying from the economic equivalent of pancreatic cancer, what sort of “numbers” could Wall Street possibly be looking for?  The ironies...
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Deflation's Power Lost to Ignorance

December 07 2006
Shares of bellwether IBM are on the move once again, beckoning the broad averages to get back in bullish gear. We died holding IBM November 95 calls last month, but with the stock now pushing against that strike with eight trading days to go before December expiration, we’ll be looking for the rally to reach the century mark, and soon. In percentage terms, a similar move by the Dow Industrials would...
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Deflation's Power Lost to Ignorance

December 06 2006
Shares of bellwether IBM are on the move once again, beckoning the broad averages to get back in bullish gear. We died holding IBM November 95 calls last month, but with the stock now pushing against that strike with eight trading days to go before December expiration, we’ll be looking for the rally to reach the century mark,...
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Yuletide Nuttiness ...and $2500 Gold!

December 05 2006
It’s beginning to look a lot like Christmas on Wall Street, with stocks acting nutty enough to suggest that my 13045 target for the Dow isn’t so nutty after all. At Monday’s highs, our surreal target lay a little more than 700 points above. That’s about two weeks’ worth of upside in a blow-off scenario, which is what I’ve been...
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Sydney's Great, But No Nicole...

December 04 2006
Sydney turned uncharacteristically dreary over the weekend, drenched last night by a torrential downpour that arrived amidst severe drought. Supposedly, it rains here only about 90 days a...
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Is a $20M House Ever a Bargain?

November 30 2006
Here’s a story that nicely encapsulates these interesting economic times, from the front page of Wednesday’s San Francisco Examiner:  “Agassi suffers a loss – in sale of Tiburon home.”  Who could have predicted, just a few short years ago, that someone selling a home for $20 million would have lost...
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Inflation Worries Vex the Ignorant

November 29 2006
Wall Street took a hawkish speech by Helicopter Ben in stride Tuesday  as stocks turned in a mixed performance on signs that inflation evidently is still a concern at the Fed. It’s hard to understand why the bankers should be so worried, given that home prices on Tuesday recorded their biggest drop since the government began tracking the...
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Almost Like Being in Love

November 28 2006
Admit it: Yesterday felt right as rain. The Dow Industrials opened down nearly a hundred points and looked like hell all day. It was almost like being in love. We’ve waited many months for the stock market to register at least a dim recognition of the disaster taking shape in the U.S economy, and Monday’s effort may have provided a good start. Now, if sellers can just string...
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Fear of Collapsing Dollar Premature

November 27 2006
Pretty sneaky for the world to frag the dollar the other day, when U.S. markets would surely have preferred to loll about in a traditional Friday-after-Thanksgiving stupor. So what’s next for the greenback? A Christmas-Eve gang-bang, perhaps? In any event, we should always pay close attention when the dollar is getting savaged, since the sums involved are probably sufficient on a...
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Remarkable Tale Of '100 Friends'

November 22 2006
Let’s avert our eyes from the stock market today so that we might consider instead the heartwarming saga of Marc Gold, a childhood friend of mine whose good works have attracted the attention, most recently, of the San Francisco Chronicle and radio station WBEZ in Chicago. Marc is the founder of the 100 Friends Project, and his goal is to give away as much money as possible to the...
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Outlook for Gold: Look at a Chart!

November 21 2006
With rumors swirling on Monday concerning supposed Saudi bullion purchases, Rick’s Picks subscribers tuned to the chat room wanted to know only, “Where’s...
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"Da Boyz" Is...Us!

November 20 2006
You had to marvel at the muted, insidious perfection of yesterday’s expiration-day dirge – a jazz funeral of sorts for near-the-money November puts and calls. Rick’s...
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Gay Bath House All in Day's Work

November 17 2006
On a magnificent fall day, over lunch at Sam’s in Tiburon, I spent as pleasant an afternoon as I can recall, reminiscing with my old partner in crime-solving, Kyle Rimdahl, and his helper Dorothy Jansizian. In the early 1990s, we worked together for the late Hal Lipset, the celebrated...
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Gay Bath House All in Day's Work

November 16 2006
On a magnificent fall day, over lunch at Sam’s in Tiburon, I spent as pleasant an afternoon as I can recall, reminiscing with my old partner in crime-solving, Kyle Rimdahl, and his helper Dorothy Jansizian. In the early 1990s, we worked together for the late Hal Lipset, the celebrated...
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Take the Odds On IBM Bet...

November 15 2006
Our IBM Nov 95 calls looked brain-dead when I left for breakfast at a Berkeley eatery yesterday morning. What a difference 90 minutes can make!  The stock had begun the morning on weakness,...
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Fed Will Tighten When Mars Attacks

November 14 2006
With the Consumer Price Index for October due out this Thursday, every investor and economist in bozo-dom is anxiously awaiting the latest shot-to-be-heard-’round-the-world. How utterly ridiculous that we should continue to obsess each month over whether the price of a dozen eggs, or a gallon of gas, has risen by a few pennies when there is a $10 Trillion deflationary juggernaut...
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This Bull Can't Be Trusted

November 13 2006
December Crude has taken its sweet old time falling to the Hidden Pivot target at 56.76 that we flagged here three weeks ago, but at yesterday’s lows the futures lay within just 11 cents of that predicted bottom.  Curiously, stocks seemed largely unmoved by the seemingly beneficent price action, which should have pleased everyone but...
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Gold Dancing To Our Tune

November 10 2006
The Democrats got a somewhat churlish reception on Wall Street yesterday, suggesting there may not be much of a honeymoon in the wake of Tuesday’s sweeping political changes.  We were prepared for any outcome that would make stocks get a little crazy, but it’s too soon to tell whether it will be the calls we hold in IBM, or the QQQQ puts...
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Business as Usual The Big Winner?

November 09 2006
This is a stock market that loves to break all the rules, so perhaps we should expect the nagging uncertainties of a still-unsettled Congressional election to cause shares to rise. Wall Street supposedly abhors nothing so much as a future that is up in the air, but we may not know for weeks whether the Democrats will control both houses of Congress. Big Pharma seems to have made...
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Hold Your Nose, Pull the Lever...

November 08 2006
Maybe it’s the same story in other Congressional districts, but the race here in Colorado between Angie Paccione and Marilyn Musgrave makes a cathouse brawl seem like a quilting bee. I’ve been zapping out the sound whenever their TV commercials have aired and didn’t even know till today which one was the Democrat and which the Republican. ...
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Fuse Lit, We Wait...

November 07 2006
Is the stock market likely to go crazy after the election? A betting man might be tempted to take the odds on that one, since so many observers evidently expect angry voters to deliver a jolt of electricity to Wall Street’s vitals today. The rough consensus among forecasters I respect calls for a short, nasty correction beginning as soon as tomorrow, followed by the resumption of...
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Gold Setting Up For Big Thrust?

November 06 2006
December Gold hit our bullish target yesterday but couldn’t get past it, suggesting that some further consolidation may be needed to set up for the next big push. We’d projected a rally to at least 630.60 a few days back, and that’s almost exactly where the futures stalled yesterday, at 631.40.  However, if they...
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Short Squeeze Ready to Pop?

