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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...
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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
TYPE...
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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
TYPE...
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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-occupied Wall Street on Friday as investors lifted the Dow Industrials 75 points on word of stronger than “expected” payroll growth in February. Seemingly overlooked by the revelers was that unemployment also rose slightly, to 4.8 percent. This might seem like a curious discrepancy, but who’s quibbling? Everyone but CNBC’s anchors and a few over-the-hill pundits are in...
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Joblessness Now Permanently Low

March 13 2006
Navel-gazing pre-occupied Wall Street on Friday as investors lifted the Dow Industrials 75 points on word of stronger than “expected” payroll growth in February. Seemingly overlooked by the revelers was that unemployment also rose slightly, to 4.8 percent. This might seem like a curious discrepancy, but who’s quibbling? Everyone but CNBC’s anchors and a few over-the-hill pundits are in...
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Million Dollar Igloos Coming?

March 10 2006
The real estate boom that is just beginning to deflate in many regions of the U.S. seems to be picking up steam in, of all places, Alaska. We just heard from a friend of ours who in 1989 bought a stake in...
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Gold Gets No Respect

March 09 2006
A pen-pal of mine has seized on a source of frustration that continues to vex many of us. To wit, gold and bullion shares sell off savagely in a bull market while the broad stock market rarely fall for more than an hour or two in the midst of a secular bear. “I don’t think there’s any doubt that the market is ready to [collapse],” he writes. “The violence of the sell-off in gold shares indicates...
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Survival Guide For Put Buyers

March 08 2006
We billboarded a 49.08 target in Newmont yesterday because a fall to that number, precisely, looked like a lead-pipe cinch. Our strategy was therefore simple: Put up a 49.08 bid on the opening, then simply wait for NEM to come to Papa. And so it did, sort of. After a curmudgeonly feint higher in the early going, the stock reversed course and plummeted four percent to 49.20. Those of you with bids in...
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Buying Newmont, But Delicately...

March 07 2006
Newmont has been good to us in the past, so we’ve been on the lookout recently for a good spot to re-enter the stock. You may recall that we exited a small position in January near $60, reaping a trading gain of $3,620. Alas, with the stock down by nearly $10 a share since them, it is evidently still not a buy, not quite. As much was evident yesterday when we tried to catch the falling...
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Wall of Worry Theory 'Twaddle'

March 06 2006
Until the final hour or so on Friday the stock market seemed to be holding its own against an onslaught of negative news. Topping the list was a sales warning from Intel. The stock opened sharply lower on the news, but rallied back to fill the gap by day’s end. The broad averages followed suit but ultimately closed well off their highs because of the final-hour selloff. On balance,...
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Are T-Bonds About to Dive?

March 03 2006
Is the long bond about to break down? John B., a subscriber who has taken an active interest in hidden pivots, studied a weekly bond chart like the one below and that’s what he concluded. Take a look for yourself and see if you...
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Bullion Bargains Beat GOOG-Lust

March 02 2006
From a hidden-pivot standpoint, a relapse to exactly 345.35 seems as likely for Google as an early-March  snowstorm in North Dakota. Not that I would try to discourage anyone from thinking GOOG might at some...
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Clueless Wonk, Or Bad Actor?

March 01 2006
Yesterday’s comments in this space proved timely, since all the evidence that Helicopter Ben could need of an economic slowdown was there in spades: ebbing consumer confidence, a cooling housing market, punk GDP growth and a slowing in the manufacturing sector. The Wall Street Journal’s reaction quotes implied that investors were caught off guard by the...
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Pimco Betting Against Bernanke

February 28 2006
Add Pimco’s Steve Rodofsky to the list of institutional heavies who aren’t buying “Helicopter Ben” Bernanke’s rosy outlook for the economy. “We’re concerned about the lag effect of the tightening,” said Rodofsky, senior vice president of portfolio management in charge of U.S. Treasury trading at Pimco. “Our overwhelming concern – more than the introduction of the 30-year bond – is the outlook for...
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Stocks Bide Time in a Warp

February 27 2006
My comments for Monday will be brief, since I’ll be off to Denver shortly for Rick’s Picks’ first hidden-pivot seminar, at the JW Marriott in Cherry Creek. Ironically,...
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We're Short Agnico, IBM

