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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 puts. Our risk is $240, but the position has the potential to reward us with profits more than ten times that if the underlying index falls just five percent in the next...
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A Deflationist Goes for the Kill

December 22 2005
In the debate over whether inflation or deflation will eventually wreck the global economy, I’m always eager to take on a heavyweight. Gary North, for one. Let me say first that I have tremendous respect for the man, a writer with the kind of talent that other writers, including me, can only envy. North’s...
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Wild Grace

December 21 2005
It’s 2 a.m. in the East, far later than I’d expected to resume working on Wednesday’s edition, so I’m going to hold the inflation-vs.-deflation commentary that I’d promised for another day.  In its place, here’s one of the more interesting e-mail items that I received yesterday, an interview with photographer-cum-Renaissance man Eric Alan to nourish the...
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Bear Blues

December 20 2005
The VIX is once again plumbing ten-year lows, providing a graphic picture of year-end inertia that rivals a lug nut in its undecipherable muteness. In only two instances during the last decade, in 1999 and 2003, did the early days of the New Year find investors and traders the least bit excitable. Will 2006 begin with a bang or an implosion? As always, the answer is: maybe. Many top-flight...
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Dollar's Weakness Just a Correction

December 19 2005
The U.S. dollar has been trending lower for the past month, but speculation in some quarters that the bear market begun in July of 2001 has returned is not only premature but unwarranted. To the contrary, there is strong technical evidence that the dollar will soon be moving higher, reviving the baby bull that began early this year. To be sure, it is still just a baby, one that would need climb more...
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Street Hoping For the Worst

December 15 2005
With shares of Altria up by nearly four percent yesterday on favorable tobacco-suit news, the Dow Industrials still managed to close down on the day. Go figure. Sage observers attributed the market’s skittishness to investors’ concern that a supposedly robust economy might kick inflation into a higher gear. Indeed, capacity utilization in November rose above 80 percent for the first time since...
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'Junk' Silver's Role in a Crisis

December 15 2005
The fruits of yesterday’s regular Q&A session should keep paid subscribers busy for a while, since 12 of the 18 queries that I fielded contain actionable advice. There are specific buy-side recommendations for silver, gold, Swiss franc, Sirius Satellite Radio, Whole Foods, InPhonic, Yamana Gold and Citigroup, so make some...
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Fed-Mania At Its Silliest

December 14 2005
Fed-watchers reached a new low for self-absorbed silliness yesterday trying to divine whether the central bank intends to stop tightening any time soon. News that the Fed had raised interest rates for the 13th consecutive time surprised no one, of course. The federal-funds rate was pushed up to 4.25%, just as everyone had expected. But even if there was nothing alarming in this, that...
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Heating Bill A Real Shocker

December 13 2005
My latest heating bill didn’t include the recent cold snap here in Colorado, but even without it, the bill was 50% higher than any I’ve ever paid before. So much for the hundred bucks a month I was just starting to save on my monthly phone bill by...
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The $250M Hiccup

December 12 2005
If you’ve ever looked at the keyboard of a cash register at McDonald’s, you know that it has been designed to be idiot-proof, as unchallenging to a cashier’s mental abilities as counting one’s toes. In fact, the entire fulfillment chain at Mickey D’s, from order-taking, to french-frying, to mustard-dabbing  and napkin-dispensing, has been so well thought...
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A True Believer Champions Gold

December 09 2005
I have quite a few pen-pals who are ardent goldbugs – true believers who disdain the more subtle arguments that occasionally play out in this forum. Chuck Cohen is one such fanatic, an erstwhile Rick’s Picks lurker whose unqualified, well-reasoned enthusiasm for precious metals and mining shares sometimes makes me feel ashamed to have entertained even mild...
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Trojan Horse At GM's Door

December 08 2005
What the heck could GM investors be thinking? A surge in the stock late yesterday cut the DJIA’s losses nearly in half, but you’d have to be a cynic to believe the celebration was warranted. The news that caused GM shares to rise 2.9 percent in mere minutes concerned the growing likelihood that Kirk Kerkorian, a 9.9% stakeholder, will get a seat on GM’s board. Kerkorian’s hatchet-man, Jerome York,...
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Under Pressure, Dow Slogs Higher

December 07 2005
The DJIA remains locked on 11000, and if it should fail to push above that number by year’s end – well, there’s no point even thinking about it, since the odds of failure are by now so remote that only a collision between Earth and a huge asteroid could conceivably deter investors from doing the requisite lifting between now and New Year’s Eve. For sure, they did their bit yesterday, keeping the Dow...
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Is OPEC Tiptoeing Into Gold Bullion?

December 06 2005
Comex gold has been making short work of my hidden pivots, and not just the little ones either. There was an important hidden resistance at $500.00 that “should have” slowed the rally down; instead, it exhibited about as much stopping power as the Orleans...
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Market on Cruise Till Bonus Time

December 05 2005
I’ve reproduced hourly charts below of the mini-contracts that we trade more or less regularly. A pessimist would probably notice first that the most important indexes – i.e., the Dow Industrials (YM) and the S&P 500 (ES) -- are lagging behind the Russell 2000 (ER) and the Naz. But you could spin it another way, too – that if GM and Honeywell had not been dragging the blue chip average down on...
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Puts Are Cheaper Than Bass-Fishing

December 02 2005
A Dow thrust above 11000 seems like a foregone conclusion, but even so, it’ll be tempting to try and impede it with some shorts if and when the big day arrives. We’ve taken a cautious approach so far whenever bucking the bullish tide, buying a few puts here, a few puts there, as certain favored trading vehicles approached promising hidden-pivot targets. Looking back at the stock market over the last...
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Deranged Bull About to Cool?

