April 2009

_______ UPDATE: The 830.00 mipoint precisely contained selling overnight, and a contract bought at that low could have reaped the fruits of the 14.50-point rally that followed. The actual high in pre-dawn trading was at 844.50 -- precisely coincident with the target given in the chat room on Thursday. The rally gave way to a schizoid, 20-point dive that continues to this moment. The selloff was said to have been triggered by a woesome unemployment number that could not have surprised anyone.

Someone mentioned my bullish targets for this vehicle in the chat room Thursday, so I thought I'd have another look. Despite the selloff in physical gold, the outlook for stocks tracked in the Gold Bugs Index remains bright. Yesterday's cascade

Rick's Picks subscribers were well prepared for the diabolical price action in gold yesterday, since a forecast sent out the night before caught both the high and low of June Gold's $35 swing almost exactly. Comex futures were in a promising rally when we published an advisory just after midnight that warned of potential trouble precisely at 931.60 (a "Hidden Pivot" resistance). Gold in fact topped moments later at 931.80, then plummeted to 896.10 -- just 80 cents from a bearish target we'd spotlighted in yet another midnight bulletin.  Price action in the E-Mini S&P proved equally felicitous, since we'd identified a rally target at 843.75 that came within 1.50 points of nailing the top of yesterday's 37-point surge. That target also went out to subscribers in the wee hours on Thursday. So what are we forecasting now?  More of the same, actually. If Gold takes out yesterday's bottom, it is likely to fall to at least 874.00 or to 856.00 if any lower. As for the S&P futures, currently trading for around 835, they look like a good bet to rally to at least 852, which would imply a 150-point surge in the Dow Industrials. The picture of strength is reinforced by the strong leadership of Goldman Sachs, a favorite bellwether of ours that looks all but certain to reach a Hidden Pivot target at 120.34.  With the stock trading in the $90s a while back, we advised purchasing some July 115-April 115 calendar spreads for $6, and the trade has worked out nicely. But with a further rally to $120 now in prospect, we advised adding some July 120-April 120 call spreads to the position for 9.80. This spread could widen to as much as 18.00 if Goldman shares are sitting just below 120 when the April options

Poised precisely at a midpoint resistance at 110.45, Goldman looks extremely likely to pop to exactly xxx, and soon. However, it is too risky for me to suggest that you simply buy calls at-the-market on the bell, since prices are likely to be rigged and rapacious on the breakaway gap we might expect. We already hold two July 115-April 115 calendar spreads for 6.o0 that are quite profitable,

Yesterday's fleeting spike was constructive, since it poked slightly above the last fleeting spike, 934.70, recorded two days earlier. This refreshed the bull trend despite the selloff that followed, and it also put into play a

DaBoyz have shorts on the ropes Wednesday night, and so I have furnished a somewhat ambitious target for the E-Mini S&Ps. It is corroborated by a rally target in Goldman that I would rate as a very high-probability number, and you can play the move with relatively little risk by buying a couple of July-April calendar spreads at the 120 strike. This will be much preferable to buying calls on market orders at the opening, since prices will be rigged to extort.

A mini-wilding spree in the final half-hour brought the futures back to within easy distance of the day's highs, setting up a minor rally pattern in the process that points to 815.00, minimum. As of 7:15 p.m. EDT the rally had stalled precisely at the

Yesterday's challenge - explain how inflation will get off the launching pad in a deflating economy - went unanswered, although the topic itself provoked quite a response in the Rick's Picks forum. The question was not rhetorical, since in order to produce inflation there has to be a mechanism for all of that printing press money inflationists keep blathering about to physically make its way into the consumer economy. Anyone who thinks massive fiscal spending alone can create inflation should read Hayek's The Road to Serfdom, since the equally massive borrowing needed to finance a public works economy will place a severe drag on the productive, private half of the economy (and that's assuming there will even be a private economy once President Obama completes his fascist project of merging The Government with America's biggest corporations). One of the more interesting comments in the forum came from reader David White: "There will be no policy changes," David writes, "only more of the same until the situation is so dire that handing out checks will be the only way to get money into consumer's hands, thus depreciating the currency to save the economy. For a little while longer, at least. Rick obviously doesn't believe that Bernanke won't do what he said he would. But I assure you he will. For that matter, the government started handing checks out last you, setting the precedent for bigger and bigger checks." When Government Gives Up  My response:   "Exactly:  "...until the situation is so dire that handing out checks will be the only way to get money into consumer's hands." This is what I meant when I wrote the following: " Hyperinflation will arrive when The Government decides that fiscal stimulus alone cannot ever get us out of debt, given the vast sums of debt that

In the article linked below, Mises Institute’s Frank Shostak has exposed the toxic asset cleanup for the brazen fraud that it is. Either out of Krugman-like ignorance, or cynicism, or a combination of both, the plan’s authors have failed to distinguish between savings and credit as the source of new lending. Once again, Shostak has pointed out to his benighted colleagues that the Emperor is wearing no clothes. Link: Would Cleansing Banks' Balance Sheets Kick-start the US Economy?