November 03 2006
Going back to July, the Dow’s current correction, now five days old, ranks as one of the biggies. I use that word facetiously, since in percentage terms the pullback at yesterday’s lows amounted to a piddling one-and-a-half percent from the record high of 12167 recorded on October 26. As you can see in the chart below, the correction is about halfway to the oversold zone,...
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Gold Says "UP!" Loud and Clear

November 02 2006
Gold has been moving to our Hidden Pivot targets almost to-the-tick. Yesterday’s forecast, for one, had called for a rally top at 617.50, and that is precisely where the Comex December contract paused after completing the $17 thrust we’d projected. Where to next? I broached two bullish targets in the chat room whose provenance is shown on a chart reproduced in...
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Lender Says Law Hits Deadbeats

November 01 2006
My comments here the other day about the harsh new bankruptcy code continue to elicit interesting responses. Below is a letter I received yesterday from a mortgage lender who thinks that narrowing the escape route for profligate borrowers will have a positive benefit for the rest of us. This may be true to the extent that the costs to prudent borrowers of subsidizing deadbeats who...
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Insider Condemns Bankruptcy Law

October 31 2006
Yesterday’s commentary on the new bankruptcy  laws elicited the very interesting response below from an insider, a New Jersey lawyer who is in the thick of it. Though less pessimistic than I about the long-term impact of the new law, he sees it nonetheless as restricting consumer spending, possible severely. He writes as...
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Bankruptcy Code A Ticking Bomb

October 30 2006
For once, Teddy Kennedy got it almost right. Referring to the country’s draconian new bankruptcy code, enacted last year under the cynically titled “Abuse Prevention and Consumer Protection Act,” Kennedy called it “an attempt by the credit card industry to “squeeze an extra few dollars a month out of Americans who are down on their luck.” Kennedy has captured the spirit of the...
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Bull Market? Don't Bet on It

October 27 2006
A few words concerning my unwontedly rosy forecast for the Dow Industrials. My prediction that the blue chip average eventually will achieve 13045 was not inspired by any particular thought, nor by events that may have occurred or which could conceivably occur, in the real world. It is in fact a coldly mechanical objective derived from the long-term charts, and in its coldly...
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Where's the Harm Shorting Horton?

October 25 2006
It was morning in America yesterday on word that mortgage applications had risen 0.5 percent in the latest week.  Investors lost little time bidding up the shares of some beleaguered homebuilders that we’ll always be thrilled to short at fat prices. And we did -- in the...
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Gold & Deflation IV

October 25 2006
There may be some forecasters who think the Dow eventually will surpass the 13045 target I’ve been touting here for the last month, but certainly none who are more bearish on the economy than I.  Not even Bob Prechter, who recently lobbed a 13000 target of his own into the firmament of bullish mind-benders. There would appear to be two...
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A Subtle Sign Of Turn in Gold?

October 24 2006
We’ve been monitoring Gold’s vital signs very closely lately, since that may be the only way an investor could hope to jump back in without fear of getting maimed. Although my intermediate-term forecast calls for a potentially important low at $513, we remain open to the possibility that the turn could occur from higher levels. Right around here, perhaps?...
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$900 Gold In 2007?

October 23 2006
Gold at $900 an ounce in 2007? That’s what one well-known forecaster predicted at the Committee for Monetary Research and Education’s annual fall dinner on Thursday in New York City, and he made a pretty persuasive case. Paul Van Eeden’s...
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Best & Brightest Convene in NYC

October 20 2006
I’ve stayed on in New York City in order to attend the fall dinner of the CMRE – the...
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No Sellers Left?

October 19 2006
I’m not sure whether it was sent in jest, but I got a “say it-ain’t-so-Joe” note from a friend yesterday bearing the following subject header:  Ackerman, Last Bear, Capitulates? The answer depends on whether you’ve been following my forecast for the stock market, which has been very bullish, at least for the...
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Inflation, Where Is Thy Sting?

October 18 2006
The “core” producer price index rose an ostensibly whopping 0.6 percent in September, but only an economic nincompoop could be truly concerned about it. We prefer simply to re-add it to the list of red herrings currently distracting investors from reality. We should also note that it is one of the most abysmally stupid popular myths to have survived the late, great asset boom. With that boom now...
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Earnings Irrelevant To Stampeding Bulls

October 17 2006
Stocks marked time on Monday, allowing the purveyors of tired wisdom to rev up the silly notion that the avalanche of economic data due out this week will have some significance on the performance of shares over the near-term. We would argue otherwise -- that the Dow is in the throes of a thousand-point rally come hell or high water and that, furthermore, corporate earnings, no matter how bad, will...
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The Crazy Logic Of Dow 13000

October 16 2006
  The pundits are wildly atwitter following Friday’s record high in...
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"All the News," New York-Style

October 13 2006
I’m in New York, attending to final arrangements for this weekend’s Hidden Pivot seminar at the West Side ‘Y’ conference facility. I am also tanking up on sundry pleasures that will not be available on my return to...
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Clear and Precise Numbers for Gold

October 12 2006
The outlook for Gold is a pressing concern in the Rick’s Picks chat room on most days. Indeed, if bullion prices move merely a few dollars either way, I’m likely to be asked whether my outlook has changed significantly. Take yesterday, for instance. The December Comex contract was in the throes of a $10 rally, seemingly bucking my prediction in the day’s commentary that gold would...
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Will Crude Pull Gold Down $40?

October 11 2006
As mentioned here earlier, a 589.60 print is all it would take to jump start gold. So far, though, the December contract has acted like that’s a leap to the moon. Far from it, in fact.  The futures actually got as high as 585.50 early Tuesday morning, close enough to our bull trigger price that just a little nudge from the oil patch...
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Gold-Price Jitters Thing of the Past

October 10 2006
Seismographs and satellite cameras may have registered the force of Sunday’s nuclear explosion in North Korea, but it barely caused a ripple on the world’s stock exchanges.  U.S. shares were narrowly mixed, while Asian stocks barely budged. South Korea’s Kospi index suffered the biggest loss of all, but it was only 2.4%....
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Rumors Perk Up Gold Bugs' Day

October 09 2006
So much for my prediction here yesterday that bulls would celebrate the release of  payroll figures on Friday no matter how many new jobs were alleged to have been added to the U.S. economy. As it happened, the number fell well shy of estimates – 51,000 new non-farm jobs versus an expected 125,000. Ordinarily we might have expected such...
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All of the News Is Bullish Now

October 06 2006
Payroll figures will be out today, but we should expect stock market bulls to run with them no matter what they show. Wall Street is expecting a Commerce Department report due out this morning to say that 125,000 jobs were added to the economy in September, slightly more than in August. But if stocks continue to climb today as they’ve been doing on most days since mid-July, expect...
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Hey, Lurkers: Watch Citigroup!