December 01 2005
I don’t usually pay much heed to conventional trendlines, since they are too well watched to be trader-friendly, but the one governing the S&P 500 Index shown below is pretty compelling. It connects five tops going back nearly two years, including one made just two days ago at 1270.64. Was there by any chance a hidden pivot close by? Turns out there was – at 1275.07. The nearly five-point...
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Cliff Looms For $ Bears

November 30 2005
With gold hovering near $500 an ounce, the barbaric relic is finally getting some attention -- from the Wall Street Journal, for one, in the form of a bylined article, “Gold Flirts With $500,” that hit the Dow Jones newswire on Tuesday afternoon. Be patient, dear gold bugs, since it could be another year or two before the likes of Newmont and Barrick make the cover of...
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First-Hand Memories Of Economic Turmoil

November 29 2005
I spent many hours over Thanksgiving weekend responding to a huge backlog of e-mail messages, many of which concerned our favorite topic, deflation. Below are a few such letters that I thought you might find interesting. I will publish the remaining letters tomorrow (Wednesday). First up is Kahlif David, responding to my theory that someday we could...
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Dot-Com Mania's Final Hurrah?

November 28 2005
Google blew past my hidden-pivot target at 418.58, implying the stock will reach a minimum 439.05 before it can peak. We had an order in to buy some December 400 puts, but only at bargain prices. In fact, we bought none, since put options in Google picked up volatility as the stock moved higher on Wednesday. This suggests that the market makers are not exactly wild about shorting GOOG puts as...
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Dot-Com Mania's Final Hurrah?

November 25 2005
Google blew past my hidden-pivot target at 418.58, implying the stock will reach a minimum 439.05 before it can peak. We had an order in to buy some December 400 puts, but only at bargain prices. In fact, we bought none, since put options in Google picked up volatility as the stock moved higher on Wednesday. This suggests that the market makers are not exactly wild about shorting GOOG puts as...
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The Easiest Way To Short Google

November 23 2005
Google, up 9 points on Monday, is within striking distance of a potentially important hidden-pivot target at 418.58. The stock shredded its way higher after faking out bulls with a gap-down opening. It took about 20 minutes for this hoax to play out, coaxing shares from panicky sellers two points below the previous day’s close before trampolining into the wild blue yonder. There...
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The Easiest Way To Short Google

November 22 2005
Google, up 9 points in the last six hours, is within striking distance of a potentially important hidden-pivot target at 418.58. The stock shredded its way higher yesterday after faking out bulls with a gap-down opening. It took about 20 minutes for this hoax to play out, coaxing shares from panicky sellers two points below the previous day’s close before trampolining into the wild blue yonder....
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The Market That Would Not Tank

November 21 2005
The Market That Would Not Tank turned a promising dive into a swoon Friday, but not before letting us get short on the high tick of the day. We had an offer in to sell two E-Mini S&P contracts short at 1252.25, precisely where the index peaked early in the session. We covered half the position six...
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An Old-School Newsman Dies

November 18 2005
I just received word of the death of my old boss, Charles C. “Chuck” Reynolds, former editor-in-chief of The Atlantic City Press. Chuck hired me in 1971, a week after I graduated from college, and I spent the next seven years learning the craft of journalism before migrating to the trading pits of the PSE. This was before Woodward and Bernstein,...
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Titillating Times

November 17 2005
Danger, or opportunity? The S&P chart below titillates us with plenty both. We see a rally that has spent the last month in coil-and-lunge mode, fitfully making its way toward the year’s earlier peaks. Having surpassed one of them already – the 1233 high...
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Sleepwalking

November 16 2005
Yesterday’s forecast nailed the exact low in the Yen – 0.8411, basis December – offering us an exhilarating ride and a profitable (i.e., $475 per contract) exit shortly thereafter. The intraday high was 0.8458, but I can’t predict whether there is significantly more upside to come. If so, corresponding weakness in the dollar could be expected to lend buoyancy to gold quotes, which so far have...
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Now It's Black Helicopter Ben

November 15 2005
Now Helicopter Ben’s been spotted at the controls of a black helicopter. Conspiracy theories abound concerning the Fed’s recent decision to stop publishing M3 data. Some fear this will give Alan Greenspan’s successor more room to manipulate monetary policy surreptitiously. There’s a more plausible explanation, though – one that is about as intriguing as the Boy Scout Handbook. Very simply, M3 growth...
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Petites Tetons Loom for Bulls

November 14 2005
Stock averages wafted into the rafters Friday, setting the stage for an attempt over the next week or two to lift the roof on this year’s constipated range. For the S&P 500 Index, that would require a move above the 1245.86 high recorded in early August. That’s almost exactly 4% above current levels, and one could expect the financial press to rain fireworks and confetti on Wall Street if and...
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Doing the 'Fly

November 11 2005
That was quite a turnaround yesterday, eh? Google, for one, ripped for a $14 gain following a weak opening, finally closing within 25 cents of the intraday high. We’d hoped to get aboard at a swing low, but had expected it to take a few more days for the stock to find traction. In fact, the entire, savage correction lasted all of two days, terminating abruptly in the opening minutes of Thursday’s...
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Why $509.25 Is Crucial for Gold

November 10 2005
We’ve had excellent success recently using hidden pivots to predict important swing points for gold, which is now inches from a bullish breakout. Recall that on October 12, the Comex December contract peaked at 483.10, a single tick above the $483.00 target that had been projected here several weeks earlier near $467. The subsequent decline from $483.10 was nasty, hitting a low of $456.10 on...
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Surrender Monkeys Keep Their Cool

November 09 2005
Say one thing for those cheese-eating surrender monkeys, they can keep their cool. Take a look at the chart of the CAC 40 Index below. With blood flowing in the streets and flames devouring police cars and public buildings by the score, lapping at the gargoyles, French stocks have rallied almost as though nurtured by the riots. In the past, we’ve seen the Dow Industrials and...
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What If Google Bought Microsoft?

November 08 2005
Google is closing fast on a $407 target (or $418 if any higher) we’ve had in our sights for a while. The stock is not so much a proxy for the market as a nose cone, but we follow it closely nonetheless because of its power to inspire the downtrodden investor. Not long ago, when GOOG shares were trading around $335, I was feeling inspired myself – to short the stock, as some of you may recall. Of...
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Dollar Bulls Rare as Dodo

November 07 2005
The “strong-dollar guy.” That’s not how I want to be remembered, although it surely couldn’t hurt if my loyal subscribers would talk up this point to friends and acquaintances who might be shopping for a guru with a very different slant on the economy. Regarding the curiously strong dollar, I like...
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Bulls Munch Into Supply

November 04 2005
Yesterday’s strength in the indexes had been telegraphed a day earlier, when the S&P futures pushed above a hidden-pivot resistance I’d flagged at 1215.00. This allowed us to jump aboard overnight, using another “invisible” trigger point at 1218.25. Ordinarily we try to initiate trades at swing points where intraday trends begin. However, the market has been too coy lately to make this an...
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Mining Sector's Dirty Dozen?