February 24 2006
We picked up some put options in Agnico Eagle Mines and IBM, although an attempt to get short in D.R. Horton as well proved a tad too ambitious. The homebuilder’s shares opened at their best levels of the day, but that was still 62 cents shy of our short offer. Concerning Agnico, it is not often that I recommend shorting the shares of a mining stock, but it has had quite a run-up and was looking...
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Endless Distractions Of the Home Office

February 23 2006
Working at home has its advantages, not the least appealing of which is to be able to enjoy the local traffic reports for their entertainment value rather than as strategic intelligence. I often don’t get around to shaving until after my daily workout in the late afternoon, and blue jeans are about as...
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50-Year Mortgage Like...Paris Hilton

February 22 2006
Several items pertaining to the perennially sunny real estate market came across my desk yesterday, reminding me of why we should always take the stock market’s innate inability to sniff out...
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Seven Lean Years

February 21 2006
Like so many of you, I like to hold a few put options in inventory each month “just in case.” You never know. Suppose investors were to awaken one morning troubled by doubts about the health of the economy? I’m not suggesting that such a thing is likely to happen, mind you, only that we should take the odds if they’re juicy enough. Well, we’ve actually taken odds that were plenty juicy in each of...
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Economy Just Hunky-Dory

February 16 2006
In his first report to Congress, the new Fed chairman reassured listeners that the American economy was rebounding robustly after a statistical lull in the third quarter. Some astute Fed-watchers took this as a subtle warning to statisticians to produce “friendly” CPI numbers next month, so that the developing, rosy picture is more credibly corroborated by the numbers, most particularly those...
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Trading Gold On Autopilot

February 15 2006
Yesterday’s forecast for Comex Gold caught the low of a $13 rally to the exact tick, 537.80. Because this occurred after midnight in New York, I was somewhat surprised to hear from a couple of subscribers who nailed the trade, using a suggested 0.90-cent...
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Is Bank of Japan Pulling the Plug?

February 14 2006
By holding interest rates close to zero, Japan has been been the global carry-trade’s best friend, fostering liquidity worldwide for purposes, mainly, of promiscuous financial speculation. However, the Bank of...
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Why He's A Goldbug

February 13 2006
Worried that you’ll awaken one day to news that the dollars you’ve got in the bank have to be exchanged for “new” dollars? You’re not the only one. Subscriber Ben Woo allowed here yesterday that that was one of his worst fears, financially speaking. “It would be suicidal,” for the government, he wrote, and there would be “blood in the streets.” But...
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Gold's Next Challenge

February 10 2006
Gold has rebounded sharply in the last two days, recovering nearly two-thirds of Tuesday’s savage decline. Yesterday’s peak came within three ticks of a 570.70 hidden-pivot target I’d said would be reached if a lesser pivot at 565.90 was exceeded. And so it was. Despite this impressive show of strength, the burden of proof over the near-term will remain with the bulls, since the April contract must...
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Dollar's Fate In Deflation?

February 09 2006
I reprinted an essay here yesterday from Chris Laird that explained why the Fed would not be able to prevent deflation. One of the more interesting responses came from a reader,...
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Is Gold Correction Already Half Over?

February 08 2006
We were a step behind Newmont’s swan dive yesterday, bidding 1.35 for some June 50 puts that stayed well out of reach. They opened at 1.60 and traded as high as 2.15 intraday on relatively strong volume. The chart that I used to justify a change of heart concerning Newmont (and other mining stocks) is not subtle, as you can see. The divergence between rising price tops and a falling MACD shouts for...
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Pittsburgh's Other Team

February 07 2006
Even for us Steelers fans, the Big Game was a bit of a snooze. But who knows? May it’ll make Mark Cuban, the flamboyant owner of the Dallas Mavericks, a little more nostalgic for his home town. The effusive billionaire is a native Pittsburgher best known to basketball fans for his on-court antics and outbursts, a few of which have gotten him heavily fined. But hey, how often do you find a team owner...
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Playing Newmont By the Numbers

February 06 2006
We may get a chance on Monday to try out some of the theories espoused here the other day under the rubric “Buying Gold Without Pain.” We much prefer getting aboard when there’s weakness to exploit such as we saw on Friday. Newmont in particularly is a favorite because it is...
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Buying Gold Without Pain