October 05 2006
The silliness has quite a ways to go before our DJIA target at 13045 is reached, but yesterday’s show of exuberance will surely have earned the bulls the benefit of the doubt, if not the heart-felt respect of bears, for the time being. By way of earlier Rick’s Picks recommendations, we’d been riding call options in two high-beta performers – Merrill Lynch and Citigroup – but...
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Error in Newmont Costs Us Little

October 04 2006
Skepticism continues to be our most potent defense these days against losing our shirts in the precious metals sector. That, and more than the usual amount of caution, since Gold’s worst correction in many a year shows no sign of ending. How else to trade an asset class that in mere weeks could be down a further 15 percent -- or up 25 percent, for that...
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Managing Risk In Gold Futures

October 02 2006
The chat room at Rick’s Picks continues to be a great place to hang out for anyone wanting to keep close tabs on bullion and...
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Shorting Gold While We Wait

September 29 2006
We’re taking bullion’s possibly gratuitous ups and downs one day at a time, with results that may at times seem more gratifying to traders than to long-term investors. Fortunately, some of the gold bulls who have been active in the...
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Gold Trips Bull Signal

September 28 2006
Gold jumped back on a bullish track Wednesday as December futures pushed above a benchmark at 607.10 that we’d flagged here a couple of days earlier. From a Hidden-Pivot perspective, this feat would look more promising if the move above the two prior peaks shown in the chart had occurred in a single bound, so to speak, rather than in two separate segments. But the rally was...
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The Risk In Gold

September 27 2006
Today’s headline could just as easily have been “The Beauty of T-Bonds,” but we’ll get to that in a moment. I just wanted to make sure I had the attention of gold bugs, who have been on my mind lately. They have been a voluble and engaging presence in the...
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Gold Trigger Lies at 607.10

September 26 2006
With an unachieved downside target at $513 in December Gold, I am trying to be as conservative as possible about signaling an important, bullish turn. We don’t want to risk being premature buyers if the price of gold, currently just below $600, still has more than $80 (about 14 percent) to fall. In that context, how bullish was yesterday’s v-shaped rally, which saw bullion futures...
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One Indicator Not So Ominous

September 25 2006
Technical signs that a major top is in continue to accumulate, some of them ominously coincident with the autumn equinox and yesterday’s solar eclipse. On the S&P chart, MACD and relative strength indicators are flashing red, and support for Dow stocks is breaking down at the 10-day moving average....
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A Silent Crash In Home Prices

September 22 2006
With Bay Area homes sales hitting nine-year lows, there’s at least one economist who knows a bust when he sees one: “The market is flat and the bubble has popped,” said Chris Thornberg. And while some in the real estate business may have been encouraged by yesterday’s decision by the Fed to leave administered rates unchanged, Thornberg sees a problem that has been growing far...
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Who'll Be Next Professor Fisher?

September 21 2006
Let the Dow Industrial Average get within a hundred points of new record highs, as it did yesterday, and America’s economic troubles seem to melt like lemon drops. “I think this market action is telling us that the economy may be past its worst point,” Wells Capital’s James Paulsen told the Wall Street Journal, evidently inspired by yesterday’s 72-point gain in the blue chip...
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Downside Targets For Silver & Gold

September 20 2006
Gold stocks got pounded once again yesterday, buttressing an earlier forecast here of a further decline in December Gold futures to at least $513. We’ll continue to fish for a bottom in selected stocks as gold falls, since this can nearly always be done without risking much more than small change; however, I have my doubts that any significant turn will occur before the target is...
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Construction Man Sees No Bust Yet

September 19 2006
If the stock market is about to get short-squeezed to new record highs, a possibility I raised here the other day, what would be the catalyst? A plausible answer can be glimpsed in the very interesting letter that I received recently from a...
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Is Dow Staging For Moon Shot?

September 18 2006
Considering the viciousness of the short-squeeze on September put options that bears just endured, we might well ask what lies in store for us in October? Logic suggests that if the pessimists were willing to bet heavily on a September crash, as they evidently were, then they will be betting even more aggressively on a crash in October, historically the worst month for...
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Turning Point For Newmont?

September 15 2006
Here’s some trading-floor wisdom that could suit us well as we continue to fish for a bottom in gold: When attempting to catch a falling piano, one should always wait until it has bounced three times.  Or so the saying goes.  Yesterday, however, we threw caution to the wind, opening our arms...
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Has WSJ Gone Off Deep End?

September 14 2006
The Wall Street Journal’s respectability is fading fast. Consider this story, from yesterday’s front page: “Fashion Dictates // Well-Dressed Men // Will Show More Leg,” in which a Journal reporter labored to convince us, with barely a trace of the usual Column Four irony, that “Shorts With Sports Coats Are a Trend That’s Back.”  Maybe on...
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An Algorithmic Frankenstein...

September 13 2006
Judging from the way stocks have been getting short-squeezed this week, traders must have been loaded to the gills with September put options. My technically savvy friend Tom Tankka pointed this out to me, along with the sad observation that our mutual friends from the trading world have been dropping like flies, so very challenging is the current investment environment. It is at...
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The Jersey Shore

September 12 2006
What amazed me most during my recent visit to the Jersey Shore was that a house in Longport, easily the most boring town in America for any kid who grew up there, had just changed hands for $7 million. I don’t know who the buyer was, but it would not likely have been a “local,” since anyone who grew up in or near Longport, as I did, would never have paid such an exorbitant sum for...
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Hard-Core Bear: 'No Depression'

September 11 2006
Is the Second Great Depression on its way? Not according to Bob Bronson, whose downbeat quantitative forecasts have been featured here often. Bob predicted the current housing bust fully two years earlier than most of his colleagues, and I don’t mean to suggest that he was premature. In fact, using rigorous analysis, Bronson Capital Markets Research saw a topping pattern in real...
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Small Dip Could Dim Gold Outlook

September 08 2006
Several subscribers who dropped by the Rick’s Picks chat room yesterday morning were looking for a promising spot to buy gold,...
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Katie's Big Belly Flop

September 07 2006
After a drum roll that lasted practically the entire summer, Katie Couric finally took her flying leap last night, belly flopping with such a spectacular splash that only those who wish her ill could have sat through the whole, jaw-droppingly bad show from beginning to end. What could the brass at CBS have been thinking when they decided,...
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Katie's Big Belly Flop

September 06 2006
After a drum roll that lasted practically the entire summer, Katie Couric finally took her flying leap last night, effecting a belly flop so spectacular that only those who wish her ill could have sat through the whole, jaw-droppingly bad show from beginning to end. What could the brass at CBS have been thinking when they decided, apparently, to promote this as the biggest TV...
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Soon, the Rush To Thanksgiving

September 05 2006
  Summer in Colorado has passed with alarming speed, slowed hardly at all by a recent family trip to...
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A Pickoff Play In Natural Gas

September 01 2006
Natural gas quotes have fallen relentlessly, to as low as 5.39,  since peaking last December near $16. Under the circumstances, it seemed like a good time to try bottom-fishing in the October futures, especially since seasonal factors for this commodity are now bullish. The trade worked out nicely for anyone who used a stop wider than a...
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Is the Market Unshortable?

August 31 2006
I tried lowering the bar yesterday to see if it might help buyers meet our very modest rally expectations, but even that didn’t work. We were looking for the Mini-S&P to choke, wheeze, gasp or otherwise struggle its way up to 1309,00,  a Hidden Pivot that promised to reward shorts with a quick payoff and relatively little risk. It...
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Is the Market Unshortable?