November 03 2005
Of the many questions that I fielded during yesterday’s real-time Q&A session, no fewer than seven concerned gold stocks. Clearly, interest in the miners is on the rebound among Rick’s Picks subscribers. Not coincidentally, we’ve been in there bidding for a piece of the action the last two days. So far,...
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Gold Looks Right For Bottom-Fishing

November 02 2005
Gold is starting to look attractive again. We’ve been waiting for a buying opportunity since mid-October. That’s when the Comex December contract touched 483.10, a single tick above an important hidden-pivot target at 483.00 that I’d flagged several weeks earlier. Here’s what I wrote at the time, on September 28: Upside...
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Time Running Out For Seasonal Bears

November 01 2005
As trick-or-treaters make their annual rounds Monday night, we should be reminded that bulls will have seasonality on their side into year’s end. As some old-timers may recall, Christmas shopping used to commence officially the day after Thanksgiving,. These days, though, retailers at the local mall will be revved up to the redline by the time Turkey Day rolls around. The stock market may be off to...
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9 Tons of Gold In His Mattress

October 31 2005
Interesting times continue to drive the market every which way but loose. Rallies go to resistance, declines to support -- more feverishly so in recent weeks, seemingly, than many of us can recall. One of these days a trend is going to exceed our tired expectations, then reverse with a unanimous consensus leaning the wrong way. Friday’s little frisson was...
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Gold and Deflation: Readers Weigh In

October 28 2005
Deflation has never occurred on a global scale, nor in a financial environment such as currently exists – one in which fundamentally worthless currencies serve not only as legal tender, but as the world’s chief store of value. Under the circumstances, the prospect of deflation raises some tricky questions for gold bugs, most of whom were attracted to bullion because of their deep distrust of paper...
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Do We Grow Fat Just to Be Eaten?

October 27 2005
With “Helicopter Ben” Bernanke slated to take charge of the Fed next year, I raised the question here yesterday of who’s interests he will serve. Those of big business? Of the U.S. Government? The Federal Resereve’s member...
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Bernanke Faces Trial by Ordeal

October 26 2005
If the appointment of “Helicopter Ben” Bernanke as Fed chairman portends a major change in monetary policy, it will most likely come in the form of a shift from fighting INflation to guarding against DEflation. Recall that Bernanke burst onto the financial scene two years ago with a provocative speech to the National Economist Club that made clear the central bank’s resolve to fight deflation by any...
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Bottom-Fishing In December Oil

October 25 2005
December Crude fell yesterday to a hidden-pivot target at 59.43 first broached here two weeks ago, allowing us to get long with the very tight (i.e., 59.18) stop-loss that had been suggested. The actual low was 59.31, but it’s too early to tell whether it will mark a major turning point. I had raised that possibility last week in response to apparent consensus expectations that oil prices have...
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Living to 100

October 24 2005
I had planned to continue our dialogue today concerning deflation, but the mood eludes me at the moment. The weekend was a joyous one for my family, which had gathered here in Boulder for the bar mitzvah of my son,...
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Readers Braced For Tough Times

October 21 2005
Last week’s dialogue concerning deflation and the impending hard times produced quite a pile of interesting mail. The discussion resumes today with several more fascinating letters from...
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Falling Oil Prices Spur Stock Bulls

October 20 2005
Wall Street shrugged off losses at GM, Honeywell and Intel to focus on the good news -- a $1.00 drop in the price of crude. The Dow Industrials were up nearly 129 points at the close, having rallied from a moderate deficit in the opening hour. If the ratio between blue chip stocks and oil quotes holds, a decline in spot crude to $51 might be expected to propel the Dow to new all-time highs. Of...
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Iraqi Vote Offers A Taste of Chicago

October 19 2005
It’s starting to sound like the constitutional referendum in Iraq last weekend was run by a bunch of Chicago ward-heelers rather than by a fledgling committee of Muslim and Kurdish locals. In some...
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Nascent Bull, Or Bear Ruse?

October 18 2005
Hard to know why stocks were so feisty yesterday. Perhaps it was the world-shaking news from the Hollywood – that a new actor has been chosen to play James Bond (a blond (!!!), the “news” media breathlessly informed us), and that Stallone is gearing up for...
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Hey, You Lurkers: See for Yourselves

October 17 2005
A while back, I promised you that I would never become a cheerleader for gold – that  I would simply call ‘em as I see ‘em. The ranks of guru-dom are already far too crowded with hucksters who never stop blathering about a supposedly imminent bullion moon-shot to $1,000-plus an ounce. These are the same guys who tell us, every time the price of gold...
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Why Monetization Is Not the Answer

October 15 2005
I’ve covered the markets and specific securities on the paid-subscriber pages, providing some key supports for crude oil as well as guidance for the short positions we hold in Citi and the Diamonds. In today’s commentary, I’d like to continue our dialogue on deflation by responding to some of your letters. The first is from...
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Why Monetization Is Not the Answer

October 13 2005
I’ve covered the markets and specific securities on the paid-subscriber pages, providing some key supports for crude oil as well as guidance for the short positions we hold in Citi and the Diamonds. In today’s commentary, I’d like to continue our dialogue on deflation by responding to some of your letters. The first is from...
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Whiskey, or Gold?

