June 2009

The gnarly-looking pattern shown in the chart projects a tradable low at 135.30, but because this trade is being offered as a Pick of the Day, we'll use a more conservative target at _____. If and when the stock approaches that Hidden Pivot, touching ____, buy a single October 150 call (APVJJ).  I estimate they will be trading for around ____, but you may be able to improve on that price by tracking the bid/asked spread closely intraday. ______ UPDATE: Cancel the bid, since AAPL is trending up after having traded no lower than 134.53.

Conventional support at a too-obvious trendline will take precedence over Hidden Pivots today, but if the line is hit for the fourth time, don't expect to get long there without having your confidence tested.  My suggestion for bottom-fishing would be to use a Hidden Pivot at _____that is not far below the trendline. By then, the breakdown may have served to reduce your competition.

The head-and-shoulders pattern flagged here recently appears to be playing out in textbook fashion, although we may be able to improve on the forecast by using a  Hidden Pivot target at _____ that was mentioned here earlier. You can try bottom-fishing there with a stop-loss as tight as _____, but please note that a picture-perfect bottom based on the head-and-shoulders pattern would imply a reversal near ____-- or perhaps even in the low 880s if the selling gets a little crazy. Alternatively, bulls could seize the advantage today, turning the hourly chart positive with a print at _____.

The rally off Friday's lows may have looked ferocious to those who were short, but from a Hidden Pivot perspective it has been deliberate and even a bit timid at times. Notice in the hourly chart how each thrust over the two days of the rally has stopped shy of breaching all prior peaks to the left of it. Instead, the ascent has unfolded one low-wattage impulse leg at a time. As of Friday's close, the futures looked ready for yet another push -- to at least ____ if that Hidden Pivot's midpoint sibling at _____ gives way.  However, bulls will need to do just a tad better, pushing past a tiny, look-to-the-left peak at _____, to clinch their case; otherwise, it may require a re-test of the recent low at 111^21 to put in a durable base.

Bailing out the economy and the banking system has been such a brazenly corrupt, mendacious and, ultimately, doomed enterprise that one could almost forget for a moment how very clever the perpetrators are.  If we needed proof that these guys are the slickest behind-the-scenes spin doctors around, consider the following two headlines that ran on successive days atop the Wall Street Journal's front page. "Rate Rise Clouds Recovery" was the grim news that greeted us last Thursday, on day one.  The article described how, despite the Federal Reserve's explicit strategy of buying as much Treasury paper as it takes to hold market rates down, particularly in the mortgage sector, rates are rising anyway, and steeply. In fact, 30-year fixeds climbed to 5.79% from 5.00% just two weeks earlier, suggesting that market demand for mortgage paper is drying up despite the Fed's strategy of direct monetization of Treasury debt (a.k.a. "quantitative easing"). But get this: On day two, as if to reassure us that Treasury's borrowing is well under control despite the fact that the opposite is true, the spinmeisters co-opted the Journal's front page with this well timed policy leak: "Fed to Keep Lid on Bond Buys".  Are we actually being asked to believe that, absent the acceleration of direct purchases of Treasury paper by the central bank, demand from other sources will suffice to keep rates from rising further?  Just Like the Recovery of 1931 The key to having the public ignore the blatant contradictions in the two headlines is to have the news media conflate economic recovery with the spurious recovery that has been occurring in the stock market. The spinmeisters have been making as much hay with this deception as they can, even if the bear rally in stocks harkens directly back to an equally spurious recovery in 1931.

Think the Chinese are going to dump their Treasury bonds because they’re worried about a possible collapse of the dollar?  Not a chance, says U.S. forecaster Rick Ackerman, who was recently interviewed on the BBC show On the Edge with Max Keiser.  Far from being worried, say Ackerman. China has written off its trillion dollar exposure and knows the day is coming when other currencies will supplant the greenback in global trade. To access the interview, click here.

Fresh Touts and Side Bets will be out later Sunday, once index futures have had a chance to warm up.  One additional note:  The Morning Briefing will be held Monday through Thursday, and not all five days as originally scheduled, since I will be in Telluride later this week for the bluegrass festival.

Bailing out the economy and the banking system has been such a brazenly corrupt, mendacious and, ultimately, doomed enterprise that one could almost forget for a moment how very clever the perpetrators are.  If we needed proof that these guys are the slickest behind-the-scenes spin doctors around, consider the following two headlines that ran on successive days atop the Wall Street Journal's front page. "Rate Rise Clouds Recovery" was the grim news that greeted us last Thursday, on day one.  The article described how, despite the Federal Reserve's explicit strategy of buying as much Treasury paper as it takes to hold market rates down, particularly in the mortgage sector, rates are rising anyway, and steeply. In fact, 30-year fixeds climbed to 5.79% from 5.00% just two weeks earlier, suggesting that market demand for mortgage paper is drying up despite the Fed's strategy of direct monetization of Treasury debt (a.k.a. "quantitative easing"). But get this: On day two, as if to reassure us that Treasury's borrowing is well under control despite the fact that the opposite is true, the spinmeisters co-opted the Journal's front page with this well timed policy leak: "Fed to Keep Lid on Bond Buys".  Are we actually being asked to believe that, absent the acceleration of direct purchases of Treasury paper by the central bank, demand from other sources will suffice to keep rates from rising further?  Just Like the Recovery of 1931 The key to having the public ignore the blatant contradictions in the two headlines is to have the news media conflate economic recovery with the spurious recovery that has been occurring in the stock market. The spinmeisters have been making as much hay with this deception as they can, even if the bear rally in stocks harkens directly back to an equally spurious recovery in

The guy in the picture spent the weekend shuffling around the pedestrian mall in Boulder, Colorado, but he should try hanging out in front of the COMEX in New York if he’s serious about buying gold and silver cheap.  It was there on Friday that bullion was not merely “unwanted,” but positively despised. Exchange traders couldn’t dump the stuff fast enough, judging from the way prices plummeted early in the session and barely bounced for the remainder of the day.  When the dust had settled, August Gold was sitting at 957.50, down 24.80. July Silver got hit nearly twice as hard in percentage terms, diving 64 cents, or 4 percent, to close at 15.25. Read the Rest of the Article | Comments *** The dollar extended its winning streak yesterday, rallying overnight to narrowly exceed the bullish benchmark we’d set for it just a day earlier. If the dollar is indeed reversing direction after three months of steady weakness, it could darken the economic picture. The reason is that it would put pressure on all who owe dollars, intensifying the effects of a global debt deflation that has been... Read the Rest of the Article | Comments *** The jury is still out on our favorite stock market bellwether, Goldman Sachs, since the shares of the well-connected banking firm failed yesterday to push above an important Hidden Pivot resistance at 151.24. Although the stock popped just high enough to stop us out of a profitable short position held from within a penny of the recent top, the rally fizzled after a head-fake on the opening. Goldman ended the day up just 56 cents, performing in-line with a generally turgid market. Yesterday we said Goldman could cruise all the way... Read the Rest of the Article | Comments *** We side