February 03 2006
Some readers have asked why I haven’t had much to say lately about mining stocks and the precious metals complex. In a word: risk. Those of you with access to my inside pages will already know that we recently took profits on, among others, a $3,600 winner in...
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Getting to Know The Feb 42 Calls

February 02 2006
We’ve been noodling around in the QQQs in recent weeks for two reasons. The first is to make money at it; the second, to gain a better feel for the way the puts and calls behave in this very heavily traded vehicle. Our approach usually begins by plugging in some numbers on the Options Calculator, based on the underlying vehicle trading at a targeted swing point. Typically, we try to buy...
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GOOG Defies The Eggheads

February 01 2006
No doubt, the eggheads who espouse the efficient-market theory would say Google shares were priced “just about right” when regular-session trading ended on Tuesday afternoon. Do we then regard GOOG’s so-far 65-point drop in after-hours trading as just a fluke – the kind of...
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Politics, Trading Not a Good Mix

January 31 2006
In a little more than 24 hours, January will have passed without a word from these quarters concerning Sen. Ted Kennedy. Hardly a day goes by when I don’t receive some droll reflection on Massachusetts’ senior senator – aka, the last...
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Bernanke Planning A Nasty Surprise?

January 30 2006
A while back, we went toe-to-toe here with Jim Otis on the topic of deflation. Jim holds forth at the Optimist, a Web site that, as the name implies, tries to see the sunny side of things. But we think it’s a bit of a stretch to find...
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Cheapie Puts, Calls The Only Way to Go

January 27 2006
A short squeeze in the final hour of Wednesday’s session telegraphed yesterday morning’s bolt from the gate, leaving us with little to do but pick our teeth. We had a 0.15 bid in for some Citigroup Feb 47.50 calls (CBW) on the opening, but it proved too stingy. Because these...
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Back to Normal, Stocks Vegetate

January 26 2006
Last Friday’s promising heart attack on Wall Street has given way to a quasi-vegetative state that holds no particular opportunities for either bulls or bears. What to do? We’ll sit on the cost-free put spread that we legged on in the QQQs, but my hunch is that we may be glad we bought some cheapie call options on the side. That’s...
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Kiss Pixar Good-Bye?

January 25 2006
Given the $7.4 billion price tag, it’s hard to blame Steve Jobs for selling out to Disney even if it means that his Pixar Animation Studios, one of the most successful companies in the history of show business, is about to be turned...
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No Bergdorf's In Dearborn

January 24 2006
Stocks rallied for all the wrong reasons yesterday, including an announcement from Ford that it will shut 14 plants and cut 34,000 North American jobs over the next six years. GM appeared to have benefited as well from investors’ loopy notions about the tonic effects of creative destruction. “Getting small” used to be the running gag of comedian Steve Martin, but now it evidently has become the...
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Bulls Turn Tail As Woes Mount

January 23 2006
Friday’s punitive stock-market decline wiped out the New Year’s rally and then some, challenging the arrant complacency that has ruled Wall Street of late with a steady drumbeat of unsettling news. Much of it emanated from Iran, which...
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Readers Skeptical Of Deflation Thesis

January 20 2006
We resume our discussion of deflation today with some interesting letters from readers. If you’d like to respond, please cite the specific passage and the author. First up is Marv Anderson, who says that the question of whether...
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Readers Weigh In On Deflation Debate

January 19 2006
Recent give-and-take here on the subject of deflation, including a would-be debate with uber-inflationist Gary North, generated quite a bit of reader mail. To stimulate, provoke and enlighten you, I will be presenting some of the more...
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Too Much Liquidity For Stocks to Crash?

January 18 2006
Yahoo and Intel were getting shaken down in after-hours trading on Tuesday, presumably by the kind of arse bandits who would be out stealing little old ladies’ handbags if trading stocks were not so lucrative. Intel’s earnings came in a whopping three cents below expectations and Yahoo’s numbers were actually pretty good, so we should hardly have been surprised to see widows, orphans and pensioners...
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The Firebugs

January 16 2006
Now those crazy Iranians supposedly are feeding uranium hexafluoride into a centrifuge enrichment cascade, a key step toward producing a nuclear bomb. The good news is that, unlike the Iraqis, they are making it extremely difficult for the civilized world to ignore their nakedly hostile intentions. The prospect of having to face down a nuclear threat from these lunatics puts one in mind of...
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How Would Dollar Act in a Deflation?