October 12 2005
Judging from the mail I’ve received recently, some of you are not taking my deflation warning lightly. Of course, to mainstream commentators, we’re just lunatics. But let me say it again: Deflation is unavoidable. And hey, don’t shoot me, I’m only the messenger. I’ll be publishing your letters on this topic over the next few days, and there are some...
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High Fuel Costs Painless for Citi

October 11 2005
The Citi puts we hold will give us some positive exposure if stocks take a dive between now and December. Anything below $40 a share would be worth $1,800 a point to us, so we’ve got pretty decent leverage. And it doesn’t hurt that earlier profit-taking has reduced our cost basis on these puts to just 27 cents apiece. ...
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Deflation's Revenge On Illusory Wealth

October 10 2005
Deflation is the unknown that scares gold bugs the most. The typical hoarder of gold is contemptuous of paper assets in general and of fiat currency in particular. He is hostile toward the very idea of central banking, convinced that the bankers, by pushing easy credit, have brought the global financial system to the brink of collapse. And he believes, most fervently of all, that only a hoard of...
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If System Collapses, Who'll Bid Up Gold?

October 07 2005
I’ve been a dollar bull for quite some time, a position that puts me sharply at odds with the likes of Buffett and Soros.  Of course, anyone who owes lots of dollars – mortgagors, to name just one class of debtors – should be rooting for these guys, since a dollar cheapened by inflation would effectively reduce the burden of debt for all of us. And extreme...
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Fannie's Weight Could Sink Stocks

October 06 2005
With Citi evidently in the grip of lunatics – the stock was down a whopping seven cents yesterday, even as most other banking shares got savaged – we’ll shift our attention to Fannie Mae, a bellwether whose price action is perhaps more in tune with reality. Fannie’s dead-cat bounce looks to have run its course, and the stock should now be presumed bound for a hidden-pivot support at 37.60 that I...
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Winter Shortfall: $5,500 Per Home

October 04 2005
The blow to our consumer economy is already being felt at the retail level, as I implied here yesterday. How much worse might things get? My friend Doug at Merrill Lynch calculates that, compared to last winter, the average household will face an increase in non-discretionary spending of at least $700 per month, or $3,500 for the five-month...
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Economic Plunge Is in the Pipeline

October 03 2005
Friday’s S&P range was the sixth lowest in the last two years, in case you’re keeping track. Of course, it must have seemed even duller to market watchers who have been patiently awaiting an October crash. And not without good reason. Stocks may have shrugged off Katrina and Rita, and even the prospect of Fannie Mae’s directors being hauled into court, but there are a few wall-of-worry items...
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Fannie's Swoon Barely Registers

September 30 2005
Far shrewder observers than I are already characterizing the developing Fannie Mae saga as Enron/Worldcom writ large. “The biggest Ponzi scheme in world financial history” is how one regular in a chat room I frequent -- a money manager who oversees mega-billions -- sees it. For starters, think of all the little people who for decades have been buying Fannie...
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Should We Heed Hindenburg Alert?

September 29 2005
The market continued to inhale and exhale yesterday. Pondering the alternatives, perhaps we should be thankful. From a hidden-pivot standpoint it was a case of rallies falling short of their modest targets and declines doing more or less the same. I had some bids in below the market in several of the mini-indexes, but sellers lacked whatever conviction it might have taken to get them filled....
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Lake-Surfing

September 26 2005
I’d suggested keeping your Bulletin Launchers open Friday in case an opportunity popped up, but we certainly didn’t get much to work with. The day’s highlight was a soporific ride aboard the Mini-S&P in the early afternoon. The rally allowed us to exit on a trailing stop 20 minutes later with a 2.25-point gain, or about $100 after commissions. Lunch money if you live in...
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Ebullience? Or Just A Routine Bounce...

September 23 2005
Buyers tipped their hand early yesterday when homebuilders and bank stocks refused to fall on an otherwise weak opening. In fact, two of our faves, Beazer and D.R. Horton, were actually showing gains with the Dow Industrials off nearly 30 points in the early going. We’ve always paid close attention to Citi in particular, since, as far as I’m, concerned, it’s a perfect proxy for a...
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Signposts

September 22 2005
December Gold spiked to 476.20 yesterday, just a hair shy of the 476.50 hidden pivot we’ve been using as a minimum rally target. Once above the pivot the futures would become be an odds-on bet to reach the next at 483.00, an impediment that looks sufficiently daunting to warrant shorting, albeit with a very tight stop-loss. Assuming a tradable pullback occurs from that number, we would expect the...
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As Citi Goes...

September 21 2005
Citigroup may be the perfect proxy for an economy that has been running on smoke and mirrors, and it therefore behooves us to pay close attention when the stock reverses sharply, as it did yesterday -- especially when the reversal comes precisely at a hidden pivot, as indeed it did. Citi shares have been in a short-squeeze since late August, with only a couple of minor corrections along the way. The...
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Key Numbers For Gold Bugs

September 20 2005
Gold peaked early in yesterday’s session, but not before making a 17-year high that will have very bullish implications going forward. The actual top occurred at 472.40, less than a dollar from the hidden-pivot resistance at 473.20 that I’d identified a while back as a minimum rally target. The pivot could still show a little stopping power later this week, but judging from the way the futures...
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Market Climbs Wall of Hubris

September 19 2005
This market creeps me out, really. It’s one thing for stocks to climb a wall of worry, but quite another for them to dance a jig every time the major averages advance a foot or two on some fresh shard of appalling news from Iraq or New Orleans. Bad news is good news these days, in case you hadn’t noticed, and as far as Wall Street is concerned, the disaster in...
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Time to Short Google Shares?

September 16 2005
Is it time to short Google? This is a question that pops up frequently in my mail, and although the short-term answer may be “yes,” the longer-term outlook should temper our enthusiasm for betting against the Web’s reigning searchmeister.  The company is pursuing a course that will put it increasingly in competition with Microsoft, and although it could...
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Trashed Pivots Spell Trouble

September 15 2005
I don’t like the way the averages trashed a couple of  hidden pivots supports yesterday, not at all, and I said so in an intraday bulletin. We had bids in below the market in two trading vehicles, the Mini-Russell and the Mini-Dow. The latter fell to 10630 in the first two hours of the session, just a single tick above the 10631 hidden-pivot target I’d...
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Turn On, Tune In...

