July 2009

A compelling Hidden Pivot target sits not far above, at 68.35, but if it's breached by more than 6-8 cents expect the rally to continue to at least 68.99.  The lower number looks like the better place to try shorting, since the higher is too close to a whole number where at least moderate "natural" resistance will be anticipated. _______ UPDATE: The futures topped at exactly 68.99 before retreating sharply. In retrospect, the safest trade would have been a long from above 68.35.  In reality, anyone who followed my advice would have lost money on the trade.

Unlike the banks, IBM still makes money the old-fashioned way, selling services and products.  It has had quite a move from March's lows near 83, but the rally could end at 127.12, a Hidden Pivot. Keep that number in mind if you've got a long-term position in the stock or would like to try shorting it.

The already maniacal pitch of Goldman's rally has turned parabolic, suggesting that the rally could soon reach a blowoff top.  We impede its progress gingerly if at all, but even so, the pattern shown in the accompanying chart is clear enough to warrant a short nonetheless at its _____ Hidden Pivot target. I'll leave this trade to your designs, but officially we'll look to buy two September 160 puts if and when the stock gets within 10-15 cents of the target.

Because the dollar is in such crucial territory, we should monitor it very closely in the days ahead.  Most immediately, we should note that DXY is forming an abc uptrend that will require a decisive push past a _____ midpoint to "actualize" the promising bullish impulse leg created in the last two sessions. The pattern is shown in the accompanying chart, and it projects to as high as _____ over the near term. If the dollar, now perched at the edge of an abyss, is about to turn higher, it should have little trouble reaching the latter number and then pushing past it, presumably the same day.

As California goes, so goes the nation? We had better hope not, since the state's economy is imploding so swiftly that it threatens to take cities and towns from Eureka to San Diego down with it. Consider the plight of El Monte, a city of 125,000 in Los Angeles County that recently cut expenditures to the bone in order to close a $9.5 million budget gap for the fiscal year begun in July.  Working frantically against an inflexible deadline, local officials furloughed most of the city's 375 workers, laid off 17 police officers and closed down an aquatic center for all but four months of the year. Then they got the bad news: Sacramento will not be sending them $2 million in gasoline taxes they were counting on. And that's not all:  The state will be taking even more revenues from El Monte, but the city won't know how much until the legislators get their own house in order. "It's devastating," city manager Jim Mussenden told a reporter for the Wall Street Journal. "We've already worked very hard to reduce our budget, and now we will have to look at more cuts."      Redlands, also in Southern California, is taking similarly dire measures to balance its $50 million budget. After cutting $5 million of outlays through June, the city of 70,000 is looking to save another $5 million by opening libraries just two or three days a week, closing some senior centers, asking volunteers to maintain parks, and furloughing employees for ten days. In addition, Redlands is going to leave 15 positions unfilled on the city's 83-officer police force. "This could really push us over the edge," a city spokesman told the Journal. L.A. Short-Changed Big cities are getting hit just as hard. Los Angeles officials said they expect to

The quick brown fox...

Bureaucracy, Taxpayers Headed for a Collision The headline atop the front page of this morning’s Boulder Camera suggests a city struggling diligently to balance its budget: “Work-Week Options Eyed”.  Reading this, one might infer that the city is contemplating unpaid furloughs or some other means of reducing payroll outlays, right?  That would be entirely appropriate, given that Boulder faces a $5 million budget shortfall next year. But that is not what the story is about. In the first place, it is not the city that is “eying” changes in the work week, but the workers themselves. And what they have in mind is nothing so onerous as unpaid work days... Read the Rest of the Article | Comments *** Why Gold Should Anchor a Portfolio (Following is the fourth in a series of articles on gold by Chuck Cohen, a financial consultant and lifelong resident of New York City.) Recently I discussed some of the reasons investors often fall short. Today I want to help bring clarity to your investment goals and also explain why gold should hold a central place in your portfolio. If you succeed in these two areas, you’ll not only prosper, you will also be prepared for the incredible changes and shocks that I believe are coming. As Richard Russell always stresses, succeeding in the stock market is a lifetime learning process. At age 84 or so, he is still working diligently at it. As we have all learned, making money in the stock market is not as easy as the hucksters would have us believe. Success comes not just from market knowledge but from learning from our mistakes. And it is... Read the Rest of the Article | Comments *** Fed Throttles Back, Having Achieved Little The stock market carved out yet another bowl-shaped formation

I've flagged a potentially important number in today's analysis of the Gold Bug Index, and although it's too early to predict how things will play out, price action at this resistance could provide some important clues about what might happen next.

A Hidden Pivot target at 9168 offers an enticing opportunity to get short today with a stop-loss as tight as 5-7 points.