July 2009

Today's Rick's Picks forecasts take the prize, hands-down, for the worst of 2009, with virtually everything that was predicted going the "wrong" way.  We'll examine some of the reasons things may have gone awry during this morning's remedial session. Five recent grads of the Hidden Pivot webinar are registered for the interactive class.

After a promising, strongly impulsive rally earlier this month, the Dollar Index has shown a worrisome inability to gain altitude. Even so, nearly a month of backsliding has yet  to breach the point 'C'' low of the bullish pattern shown in the chart. That could occur with just a little more weakness over the next day or two, and it would be even more bearish if the deline  breached a second prior low at _____ while it's at it. We'll want to keep a close eye on this one, since the condition of the dollar is a key variable in the global slide toward Depression.

A Hidden Pivot at _____ looks like a high-confidence number at this point, so we'll use it as a minimum upside projection for the near term. Buyers should look to get in near _____ Wednesday night, since that's the midpoint sibling of our upside target, but please note that a prior low at _____ may impede the bid.

Another day of gratuitous pumping, but I'll stick with a 942.25 target, since the 925.25 midpoint sibling of that Hidden Pivot target has been impaled twice this week by bulls' spears. I find no compelling correction target for night owls to bottom-fish, so boarding ahead of the next thrust will probably be most easily accomplished via "camouflage" on the five-minute (or  lower) chart. _______ UPDATE:  Stocks took a drubbing, supposedly because news of 9.5% unemployment and the loss of 467,000 jobs  took investors by surprise. But which investors? Only the pathetic dimwits who are glued to CNBC all day long could have been expecting much better. In technical terms, the selloff didn't make much of a statement, since no important lows were breached on the hourly chart.  Still, even those of us who tend to ignore the ubiquitous head-and-shoulders pattern cannot help but see the one forming in this vehicle.  If and when the neckline gives way, we'll be looking at a plunge to 820.

We ought to savor the luxury of fleeting times such as these, when Matters of Consequence have been shoved off the front page by the sordid and the salacious. A Burmese python got loose in a Florida home yesterday, strangling a two-year-old. Should the pet's owner, the boyfriend of the toddler's mother, be charged with endangerment? Tune in to Larry King for the debate. In other news, the piously unsensational NPR jumped headlong into the debate over whether Mark Sanford should resign South Carolina's governorship for the sin of adultery. How quaint to think that, at least in politics, there is still some shame left in the ho-hummery of extramarital trysts. In the meantime, we read on an inside page that California is about to throw in the towel, fiscally speaking. Will the Federal Government, with its unlimited ability to create rescue money, bail out the state?  You can bet it'll be a mighty slow day for tabloid news before Larry King airs that issue. We note in the same story that no fewer than 15 states are teetering on the edge of bankruptcy and that 21 others are seriously on the ropes. If and when the U.S. decides to get involved, putting what remains of its by-now  laughable "full faith and credit" behind state and local bonds, we have one word of advice to investors: Don't be holding dollars. In practice, that means you should already have more gold coins in your safe box than dollars in your savings account. California Bankruptcy Hard to Explain We shouldn't be quick to castigate the news media for being so utterly clueless about which news deserves to be out on the front page. Splash California's bankruptcy above the fold, and you've got to explain what it means. The task is made even more

I can understand the government's wish to soothe the faint hearts of the American public with a Goldman Sachs-induced market rally.  It has brought public confidence up from a horrific 22 to a whopping 39, if I remember the numbers correctly.  Now let us look at some of the facts.  The government's statistics say there are 14 million people out of work.  The firm of Glisken Shiff Economics, in a commentary out Monday, indicated that there are about 30 million people out of work.  The public was buoyed by the fact that the jobs numbers were better tha expected.  Boy, only 630,000 +/- lost their jobs last month! Here is the kicker:  70% of our economy is driven by consumer spending.  With more and more people losing their jobs, who is going to drive this economy?   To confirm that spending has dropped, take a look at the store closings:  Waldenbooks, Jo Ann Stores, J.Jill,  WataBurger and Advanced Auto Parts.  These firms are closing between 10 and 50 stores.  Rite Aid is set to close 117 outlets and Jones Apparel is planning to close 225 stores.  One fast-food outlet after another is offering deals that will cut into profits. How will all these store closings affect the commercial real estate market and the next wave of foreclosures?  It doesn't address how many mom-and-pop outfits will close.  I remember driving through L.A. in the 1970s and seeing strip mall after strip mall totally vacant, their parking lots chained closed.  As you can tell, I am not overly bullish on this market and this rally, but far be it for me to stand in the way of a moving train or Goldman Sachs. Just one man's opinion.  Ira.

Summer doldrums produced few compelling trading opportunities, but we were able to find things to do nonetheless in the E-Mini S&P, and in gold futures. We spent the entire hour considering tradable nuances in each, with the goal of initiating trades that were as close to riskless as possible. Comex Gold's charts proved somewhat frustrating in this regard, and therefore especially rewarding from the instructional point of view.

The Dow Industrial Average needs to catch fire today or tomorrow, since any further drift south will squander a rally target at 9003 that should have been easy pickings on the last leg up. That one topped at 8876, and if the Indoos, currently trading for 8447, were fall to 8098 before exceeding 8876, it would be warning bulls to reef the sails.

A midpoint support at 13.405 is my minimum downside objective for the near term, but any lower would hint of more weakness to as low as 13.115.