September 14 2005
Although Rick’s Picks  is not explicitly geared to day trading, I’ll occasionally send out updates and recommendations in...
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Timing Trades So They Work

September 13 2005
We offered the E-Mini Nasdaq short at 1615.00 yesterday, and although that hidden pivot offered daunting resistance throughout the day, we ended the session with no position. A case of cold feet? Definitely not. I’m as eager to short the market at these levels as you are, but only if we are able to initiate a position on our terms. On Monday, I’d specified that the short offer be left in until 10:30...
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Living in These Interesting Times

September 12 2005
Interesting times beget interesting e-mail, of course, and last week’s torrent of messages and attachments commenting on these all-too-interesting times could take me a month of Sundays to get through. I can only hope that next week is wholly uninteresting, eerie is that might seem, lest I get even further behind in my reading. A week of profound eventlessness wouldn’t be so bad for humanity,...
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'OPM' Breeds Complacency

September 09 2005
My comments will be brief today, since I’ll be on my way shortly to Denver for a talk on Hidden Pivots before the Denver Trading Group. The major indexes stalled once again at the modest rally targets I’d flagged for Wednesday. As a result, the short offers...
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Obsessing Over Puts

September 08 2005
We had some short offers in somewhat above the market yesterday, but the intraday rallies were too feeble to reach even these modest targets. Nor did it prove particularly helpful to have gotten the targets precisely right, as the nearly untradeable price action in the mini-S&P demonstrated. After the futures exceeded the previous day’s target, 1232.50, by a single tick, we shifted our...
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Buggering The Consensus

September 07 2005
The stock market continues to act as though the U.S. economy will finesse the awesome destruction caused by Katrina as easily as it might a month-long drought in the Corn Belt. Bulls evidently are confident the hurricane will have earned...
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It's Different This Time...

September 06 2005
How will New Orleans and the Gulf states ever clean up the mess and rebuild, especially if the hurricane season throws yet another nasty punch as has been predicted? My...
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Why the Dollar Will Strengthen

September 02 2005
Gold surged $9 on Thursday, with the dollar weakening on doubts about how well the U.S. will cope with soaring energy prices. Perhaps the newly emboldened dollar bears should be asking themselves what will happen if the...
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Bulls Unfazed By $4 Gas

September 01 2005
Investors evidently found a firm new toehold in the wall of worry yesterday, this time in the form of a prediction by the Oil Price Information Service that gas is likely to hit $4.00 a gallon before long. How crazed did buyers become over this prospect? Well, check out the chart below, which I’ve left unlabeled. Which stocks do you guess would be the very last to rally under the circumstances? If...
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Is Cluelessness About to Romp?

August 31 2005
We bought some more cheapie puts in Citi yesterday off a stingy bid that was filled when the stock grew frisky around mid-day. Inspired by a promotional message that I received recently from a brassy competitor, it would be tempting for me to tout annualized gains so far of 9000%, since the puts closed 0.10 above our 0.45 purchase price. But you know better – know that, in fact, the gain when...
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Markets Just Shrug It Off

August 30 2005
Mr. Greenspan’s recent, characteristically understated warning about a softening in home prices should have been enough to set stocks tumbling on Monday; instead, they climbed. That’s what happens, apparently, when you give investors a couple of days to mull over bad news while the markets are closed. With Katrina savaging the Gulf, shutting down drilling rigs and threatening to destroy...
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Last Chance To Buy Puts?

August 29 2005
The stock market continues to look like it’s prepping for a meltdown, but if Friday’s tired action is any indication, we may get a chance to buy some puts next week before the plunge begins. To be sure, trading volume has started to dry up in advance of Labor Day weekend, and this can sometimes cause price volatility to expand due to the absence of liquidity. This time around, though, because of the...
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Dulling Down Gold Fever...

August 26 2005
In early March, with gold futures trading $10 lower, I pledged that I would never become a shill for gold, nor would I send out any bulletins exhorting you to beg, borrow or steal every dollar within reach to plow into bullion. I believe I’ve kept my promise to avoid sensationalizing the case for gold, even if this has made Rick’s Picks a duller read for...
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Hidden Pivots Hold, But for How Long?

August 25 2005
We had bids in below the market yesterday for the QQQs, Diamonds, the mini-Dow and the mini-S&P, and even though each fell very precisely to the low I’d projected**, we still managed to come away empty-handed. That’s because the respective bottoms were not reached until the final minutes of the day, hours after my time limits on our bids had expired. Stocks had moved earnestly higher in the...
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Good Reasons To Be Bearish

August 24 2005
The chart below suggests that although we missed a great opportunity to short the Diamonds a couple of weeks ago, we’re likely to get another chance, and probably soon. Note that the most recent rally produced a price peak of 107.33 on August 10. That high came within just 0.05 points of an important hidden pivot at 107.38, strongly implying that the three-month bull cycle that produced it is...
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All Is Sunshine And Lollipops...

August 23 2005
The small put position that we held to expiration died ingloriously last week during my brief absence, as stocks continued to skate blithely on a narrow plank of less-than-horrendous news. The bulls, putting their always-sunny spin on world events, seemed oblivious to the glowering menace of $3 gas, the latest triumph of jihad in...
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Bulls' Best Hope Is for Oil to Peak

August 11 2005
I’ll be away from the office for the next ten days, so Thursday’s forecasts and recommendations will be the last until my return on Monday morning, August 22.  For what it’s worth, I should mention that the stock market has taken wicked dives in my absence more often than would seem probable. Coincidentally, however, a stockbroker friend who has...
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Lurker Says I'm Blowing Smoke

August 10 2005
Lurker Mike Ecklberg has let fly with some criticism of Rick’s Picks that warrants a firm response. He writes as...
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Will $65.02 Pivot Stop Oil's Surge?

August 09 2005
Crude oil quotes are approaching a potentially important top, although it’s too early to say whether this will keep pump prices from hitting $3.00 by autumn. Focusing on the September contract, we’ve been awaiting a short-able peak at exactly $65.02, a little more than a dollar above yesterday’s record-high $63.99. Some...
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Have a Jones For Buying Puts?