August 30 2006
I tried lowering the bar yesterday to see if it might help buyers meet our very modest rally expectations, but even that didn’t work. We were looking for the Mini-S&P to choke, wheeze, gasp or otherwise struggle its way up to 1309,00,  a Hidden Pivot that promised to reward shorts with a quick payoff and relatively little risk. It...
» Read more

A Pregnant Pause Keeps 'Em Buying

August 30 2006
The market shrugged off some atrocious consumer sentiment numbers on Tuesday, obsessing instead on tea leaves that would seem to imply that the Fed might not do anything more with interest rates -- at least, quite possibly, not for a while. Just the kind of thing to get Wall Street’s juices flowing these days, albeit lacking sufficient hydraulic pressure to...
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And Speaking Of Easy Money...

August 29 2006
The newly opened Rick’s Picks chat room is proving useful to market-watchers and swing-traders, eliciting some important targets...
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Nostalgic for Easy Money

August 28 2006
I’ve been around professional traders for nearly thirty years, but I can’t recall ever hearing a one of them remark that it was particularly easy to make money at the time. It is only in retrospect that we wax nostalgic over the relative felicitousness of the markets at various times in the past. There was 1974, for instance, a year after listed options began to trade on the...
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Hard Logic Refutes Another Inflationist

August 25 2006
Although I had grown weary of explaining why deflation is the only possible outcome for our mortally sick economy, a chat group that I monitor drew me into an argument with someone who sees only the possibilty of inflation. The crux of his case is that, even though deflationary catalysts such as an incipient real estate recession are present, “the government has already planted...
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Housing 'Volatility' Too Rosy a Forecast

August 24 2006
“Housing Prices May Become More Volatile”. Where do they dig these stories up? The headline, lifted from the latest edition of The Wall Street Journal, is a real classic of the genre in the Sugar-Coated News category. We infer from the word “volatile” that in the years to come, home prices can be expected to both rise and fall at least...
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Child Molester As Comic Relief

August 23 2006
The news media have done themselves proud with their non-stop coverage of JonBenet-murderer wannabe,  John Mark Karr. Of course, practically everyone in America knew within hours of when the story first broke that it was bogus. Karr’s confession began to leak air when his estranged wife said he was home in Georgia when the murder took...
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'Dreaded Day' Has Arrived

August 22 2006
August 22 has been widely advertised as a date to be feared on the Islamic calendar. It corresponds to the 27th day of the month of Rajab, when the prophet Muhammad is said to have ascended to heaven on the winged horse Buraq. Would Islamic terrorists attempt to commemorate such an occasion with a spectacular attack on the West? Let’s hope not. But it may be comforting...
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Deflation Monster Enters on Tiptoes

August 21 2006
The U.S. economy continues to edge toward recession, although you’d never know it from the way the stock market has been acting. Shares finished the week moderately higher on Friday, up for a fifth straight day on a flurry of reports...
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Great Time Not To Buy a Home

August 17 2006
Can you spot the glimmer of wishful thinking in the following headline, culled from the San Francisco Chronicle? Here it is, just as it appeared in Wednesday’s editions above the fold, front page: “Home sales fall as prices flatten //...
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Important Top Due in Weeks?

August 16 2006
My technically savvy friend Garrett Jones thinks a pullback in gold later this month could provide the last good buying opportunity in quite a while. He also sees a potentially important turning point for stocks if they continue to rise into the beginning of September. That would coincide with the end of a four-year cycle that we usually associate with important lows. This time, however,...
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Low Volatility Ripe for a Buy?

August 15 2006
Mark Klizas is a trader, a seasoned technician and former colleague of mine from the floor of the Pacific Stock Exchange. Below, he shares some observations concerning the Volatility Index (VIX) that could open the door for us as traders. Mark thinks volatility is a buy at these levels, and here’s...
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Larry King, Thanks For Taking My Call

August 14 2006
I spent Friday in transit, catching the news at-at-a-glance in airport lounges between Denver and San Francisco. Anticipating long security lines at DIA, I got to the airport nearly three hours before my...
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Life Goes On...

August 11 2006
Battle-hardened contrarians would have had a field day on Thursday, what with stocks rallying, and oil and gold prices plummeting on a day when the world probably should have been frozen with fear. As it happened, fear of the visceral kind was almost nowhere to be found, at least not on the network news. At first glance, it would appear the terrorists not only failed to blow up...
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Stocks Fell Because...

August 10 2006
The stock market appeared, finally, to have taken notice yesterday of world events. Or did it? The Dow Industrials fell nearly 100 points, prompted, according to some observers, by news that Israel’s ground war in Lebanon had entered a new and greatly expanded phase. “Startling developments!” was how Fox sold this breaking story. But if the markets were truly rattled by it, then...
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Making Book On Armageddon

August 09 2006
My friend Chuck traded pork bellies for a while on the Merc, until the day he showed up in the pits tripping on LSD. He claims to have made money that day, but not before drug-induced flights of fantasy led him to think long and hard about the slaughterhouses that would actually take delivery on hog contracts he was buying and selling with the wave of the hand. By day’s end he’d...
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No Time to Be Contrarian Hero

August 08 2006
Sellers were even meeker than usual yesterday, wary of  setting themselves up for a goosing ahead of  today’s Fed announcement. Futures markets were indicating a more-than-80 percent probability that the central bank won’t raise administered rates above their current 5.25%. If so, it would mark...
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Sleazeballs Rout Bulls and Bears

August 07 2006
Stocks finished slightly lower on Friday, a fact that could have satisfied neither bulls nor bears. Although each had a chance to carry the day, in the end only the canniest of opportunists could have come out ahead. Da Boyz raped buyers on the opening simply by stepping aside for the first fifteen minutes or so, letting stocks waft into bull-trap territory. Panicky shorts did all...
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Buyers Mock Wall of Worry

August 04 2006
Have stocks ever climbed a wall of worry so ostentatiously as they are climbing one now? Not that I can recall. With Iran threatening to goose oil prices to $200, all-out civil war erupting in Iraq, and Lebanon offering in microcosm all of the elements of a possible Third World War, investors somehow found ample reason yesterday to push the Dow Industrial Average 42 points higher....
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Money Karma

August 03 2006
I’ve always had quite a knack for finding parking spaces, even in neighborhoods where there’s a big event going on. If I’m cruising around in search of a space, the steering wheel seems to tug subtly to the left or right, guiding me onto whichever side street will have room for just one more car. Not to sound ungrateful, but there are times when I wish that I could transmute my...
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Free Chat Room For You Traders

August 02 2006
Rick’s Picks will soon offer a real-time trading chat room to...
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'For Sale' Signs Will Start Crash

August 01 2006
A silent crash is taking shape in the real estate sector, evinced by the growing number of “for sale” signs popping up on lawns across the U.S.  Even the staid New York Times has noticed, as this front-page headline in weekend editions attests:...
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Hold Your Nose And Stay Short!