January 13 2006
My remarks yesterday concerning deflation elicited some insightful responses from readers. I’d planned to publish the best letters without comment, but the one below, from Greg Payne, is sufficiently provocative to warrant special handling. My reply follows, along with some further comments from the redoubtable Bob Hoye of...
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Inflationist North Dodges a Debate

January 12 2006
  Eager to alert readers to the imminent danger of deflation, I tried unsuccessfully to draw...
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Bull Moose On the Loose

January 11 2006
I spent Tuesday nursing the flu, tuned to Samuel Alito’s confirmation hearing on C-Span. The tone of the proceedings was surprisingly civil, perhaps because going on the attack against the mild-mannered judge would have been like trying to savage Mr. Peepers. Things are bound...
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A Turner Tribute To Leaden Acting

January 10 2006
Can you guess what the following films have in common: Woman of the Year (1942), Race Street (1948), The Time of Your Life (1948), The Big Steal (1950), Gambling House (1951), Blackbeard the Pirate (1952),...
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Googling Disaster

January 09 2006
We know, as clearly as it is possible to know such things, that the stock market is now in the hands of the lunatics. As much was evident Friday in the price action of Google, which at one time was up nearly 20 points on the day. I hesitate to tell you that this was the blowoff we’ve all been expecting, since one can never predict what manner of stupidity, insanity and piggish greed will hold sway...
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More Reasons To Get Short

January 06 2006
We were in there bidding yesterday for more QQQ puts, but even with the underlying index acting more buoyant than the broad averages, the options stayed just out of reach. This is encouraging, since, as in other areas of life, we shouldn’t be too eager to possess things that come too easily. We’ll be bidding once again for put options this morning, although not necessarily as generously. If shares...
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Dimmest Memories Of Jack Abramoff

January 05 2006
The seashore town of Margate, New Jersey, where I grew up in the 1950s, didn’t produce many big-time celebrities. There were no professional baseball players, no Wimbledon aces, no famous...
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Fed Does Its Bit To Fuel a Hoax

January 04 2006
Who needs a Plunge Protection Team when the Federal Reserve stands ready to ignite Wall Street’s New Year with a rip-roaring bonfire?  Never mind that the fuel for yesterday’s short-squeeze was a low-octane pile of manure, containing as it did little more than coy hints from the Fed’s December minutes that the central bank might stop tightening sooner...
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Got That Sand In My Shoes

January 03 2006
Warm greetings to you all in the New Year. I spent the holiday with friends in Colorado ski country, but as the photos below will attest, I’ve still got some sand in my shoes. The pictures were taken recently by two childhood buddies. One sails...
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Yield-Curve Jitters?

December 29 2005
Based on what we saw yesterday, the stock market is likely to spend the last two sessions of 2005 wafting gently higher. Unlike a day earlier, when the Bulls of Bozo-dom drove stocks up sharpl on the opening, only to be rebuked by sellers thereafter, Wednesday’s tepid, see-saw action was unlikely to have produced many big winners or losers. Still, three important stocks that we track and trade were...
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Gotta Love Those Bozos!

December 28 2005
How can we prepare for a stock-market crash in 2006 without risking our shirts if we’re wrong? We spent Tuesday morning doing exactly that – lining up our ducks for the Big One that for all we know could still lie ten years down the road. The opportunity we were looking for beckoned in the first hour with the subtlety of a string of exploding firecrackers. Bulls, hopped up on whatever it was that...
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More Thoughts On Deflation

December 27 2005
Recently, I responded here to an essay by Reality Check’s Gary North that asserted deflation was all but impossible. I have long maintained the opposite – that a ruinous deflation is not merely possible, but inevitable. My comments...
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Risking $240 To Make $3,200

December 23 2005
Ever hopeful that the market will effect the “healthy correction” that permabears have been expecting for, um, years, we acquired a small inventory of QQQ put options yesterday, paying a measly 0.15 apiece for sixteen January 40