August 08 2005
A glum day on Wall Street, for sure, though not necessarily for Rick’s Picks subscribers. We went bottom-fishing against the trend in the mini-Dow futures, catching what turned out to be the...
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Stocks Look Primed to Fall

August 05 2005
For nearly two weeks, we’ve been expecting the S&P futures to spear a hidden-pivot resistance at 1249.75, clearing the way for a quick follow-through to at least 1272.75. However, it’s beginning to look as though they might not be up to the task. Yesterday’s stall at 1248.50 created a double top with last Friday’s, and it wouldn’t take much additional weakness for the futures to start...
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We're On Board For Gold's Surge

August 04 2005
Bullion has perked up nicely in the last few days, delivering on the promise of certain bullish technical signs that I cited here last week in an intraday bulletin: “Some VERY bullish action in gold this morning,” I wrote back then. “The ABCD pattern I've labeled in the August Gold...
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A Seminar Veteran Shares His Wisdom

August 03 2005
To our growing list of subscribers who have been through the trading-seminar mill, add Eric O., who offers some tips below that could help to shorten your learning curve. Eric writes as...
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A Sermon Aimed At Gloomy Gus

August 02 2005
Pessimism is frowned on at one of the chat groups that I frequent. The members are a quite diverse bunch, including big-time traders, money managers and financial speculators, but most of them evidently see eye to eye when it comes to the economy: sunny and warm on most days, with a chance of scattered showers. The group’s leader posted an open letter to...
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Subscriber Knows When to Fade Me

August 01 2005
Friday’s broad weakness turned my bullish forecasts to dross, but even so, I have my doubts that the rally has breathed its last. Subscriber Randy J. evidently made a few bucks fading my advice, which was to jump on near-term calls in the Diamonds and QQQs. He wrote as follows: “When you ‘threw in the towel’ and bought calls at-the-market, I had a...
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Citi's Weakness Promises Trouble

July 29 2005
Now here’s a coincidence: I was planning to comment on Citigroup’s reluctance to get in gear with the market when I received the following message yesterday afternoon from my technically savvy friend and old PSE colleague, Tom Tankka:  “Rick, any feelings about Citi’s weakness versus the market?”...
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Citi's Weakness Promises Trouble

July 29 2005
Now here’s a coincidence: I was planning to comment on Citigroup’s reluctance to get in gear with the market when I received the following message yesterday afternoon from my technically savvy friend and old PSE colleague, Tom Tankka:  “Rick, any feelings about Citi’s weakness versus the market?”...
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For All You Lurkers...

July 28 2005
The fact that my newsletter once came free to about 6,000 subscribers hasn’t  stopped at least a few of them from complaining constantly about how awful it was. “Go back to kindergarten and learn how to write,” admonished one. “And while you’re at it, try learning how to read a stock chart.” A frustrated trader, perhaps? You can never be sure,...
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A Reader's Tales Of Seminar Ripoffs

July 27 2005
Hey, if you’ve got a story to tell, don’t be shy! Yesterday’s tips here on how to spot phony gurus and trading instructors elicited some interesting tales from paid-up subscriber Joseph S., who qualifies as a true expert on the subject. Joe writes as...
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How to Spot Phony Gurus, Instructors

July 26 2005
Like many of you, I am constantly being bombarded by marketing hype from investment gurus who claim they will make me RICH. And although, like you, my gut reaction is to assume that most of them are charlatans, I too have a greedy spot for the right pitch. So far, though, I've come across nary a one that has delivered on its promise. Not that there aren’t any gurus out there whose advice can...
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Ominous Clouds

July 25 2005
I’ve toned down talk of Armageddon in my comments here recently, even though I remain convinced the U.S. and global economies are inching toward a deflationary bust of millennial proportions. Stock charts have helped to temper my...
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Google Sell-Off A Bull's Delight

July 22 2005
Google shares were getting bludgeoned in after-hours trading, down nearly $17 on word that revenues had grown by “only”100% over a year-earlier’s $700 million, and that profits had merely quadrupled. Here’s how the resident genius at Susquehanna Financial struggled to explain it: Revenue was a little better than published expectations, said Marianne Wolk, the firm’s Internet analyst,...
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Mini-S&P Coiled For Leap to 1260

July 21 2005
Yesterday’s two-and-a-half hour Q&A session covered quite a bit of ground, and I was able to field questions from more than a dozen paid subscribers during that time. Some of what we discussed bears repeating, including a 1242.50 target for the mini-S&P that was broached at the end of the session. That is now my minimum objective for this vehicle over the near term, and it will be short-able...
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Bond Futures Flash an Alert

July 20 2005
T-Bond futures have been flaccid since early June, presumably correcting the ten percent rally that began nine weeks earlier. But is it merely a correction?  From a hidden-pivot standpoint, the last few days have taken a heavy toll. Recall what I wrote here in early June: “After spiking to within three...
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Turning Burps Into Profits...

July 19 2005
It should be clear to you by now that we don’t need much price movement to trade ‘em up profitably -- only swings that produce intraday highs and lows, and the ability to use ultra-tight stop-losses. On Friday, for instance, the biggest intraday swing in the mini-S&P was just 6.25 points, or $312. In retrospect, you might ask why anyone would have bothered to attempt to trade such a burp. But if...
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Tedium's Seduction

July 15 2005
The chart below shows just how leaden stocks have become lately. Since peaking in late 2002, the VIX has fallen to within a hair of ten-year lows and now threatens to turn an already lethargic summer comatose. These days, technicians must burrow down to 15-minute charts to find anything resembling a trend, and the randomness of each session’s opening would vex a svengali. We continue to plug along...
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Google to $326, Gasoline to $3

July 14 2005
Yesterday morning’s Q&A session produced some eye-openers, including a new, $326 target for Google. The stock is trading just below $300 right now, having recorded an all-time high at $309 two weeks ago. Back in late May, with GOOG trading around $287, I projected a potentially shortable high at $315. Now, though, it looks as though the stock wants to go even higher. Because GOOG is a good proxy...
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The Mystery Of Anesthesia

July 13 2005
With Hurricane Dennis’s destructive power all but spent, news concerning Karl Rove’s mounting troubles dominated the airwaves yesterday. Notwithstanding the President’s expression of confidence in him, Rove will likely be history by August. Of considerably less interest was the turgid price movement on the nation’s major bourses. For traders, it was the kind of day that could make glue-sniffing seem...
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Evening News Feasts on Dennis