July 31 2006
So, what do you do when you are short a market that stinks to high heaven but continues to move against you? In this case, as I explain in greater detail in the current edition of Rick’s...
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Iran, Hezbollah And The Bomb

July 27 2006
To understand how high the stakes are in the battle between Israel and Hezbollah, I’d suggest reading this analysis, published in the London Sunday Times:  “God’s...
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Stocks Extend Mini-Rampage

July 26 2006
Here’s a Wall Street Journal item from Tuesday that nicely encapsulates the current insanity: “Existing-home sales fell 1.3% in June and the inventory of unsold homes reached a new record, in further signs of a slowing housing market. However, a gauge of consumer confidence unexpectedly swung...
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No Blaming Ben For Latest Spree

July 25 2006
There’s no blaming Helicopter Ben for yesterday’s outbreak of irrational exuberance, but if not him, who? For perspective, recall the prediction made here in late May – that it would be a do-nothing summer for the stock market, with the Dow Industrials fluctuating meaninglessly between 10600 and 11200 until after Labor Day.  If you look...
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Shorting Papa Bear

July 24 2006
The stock market would be collapsing right now were it not for short-squeezes triggered by our intermittently dovish Fed chairman. However, it should be painfully clear after last week’s histrionics that each successive goosing of share prices is attracting fewer suckers. Indeed, when the Dow Industrials surged 212 points last Wednesday, inspired by Helicopter Ben’s most recent,...
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Stocks Love This War...

July 21 2006
War is good for stocks, as some old-timers like to remind us, so perhaps all that’s needed to push the Dow to new record highs is more Iraqs, Lebanons, Gazas  and Afghanistans? One could even imagine that a mushroom cloud in some already blighted corner of the world would be just the thing to send blue chip shares hurtling toward the...
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More Commentary Later Today

July 21 2006
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More Commentary Later Today

July 21 2006
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Stocks Love This War...

July 20 2006
War is good for stocks, as some old-timers like to remind us, so perhaps all that’s needed to push the Dow to new record highs is more Iraqs, Lebanons, Gazas  and Afghanistans? One could even imagine that a mushroom cloud in some already blighted corner of the world would be just the thing to send blue chip shares hurtling toward the...
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Suckers Buy Mideast Lull

July 19 2006
I got distracted after lunch yesterday and was somewhat surprised to see, in calling up some charts after the close, that stocks had gone all silly in the final two hours. My first reaction to the 116-point rally was to check a Google news page to see if world peace had perhaps broken out while I was on the phone. No such thing. In fact, Hezbollah was sticking to its guns,...
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Bulls Headed Toward a Cliff

July 18 2006
I’m once again baffled as to why any significant buying of stocks should have occurred yesterday, but it is a matter of record that the Dow did indeed rise eight points on the day. Perhaps investors have deluded themselves into believing, as someone in a chat group I monitor wrote, that it’s “just a regional conflict” with no serious implications for the world’s financial and...
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Stocks, Bonds Just a Sideshow

July 17 2006
Hezbollah’s vow of “open war” on Israel in retaliation for the attempted killing of its leader is all but certain to escalate the Middle East crisis, roiling the world’s financial markets even more in the days and weeks ahead. Stocks and bonds seem almost like a side show at the moment, since it is the steady rise in the price of oil that will...
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Who Were The Buyers?

July 14 2006
Stay down, you dumb sonofabitch! That’s what we felt like yelling every time the market tried to rally yesterday. With a regional firestorm threatening to erupt in the Middle East, a sane investor might have wondered why anyone would have bought stocks at all. Still, someone evidently did as shares staggered, wheezed, stumbled and tumbled their way lower, never mounting much of a...
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One More Leg Down?

July 13 2006
Da Boyz sandbagged the rubes who bought yesterday’s opening. Buying dried up after about ten minutes, then it was down, down, down for the rest of the day. I’d left you with an order to buy August DIA calls that got filled suspiciously easily, but instead of blowing them out when the market began to tank, we turned the position into a strangle by buying some August puts. This...
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No Cheerleading To Buoy Goldbugs

July 12 2006
One thing I’ve always promised my gold-bug subscribers is that I would avoid serving up hope by the dollop whenever gold was in the doldrums, as it surely is now. My guiding principle is that subscribers will be better served by rigidly objective technical analysis, even when the charts have little to say, than by forecasts buttressed by constant cheerleading. As you know, my long-term...
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Real Estate View From California

July 11 2006
“There is no housing bubble!” That would be no mere permabull talking, but rather a delusional, frothing-at-the-mouth, head-buried-in-the-sand, deny-it-unto-death permabull. One clinical notch below these nut-jobs are the ones who recognize that a housing bubble exists but think any danger it could pose to the U.S. economy would be limited to areas where real estate prices went...
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Hot Air A-Plenty

July 10 2006
I’m in Steamboat Springs with my family, enjoying a hot air balloon “rodeo” that has attracted scores of enthusiasts from all over the country. Nearly 50 balloons rose from the floor of the Yampa River Valley this morning at 7 a.m., stayed aloft for an hour or so, then drifted down into the neighborhoods in search of kids (and adults) looking for free rides to…wherever. The first...
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Is a Global Killer Lurking in China?

July 07 2006
Although I have taken few steps personally to prepare for a possible bird flu pandemic, I have several friends who have been diligently attending to this grim task. One is a childhood pal from New Jersey who has been stockpiling food and water while attempting to round up a supply of Tamiflu and other medications, including herbal remedies whose use dates back to Roman...
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Why Option Traders Lose

July 06 2006
I’m very picky about option brokers because many of my specific trading recommendations use puts and calls for leverage. Here’s the bad news about that: 99.99% of the brokers I’ve screened for the assignment flunk miserably, since they cannot execute your orders in a way that will leave you with even a prayer of making money....
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And Now, Back To Business...

July 05 2006
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Hoopla Fattens Herd for the Kill

June 30 2006
I had to peek at the Wall Street Journal’s market round-up to find out what allegedly caused yesterday’s wilding spree on the nation’s bourses. Here’s the answer: “Dovish overtones in the Fed’s rate announcement.” No kidding?  Well, I guess if the U.S. Supreme Court can operate within a “penumbra” of subtle inferences, then so can the...
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Investors Jittery, But About What?

June 29 2006
You know it’s a dull week when the dangers of second-hand smoke get top billing on the evening news. On Wall Street the usual “jitters” set in a day before the Fed was to announce its seventeenth rate hike in two years. To say that investors have been “jittery” about this implies only that they have been reluctant to push stocks one way or the other for more than a few hours....
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Why Rates Will Continue to Rise

June 28 2006
So much for my “double-bagger” scenario, which had the Fed raising interest rates 50 basis points on Thursday instead of the widely expected 25. That would have flashed a clear signal that the tightening cycle begun two years ago was over, giving Wall Street, with its addiction to loose money, reason to celebrate, even if only briefly. But if things were actually about to play out...
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Why Rates Will Continue to Rise

June 27 2006
So much for my “double-bagger” scenario, which had the Fed raising interest rates 50 basis points on Thursday instead of the widely expected 25. This would have flashed a clear signal that the tightening cycle begun two years ago was over, giving Wall Street, with its addiction to loose money, reason to celebrate, even if only briefly. But if things were actually about to play out...
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Bulls Smell A Stampede?

June 27 2006
Do investors smell a 50-basis-point rate hike coming later this week? I wrote here yesterday that a “double-bagger” would be quite bullish for stocks, marking a decisive end to a tightening cycle that has pushed administered rates from one percent exactly two years ago to a current five percent.  Traders apparently are...
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Big Rally Coming On 'Bad' News?