July 12 2005
The news media were feasting on Hurricane Dennis yesterday, even if it was no longer packing quite the punch of last year’s worst storms. In Washington, Karl Rove may have breathed a sigh of relief, since, between the weather and last week’s bombings in...
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Reading the Rally

July 11 2005
Thursday’s oversold bounce turned into an outright short-squeeze Friday, when stocks rose throughout the session with just one minor correction intraday. Fortunately, there needn’t be any confusion or guesswork about what is yet to come, since the thrust brought the Industrial Average to within inches of an important hidden-pivot resistance at 10465.77....
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Bombing Fails To Daunt Bulls

July 08 2005
Jihad came to the London Underground yesterday, killing 37 people and injuring another 700 but causing only a hiccup on Wall Street. The Dow Industrials ended the day with a 31-point gain after selling off hard in overnight trading when news of the bombing first hit. Perhaps the markets were reassured by Tony Blair’s morning TV appearance shortly after a series of explosions brought...
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Debating Odds Of Deflation

July 07 2005
Jim Otis, writing for The...
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Unleashing ASA

July 06 2005
With a currently bullish outlook on precious metals and the mining sector, we’re particularly eager to hear from subscribers with fresh ideas. Here’s one from subscriber Tim Huizenga that came my way during yesterday’s real-time Q&A session:...
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Trading Profits Will Come First

July 05 2005
Recent wrist surgery will constrain me from posting essays here over the next several weeks. Instead, I have increased the emphasis on identifying potentially profitable trades in stocks, options, commodities and mini-futures, and in providing detailed instructions for manevering in and out of these vehicles. My advice is geared not only toward short-term traders, but to...
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Trading Profits Will Come First

July 05 2005
  Recent wrist surgery will constrain me from posting essays here over the next several weeks. Instead, I have increased the emphasis on identifying potentially profitable trades in stocks, options, commodities and mini-futures, and in providing detailed instructions for manevering in and out of these vehicles. My...
» Read more

Gold Looks Ready For Thrust to $477

June 28 2005
I’ve reproduced two charts below, one suggesting that the euro is about to rise, the other that the dollar will fall. My conclusions are based on the dramatic way in which stochastic indicators for each have diverged relative to price. In the top chart, notice how the September euro’s five-day decline failed to get very oversold before the futures reversed and shot higher....
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A Soft-Shoe in Gold

June 27 2005
We had bids in below the market Friday for some QQQ calls, but perhaps we shouldn’t be too disappointed about not getting filled. The July 37s were trading for 2.00 apiece earlier this month and for 1.40 as recently as Thursday, but as the index tumbled yesterday toward an abysmal close, the July 37s came within 0.05 of our stingy 45-cent bid....
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Riding in Style To Soup Kitchen

June 24 2005
Investors supposedly were spooked by rising oil prices yesterday, but a glance at the chart below could make one wonder why they weren’t just as spooked last Friday and on Monday, when crude quotes first brushed against the $60 threshold. Wall Street denizens must have missed the previous day’s interview of Andrea Mitchell, aka Mrs. Alan Greenspan, on Imus in the Morning. “No one...
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Toward Greater Profitability...

June 23 2005
I majored in English literature, one reason why my trading system is light on such quantitative tools as regression analysis and chaos theory.  Even so, I’m unaware of any other system that consistently yields swing points more precise than the hidden pivots I serve up here each day.  The...
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Don't Be Lulled...

June 22 2005
Just when you think things couldn’t get any duller…  This time, though, technical signs are mildly disquieting, perhaps warning that we should be on our guard. But against what? I refer you to the chart below, which shows that the DJIA’s funereal rally over the last two weeks has left stochastic tracks that look even more somber than the...
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Mr. Greenspan's Real Conundrum

June 21 2005
With summer narcolepsy beginning to infuse Wall Street like embalming ether, we’ll turn our attention once again to the far more interesting topic of the housing bubble. The bubble surely exists, no matter what anyone says to the contrary, but one wonders whether its inevitable collapse is being delayed by anticipation itself. Anyone not from Mars will have noticed by now that the...
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Morning in America For Home Builders?

June 20 2005
It was morning in America on Friday for the home-builders, whose shares all gapped higher after a creative analyst at Smith Barney came up with a hitherto unsuspected reason why we should still be bullish on the...
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Enjoying the Ride As Gold Lifts Off

June 17 2005
Gold quotes rose sharply yesterday, supported by heavy fund buying that included a million-ounce purchase by one player. I’d told you to expect a rally to at least 436.80, which is precisely where the August Comex contract topped before taking a 90-minute breather. A subsequent two-dollar retracement left the futures sufficiently recharged for a further push to 438.50, portending...
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Readers Weigh In On Deflation Threat

June 16 2005
My recent comments on deflation have prompted some interesting responses. Here’s one from Gary Tanashian, proprietor of...
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Will Buffett Be Early Victim of Deflation?

June 15 2005
Monday’s edition featured the thoughts of fellow deflationist Mike "Mish" Shedlock, who believes as I do that this world is far too deeply in hock to avoid a debt deflation. Mish covered a lot of ground in explaining why this is so, but I’d like to add my two-cents’ worth, since he left a few things unsaid that could affect all investors – even financial geniuses like...
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Jacko's Acquittal Trumps Oil Surge

June 14 2005
Sharply rising oil quotes sapped the bull’s vigor yesterday, turning what began as a promising day into yet another exercise in tedium. We were prepared to pounce on the Russell mini-contract regardless of whether it went higher or lower, and although it did both during the course of the day, the trading range was too narrow to get us long or short....
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Why Deflation Is Inevitable

June 13 2005
Today I introduce you to the deflationist arguments of Whiskey and Gunpowder editor Mike “Mish” Shedlock, whose logic is quite similar to my...
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Beating Spam The Easy Way

June 10 2005
Another flatulent day on Wall Street. But just as I was getting Friday’s Touts under way, this message popped up on my computer...
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Together, We Can Move the Market