June 26 2006
Merrill Lynch’s David Rosenberg thinks it would make sense for the Fed to go for a double-bagger next week, raising administered rates by 50 basis points rather than the expected 25. I’d need three-to-one odds to take his side of the bet, but not because the idea itself sounds implausible. Actually, Rosenberg makes a pretty good case. He thinks it would be a good way for the...
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Subtle Signs In Comex Gold

June 23 2006
The signals in Gold have been mixed, to say the least, but there have been some subtle hints lately that the correction begun nearly six weeks ago may have run its course. Earlier in the week I’d said that a print above 595.10, basis the Comex August contract, would be mildly encouraging. The Auggies did indeed surpass that number, topping at 598.30 in the wee hours yesterday....
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Trading Options Like a Schmuck

June 22 2006
I made a nasty crack here yesterday about Charles Schwab & Co. that should be qualified, since the firm is a very good one that does more things right than most firms, and not just those in the brokerage business. I have elaborated below, in the context of a response to a recent subscriber’s note. He wrote me as follows, under the subject header,...
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Does Weak Bear Portend Tedium?

June 21 2006
Except for the weatherman, guys who make a living predicting things can’t be entirely comfortable predicting that “not much is going to happen for a while.” An extended forecast of “partly sunny and mild” may go down easy with TV viewers, but just try telling a bunch of traders and investors that the stock market is about to turn tediously uneventful for the entire summer. What...
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Paying Up To Get Short

June 20 2006
I’m a real tightwad when it comes to buying puts and calls, since the odds are so heavily stacked against retail option players that one cannot afford to give up even a dime of edge when entering or exiting a position. That said, it is becoming increasingly obvious that put options are no longer available in quantity at bargain prices, if at all, and that we may have to pay...
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Housekeeping On a Quiet Day

June 19 2006
Friday proved to be a triple-witching dud, the broad averages having shown no pluck at all following their whoopee cushion rally a day earlier. Still, by next Wednesday it could look like a one-day pause in a short-squeeze that has yet to play out. Fortunately, even without much price movement we were able able to make some position adjustments that have pared risk in some of...
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As Citi Goes, So Goes Economy

June 16 2006
Another bear-squeeze like yesterday’s and some key stocks will be back up to levels worth shorting. Citigroup, for one. It soared like a condor yesterday, powered by bears who evidently stayed one day too long at the party. Here’s what the day’s action looked like 30 minute before the...
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Weasels At Work

June 15 2006
I have nothing but envy and admiration for the weasels who manipulate shares for a living, especially those of Citigroup, a stock whose seemingly helter-skelter movement on a chart can be as subtly purposeful as the queen’s peek-a-boo antics in a game of three-card monte. Concerning the “weasels,” I use the term affectionately, since I was one of them myself for twelve years,...
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One Support Left For August Gold

June 14 2006
Gold futures crushed an important hidden-pivot support at 599.40 yesterday, on their way to one of the worst single-day losses on record. The breach of the pivot, which I’d advertised here prominently, implies that the correction will continue to at least 549.40, basis August. That is the closest important hidden-pivot support below yesterday’s 566.80 settlement price, and it...
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Investment at Its Most Timid...

June 13 2006
Looks like it’s not just the usual bunch of numbskulls who have been buying stocks at these rarefied levels. Turns out that big companies buying back their own shares have been a major source of support for the stock market in recent months. S&P-listed firms bought more than $100 billion of their own stock in the first quarter of 2006, up 22 percent from a year earlier,...
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Playing Gold By-the-Numbers

June 12 2006
We have a bid in for August Gold, our first attempt to buy the stuff in nearly a month as we’ve waited for the correction to run its course. The bid is based on my minimum downside target for the Comex contract, 599.40, a hidden pivot first broached here a couple of weeks ago. A subscriber wondered in an e-mail message to me yesterday whether he should be picking up GLD as a...
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Zarqawi’s Death Bombs on NYSE

June 09 2006
If you were impressed by yesterday’s 200-point turnaround, don’t be. We’ve seen better rallies in an oncology ward. Considering the news – that one of the world’s deadliest terrorists has been silenced forever – we might have expected stocks to go wild. Instead, the Dow Industrials finished up just 7 points on the day after reversing a steep decline with the help of...
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Betting $200,000 On the Big One

June 08 2006
Here’s a Rick’s Picks  subscriber, Pat P., with $200,000 to burn. What would you do if you were in his shoes? He writes as...
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Iran Reacts!

June 07 2006
There’s nothing funny about Iran, not one single thing, but I had to stifle a laugh when this headline popped out at me at Google News: “Iran Reacts Positively to New Proposal”. It puts one in mind of the Tim Burton film Mars Attacks!, one of the wickedest satires since Dr. Strangelove. The film...
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How Putin, Iran Will Launch Gold

June 06 2006
I’ve long doubted the usefulness of head-and-shoulder patterns, since they tend to be everywhere you look for them. Still, there’s no denying that the one the Dow Industrial Average has been carving out since early March is quite a looker (see below). Yeah, it needs a little more development on the right shoulder to give it proper symmetry. But otherwise, it looks good to go for...
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Grand Fenwick Duchy Attacks

June 05 2006
The denizens of Grand Fenwick laid siege Friday after I published "their" list of news stories about the coming housing bust. The list evidently was compiled by bloggers at patrick.net, but it came to me in the form of an e-mail from someone who identified himself only as “Martin” and using the...
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Gold Turnaround Moves Into Focus

June 02 2006
If you’ve been wondering when gold’s correction will end, there may not be much longer to wait. There are three hidden pivots not far beneath the 630.70 low registered yesterday by the Comex August contract, the most bearish of them just a whisker under $600. I’ve provided exact numbers in my...
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Reader's Guide To Housing Bust

June 01 2006
The Rick’s Picks switchboard lit up like a string of Black Cats yesterday as alarmed readers responded to my wake-up call ahead of America’s impending real estate crash. The sole skeptic has been Frank P, a useful idiot whose thoughts served as counterpoint to the discussion we had on the topic yesterday. Turns out I’m not the only one Frank has been pestering with his odd ideas,...
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Optimist, or Doorknob?

May 31 2006
Yesterday’s sharp plunge looked like a prelude to…well, nothing, actually.  You don’t have to be a chartist to see that the entire 184 points of Tuesday’s decline failed by a country mile to take out last week’s lows in the Dow. For that reason, it barely qualified as a bearish impulse leg on the 15-minute chart, much...
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Some Perspective On Gold's Antics

May 30 2006
The broad averages finished the week with a pre-holiday rally that was all but ordained, but it remains to be seen whether the uptrend will mutate into a full-blown short-squeeze next week. Meanwhile, gold prices firmed after a weak opening, achieving little net gain for the day. We have a hunch that both will trend lower over the near term, although, as mentioned in Friday’s...
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A Package from The Unabomber?

May 26 2006
When opportunity knocks as loudly as it did yesterday, we should always check the peephole before opening the door. The opportunity I am alluding to is a stock market once again seemingly energetically on the rise. The Dow Industrials gained nearly a hundred points, and other broad indices rose along with it, making just about any stock that we might have been eager to short a day...
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Top Bears Capitulate

May 25 2006
My gut is telling me that we should short the bejeezus out of every rally that comes our way these days. Stocks feel like they are being held aloft, but only barely, as the smart guys prepare to bolt for the exits. Take the Dow Industrials. They’ve traced out a teepee in the last month and are now struggling to avoid breaking beneath its floor. Ordinarily, the consolidation...
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Stocks Swooned, Well, Because...

May 24 2006
Sometimes I’m thankful I’m not Scott Patterson, the Wall Street Journal reporter who has to explain each day why the stock market did what it did. His lead on yesterday’s market wrap-up showed promise: “A victory lap by stocks turned into a run for cover by day’s end.” But by the end of the next paragraph, he was threatening to run off the rails: “Higher most of the day, thanks in...
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It Ain't Over, Not Yet...

May 23 2006
The 636.00 correction target for June Gold touted here over the weekend came within less than a dollar of catching the exact low of Monday’s $40 swing. Even so, I have my doubts that the selling is over. Notice in the chart below that the entire day’s more or...
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Expect More Gold Selling

May 22 2006
Gold took a savage pounding on Friday, and although prices finished off their lows, more selling appeared likely next week. By my runes, the June Comex contract “should have” found support at 663.50, a well defined hidden pivot. Instead, the first time the futures encountered that number, on Friday morning, they smashed through it immediately. All subsequent rally attempts failed...
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Queensbury Rules No Longer Apply?

May 19 2006
I spent much of Thursday in a time warp, thinking and acting as though it were Friday. To make matters even more confusing, my web site proclaimed on an inside page – erroneously, I am told -- that it was Wednesday. So when stocks began to fall more sharply toward the end of the day – it was Friday for me, remember – I wondered whether the Queensbury Rules had somehow been revised...
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Guard Against Phony Gurus

May 18 2006
I could just about puke every time I get a promotional teaser in the mail from some guru bragging about his last Big Score. The put-and-call svengalis are the worst of the bunch -- and I would know, having traded options myself for more than 30 years, twelve of them on the floor of the Pacific Exchange. I always double-check the hype, and here is what I have determined: There is not a single option guru in America – at least none of the dozens of whom I am aware -- who even comes close to...
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Paint Is Drying On Wall Street

May 17 2006
A watchful day, albeit one with a resurgent bullion threatening to chew up naysayers and hock them into a spittoon, Jim French-style. Unable to find much to trade myself, much less to inspire, I swapped louche videos with pen-pals on my e-mail joke list. You...
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Gold Shakeout: Quick & Nasty?

May 16 2006
Via the bulletin launcher, I disseminated a precise correction target yesterday for June Gold as well as a recommendation to buy bullion futures (or the equivalent thereof) aggressively if and when the target is...
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Trucker Sees GM Crack-Up

May 15 2006
I’ve been dissing General Motors for years, baffled as to why anyone would choose a GM car over a Japanese model unless out of pure patriotism. Lately, the auto manufacturer has been busy rearranging the deck chairs...
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Plunge Team Versus Godzilla?

May 12 2006
Thursday’s plunge felt right as rain, at least to me it did. But if the weakness were to continue for another day or two, what to think? After all, it’s been a long, long time since the Dow Industrials experienced a decline of more than a hundred points two...
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Volatility Our No. 1 Export

May 11 2006
Glance at the chart below and you might think it was a hot new IPO on the Dubai stock exchange, or perhaps a coffee drinker’s EKG after he’s downed a triple espresso. But both...
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Yellow Flag Out For Gold Bulls

May 10 2006
Traders and investors who have been using my “hula numbers” to leverage gold’s resurgence one predictable stride at a time, please take note: The June Comex contract is stealing up on an important rally target that merits our return to caution, however briefly. The precise number is 709.50, a hidden pivot broached here earlier that has...
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Real Estate Fear Goes Mainstream

May 09 2006
The article below, from Fortune, is important because it shows that at least one big-circulation, mainstream business magazine is capable of speaking bluntly about the coming real estate crash. Granted, it includes a...
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We're Nibbling On Some Puts

May 08 2006
On Wall Street, every Friday is Whoopee Cushion Day, as we know, so the 139-point rally in the Dow should have surprised no one. Spirited as the buying was, however, it still left room for a little more fun and games next week. Specifically, my minimum objective for the Industrial Average is 11627, exactly 50 points above Friday’s close....
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Hula Number Now 709.50

May 05 2006
By featuring “hula numbers” for Comex gold, I’ve tried to take some of the guesswork out of trading an increasingly volatile bull market. Okay, so it’s also a marketing gimmick. But why shouldn’t a guru be made to dance a hula in...
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A Rod and Reel For Subscribers

May 04 2006
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Menacing Signs of Top

May 03 2006
New all-time highs for the Dow Industrials could conceivably come next week, but if and when they do, we should pay close attention to the technical quality of the rally. I’ve reproduced a chart below that shows how very perilous the rise from last May’s lows looks from a stochastic perspective.  Note that two of the three price peaks...
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Financial Supernova

May 02 2006
Take a look at the chart below if you want to see just how silly investors can get. I’ve deleted the title bar so that you can speculate on what it shows. Note in particular the bottle-rocket action of the last two price bars. Is this the chart of a company that has found a way to extract gold from seawater? To cure cancer…or...
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Gold Taunts Meek Buyers

May 01 2006
While I’ve expressed mild skepticism in the past that an ounce of gold will eventually change hands for $10,000, there is no longer much room to doubt that the old high at $850 is destined to fall. How long it will take for prices to blow past that peak and hit $1,000? Count me among the lunatics on this question, since I think it’s going to happen well before the end of the year and perhaps even...
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Stocks at Crucial Resistance Point

April 28 2006
While I cannot give you an ironclad guarantee we’ll see a major stock-market top within the next few days, the two charts below explain why we shouldn’t be too eager to bet against one. The first comes from Peter Eliades of...
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June Gold Staging For Push to $665

April 27 2006
I’ve been looking for an excuse to visit the Big Apple when Central Park is in full bloom this May, and here it is:  If June Gold doesn’t surge to at least 665.50 by mid-May, look for me in Times Square dancing the hula in a...
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Can Borrowers Handle 10% ?

April 26 2006
I ended yesterday’s commentary with a trick question:  What is the easiest way to make real returns of nearly 10 percent on one’s money? The answer is, there is no easy way...
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Finally Time To Buy Puts?

April 25 2006
Not that we should care, but the so-called Hindenburg Omen has flashed red again – for the fourth time since early April. To the weary pessimist this is supposed to be a bearish warning, akin to the groundhog emerging from his lair and getting his head sheared off...
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Dizzy from Gold? Get Used to It...

April 24 2006
The most powerful bull markets are invariably punctuated from beginning to end by wrenching spasms. Were it otherwise, we could all simply load up on bullion assets, quit our day jobs and go fishing as we watch our net wealth grow, day by day, along with soaring...
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April 22 2006
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Gold, DJIA Part Ways

April 21 2006
Gold quotes plunged yesterday without having quite reached the $657 rally target I’d projected for the Comex June contract. The actual high was $649, representing an $8 shortfall. Usually, when a trend fails by this big a margin my outlook for the intermediate term (i.e., three to five weeks) will change to bearish. However, I have my doubts that so robust a bull as this one will abide...
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Market Lull Just a Trick

April 20 2006
Don’t be fooled by the lack of follow-through yesterday, since it is exactly the kind of dullness we should expect from a stock market grown increasingly adroit over the last few years at goosing shorts. Realize that Tuesday’s 192-point rally was not the kind of event that...
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Getting High On Fed Hints

April 19 2006
The canny investor had just one thing on his mind yesterday: how all of the other bozos would react to news that the Fed may soon stop tightening. The fact that Wall Street has been anticipating exactly this news for umpteen months did nothing to mitigate the irrationality of those who stampeded to discount it yet one more time. Stocks zoomed higher because loose money is like crack cocaine for the...
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How High, June Gold?