June 09 2005
You’ve heard the saying, “a watched pot never boils.” Well, neither, apparently, does a watched stock market. Judging from my mail these days, tous le monde thinks shares are fixing either to scream or to collapse. Even my own technical indicators appear to be demanding some BIG event, and soon. And how did...
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Fed's Two-Step Squelches Buzz

June 08 2005
Investors reverted to their worrisome ways yesterday, taking stocks for a rollercoaster ride after seemingly contradictory statements about the Fed’s intentions were made, respectively, by Alan Greenspan and Jack Guynn, a member of the Open Market Committee. I won’t try to deconstruct either guy’s words here, since that might run afoul of the Fed’s...
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Short-Term Swoon Appears Imminent

June 07 2005
For now, I’m sticking with my prediction of a tediously bullish summer, but there are some unmistakable warning signs that suggest stocks could fall over the near-term, perhaps sharply. Below is a chart that I published intraday that shows an incipiently bearish arc developing in the Dow Average’s daily-bar stochastic. While it would require only a...
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Need Reasons To Be Bullish?

June 06 2005
It’s no secret: I’d rather be known as a child molester than keep company with CNBC’s bull-pen regulars. Let me tick off some of the reasons why we should shun the mindless optimism that these days passes for hard analysis on the Street: 1) the economy is being propped up by record borrowing; 2) a monstrous housing bubble could pop at any time; 3) two of the country’s largest...
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Lender Recalls 1990 Meltdown

June 03 2005
Below is another of the many letters I received in response to my recent commentary on the decline in mortgage-lending standards. It’s impossible to know how many Americans fear that a housing bust is imminent, but judging from my mail such fears run deep. The letter is from a man in the lending business whom I quoted here earlier. In further recounting his apprenticeship in the...
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Herd's Exuberance In Step With News

June 02 2005
The bad-news-is-good-news mania that has ruled financial markets in recent months appears to have given way to a new mood, one that apparently perceives good news as, well, good news. T-bond prices soared as yields on the 10-year bond smashed below 4.00%. When active trading ceased for the day, they were trading to yield 3.89%, their lowest level in 14 months. Shares were nicely...
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Loans Too Easy, Insiders Agree

June 01 2005
My recent feature on the steep decline in lending standards drew some illuminating responses. I will reprint several of them this week, starting with the following letter from a man who once worked for World Mortgage, the primary lending arm of Golden West Financial Corp.. Although Golden West still enjoys a stellar reputation, the source...
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Wised-Up Bettor Shares His Story

May 31 2005
In my commentary a few weeks ago, I painted a romantic picture of gamblers who while away their days at the racetrack, smoking Cuban cigars and splurging their winnings on the good life. A friend of mine who has spent a great deal more time at the racetrack than I, and who knows better, has asked for equal time. Fortunately he is a Harvard-trained...
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Lending Standards Plumb New Depths

May 27 2005
The U.S. real estate bubble continues to swell like a lava dome, supporting full-blown manias on both coasts and in quite a few cities, suburbs and towns in between. You'd have to live in a...
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Panning for Gold The Easy Way...

May 26 2005
Wednesday’s on-line Q&A session was quite a bit longer than usual, but it allowed me to field queries in real time from more than a dozen subscribers. Tradable issues that received coverage intraday included the mini-S&P and mini-Nasdaq contracts, as well orange juice futures, General Motors, the Housing Sector Index, Imperial Oil, Clifton...
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QQQ Bears Play Russian Roulette

May 25 2005
If red were to come up on a roulette wheel ten times in a row, would you start betting only on black? Many less-seasoned gamblers would, perhaps even increasing their bet size if the streak continued. That might sound like a way to make a huge score eventually, but in fact those who bet like this habitually are almost guaranteed to die broke. For,...
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Summer Forecast: Bullish Tedium

May 24 2005
Is it possible the chart below can provide us with a simple answer to the question of what lies in store for the stock market this summer? My eye is drawn to the overbought peaks corresponding to the DJIA’s two most recent highs on the daily chart.  There is no divergence here, only a regular pattern of...
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Gold, Euro Fall On French Polls

May 23 2005
June Gold has broken down once again with Friday’s breach of a hidden-pivot support at 417.70. Earlier in the week the futures took a weak bounce off that number that lasted for a few days, but now that it has been violated a test of round-number support at $400 seems likely. Bullion’s weakness was corroborated by corresponding strength in the...
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Missed Opportunity, Or Just a Mirage?

May 20 2005
The momentous debate over judicial filibusters is making C-Span more interesting these days than the stock market. I had both running side-by-side on my desk yesterday, but it was no contest. The E-mini S&Ps were in a trance-inducing pattern that did little more than amplify the overnight session’s faint pulse, producing gratuitous six-point...
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Wall Street Chant: To-ga! To-ga! To-ga!

May 19 2005
The stock market was at its nutty, kinky, entertaining, devil-may-care best yesterday as shares in the home builders exploded higher on word that the Fed intends to keep raising administered rates. "The federal funds rate appears still to be below the level that we would expect to be consistent with the maintenance of stable inflation and full...
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A Kinder, Gentler Sort of Trade War

May 18 2005
That’s gratitude for you. The Chinese have been selling us nearly everything we need to live the life of Riley on the cheap – flat-panel TV sets, stainless steel patio grills, down comforters, graphite-frame trail bikes, silk scarves, custom furniture, computerized running shoes, robotic vacuum cleaners, laser pointers, you name it....
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Gold, Euro, Dollar At Important Pivots

May 17 2005
Both gold and the dollar reached hidden-pivot targets yesterday that deserve our close attention. I’d advertised a 417.70 downside objective last week for Comex June Gold and an 86.33 rally target for the Dollar Index. Both objectives were very nearly met on Monday, with the Dollar Index topping at 86.39 and June gold bottoming at 418.20. I...
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Dollar Doesn't Know It Should Be Falling

May 16 2005
If ebbing fear of inflation is Wall Street’s current flavor of the week, can fear of deflation be far behind?  Before you answer that question, consider what was going on in the bond markets on Friday. For one, the 10-year T-note was banging away at our ambitious, hidden-pivot rally target, sending...
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