April 18 2006
I can see as high as $703, basis June, but we’ll get to that in a minute. First let me mention that subscribers who followed my advice to-the-letter could have caught one heckuva ride in gold yesterday, having boarded the June Comex contract Sunday evening, just as it was lifting off the launcher....
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It's Bad News For Borrowers

April 17 2006
I had flagged a hidden-pivot support at 117^19 as a potentially important turning point for the beleaguered June 30-Year Treasury Bond futures, but sellers demolished it on Thursday, telegraphing a strong likelihood of still higher yields in the weeks and perhaps months ahead. The June CBOT contract had already traded as low as 117^17, slightly beneath the advertised turnaround pivot, but the...
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Housing Bust's 'Ground Zero'

April 13 2006
Fed chairman Bernanke and his cronies are said to be “confident” that the statistically compelling slowdown under way in the housing sector won’t much affect the U.S. economy. He evidently sees it as a case of a hot market cooling down...
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Iran Could Face Dreaded 'Plan B'

April 12 2006
If investors needed a wall of worry to climb, they’ve got one now. With oil prices again pushing $70 a barrel and Iran giving the finger to the world, worrying should come easy to market-watchers who are inclined to fret. To give the...
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Anti-Gold Cabal Is Batting .100

April 11 2006
So, the G-Men supposedly are at it again. Yesterday, they were spotted playing whack-a-mole with Comex gold when it poked its ugly little head above $600. Hey, give me a break! Where on earth do these conspiracy theories come from? Here’s an e-mail message I received...
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Helicopter Ben's Japan Fix-ation

April 10 2006
A debt deflation is not merely likely for the U.S. economy but inevitable, and that is why I no longer debate the issue in this forum. If the inflationists don’t “get it” by now,...
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Exploiting 'Bad' News

April 07 2006
Just when we were starting to get the hang of Wall Street’s bad-news-is-good-news reflex, they change the rules! Yesterday’s bad news was that March retail sales had fallen short of expectations, producing the weakest monthly increase in same-store receipts since November 2004. Now, there is no question that this is indeed bad news for an economy in which consumption has at times accounted for as...
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Gene Pitney: The Real Deal

April 06 2006
A big news day yesterday, what with Gene Pitney’s death in England and Katie Couric’s move to CBS. Taken together, these ostensibly unrelated events serve to remind us of how much better the Today show might have been if Pitney had...
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Will Gold Drag Oil Cost Higher?

April 05 2006
The good news, for reasons aired here yesterday, is that gold looks like it’s staging to blow past $600 and run up to at least $625 over the near term. The bad news is that it could pull crude oil quotes along with it. I proffer the chart below as evidence that this scenario may be about to occur. Although most technicians would regard Monday’s high at 67.90 as a double top of sorts, the fact that...
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$600 'Barrier' Will Fall Easily

April 04 2006
I’m back in my office after a somewhat relaxing week in the tropics, but it would appear that I didn’t miss much. The new week began yesterday with a feeble attempt by Da Boyz to short-squeeze traders who went home on Friday expecting the world to end, as some traders always...
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Abductees Win a Round

April 03 2006
Three months after being abducted by religion-of-peace advocates, Jill Carroll has been released. According to the New York Times, the freelance reporter had “kind words for her captors and says she was treated well.” Treated better the Daniel Pearl, for sure. Fortunately for those of us on the abductee side of the civilizational divide, fashions change, even among terrorists. Indeed, if Ms. Carroll...
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Girls Gone Wild? Not This Bunch...

March 27 2006
Friday was yet one more week-ending snoozefest, the sort of day when the patient trader might have reaped greater satisfaction watching Room Raiders than monitoring the tickertape. I was engrossed in the former, imbibing...
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Stealth Killer At the Pump...

March 24 2006
Crude oil prices reportedly “worried” investors yesterday, perhaps because there was nothing more menacing in the news. But look at the chart below. It doesn’t take a technician to see that the current uptrend in prices is yet another gratuitous stab into the mid $60s, as likely to be followed by a $4 or $5 decline as high tide is by low.  Face it, if...
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Precise Targets For Gold Bugs

March 23 2006
With gold’s bull-market correction now in its thirty-fifth day, investors in mining shares and precious metals are eager to know whether prices are likely to turn decisively higher any time soon. To save on guesswork I’ve reproduced a chart below of the Gold Bugs Index (HUI)....
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Can Bird Flu Be Beaten?

March 22 2006
I am fortunate to have as a pen-pal a guy who has tracked the global bird-flu menace closely enough to understand it in ways that the news media evidently do not. He got my serious attention a while back with some interesting (and so far, profitable) thoughts concerning which stocks to short ahead of an all-but-inevitable bird-flu panic. Is it...
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We'll All Be Billionaires

March 21 2006
Will the Dow Industrials surpass 11350, a threshold that I’ve characterized as crucial to the bullish case for the intermediate term? If Monday’s turgid action is any indication, the Indoos will get there eventually, but probably later rather than sooner, one mincing step at a...
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Housing Stocks Defy Pessimists

March 20 2006
Just when you though it was safe to factor a housing bust into your investment outlook, lo, the shares of the homebuilders explode like gas from a bloated corpse. Here’s what it looked like on Friday, a veritable gusher of exuberance recorded by the PHLX Housing Sector...
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Very Coy Rally Kisses Targets

March 17 2006
The spyders rallied to within 0.30 points of our hidden-pivot target at 131.77 yesterday – close enough to imply that a correction could be in the works, though not quite close enough for us to get short at the high. We attempted to do so by purchasing some April 131 puts for up to 1.35; however, they traded no lower than 1.50 intraday. Our 1321.75 projection for the Mini-S&P got even closer to...
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Dow Stealing Up On a Key Peak

March 16 2006
The Dow Industrials recorded their highest close in nearly five years, but you’ll have to pardon us if we don’t sound too excited about it, at least not yet. In fact, the blue chip average has gained less than five percent in the last two years in relation to the important peak...
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Exuberance!

March 15 2006
It took the S&Ps all of two days to chew through a thick wad of supply that we had talked about here on Monday. Now the June futures are practically guaranteed to reach a minimum 1321.75, equivalent to an approximately 100-point rally in the Dow Industrial Average. Since we treat all such crazed leaps as the potential last gasp of the now three-year-old Mother of All Bear Rallies, we’ll be...
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Gold Correction Is Petering Out

March 14 2006
Last weekend’s hidden-pivot seminar drew some goldbugs, and so we naturally lingered for a while on the chart below, which shows the Comex April contract. It is more bullish than I had originally realized, notwithstanding the fact that gold bulls have been getting hammered for the last five weeks. What led me to this conclusion? Well, in the first place, the bearish impulse legs have...
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Joblessness Now Permanently Low

March 13 2006
Navel-gazing pre-occ