July 2009

The ____ rallly target given here yesterday still obtains, although the futures may have to pull back to as low as _____ to get a running start for the next leap.  The turn could also come from ______, a Hidden Pivot, but I'd suggest using the lower number and a 0.70 stop-loss if you're going to take a stab at bottom-fishing.

For purposes of forecasting, the Indoos' hourly chart provides much greater clarity than that of the E-Mini S&P, so let me give it a whirl: _____ is the target that leaps out at me, and you can see its provenance in the accompanying chart. Short the E-Mini DOW (NQ) or the Diamonds by interpolating the target, but I wouldn't risk much, since you'll be stepping in front of a speeding freight train.  I've used the one-off 'A' here because it's so pretty, but if it is the lower 'A' which eventually determines the target, the top would occur at _____. I've used two decimal places because I like the way this pattern looks.

The futures are close to bumping into something solid -- i.e., a series of highs recorded in early June that were once fancied to be the "head" of yet one more worthless head-and-shoulder pattern. Hidden Pivots aside, my hunch is that rallies do not shred shorts with the vocaciousnesss of this one, only to fail at some marquee resistance like last month's peaks.  Whatever happens will be easily scalp-able on the lesser charts, I am sure, but there will not likely be a way to comfortably ride whatever trend, if any, develops from these levels. If it is to create a potent impulse leg on the daily chart, however, the key look-to-the-left peak that must be surpassed lies at ______, just a speck on the chart.

(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 critical to acknowledge that we all make mistakes. To succeed also includes knowing ourselves, especially the emotions which often rule our decisions. It can be just as important to avoid a disaster or to get out of a potential one than to have a successful trade.  Just as in baseball, we aim to have a high batting average and to avoid deep slumps. And as an aside, (speaking from experience), this invariably means making sure your spouse is comfortable with your finances. Because of these issues, we need to lay a foundation from which we can look at the markets, especially gold, intelligently and dispassionately.  Once we have done so, we will get into more detail. Please excuse any overlaps or repeats as we go along. Some might be intentional, some not. Gold as a Core Investment When I began contributing essays to Rick's Picks recently, I didn't know

545  PEOPLE vs 300 Million By Charlie Reese Politicians are the only people in the world  who create problems and then campaign against them. Have you ever  wondered, if both the Democrats and the Republicans are against deficits, WHY do we have deficits? Have you ever wondered, if  all the politicians are against inflation and high taxes, WHY do we have  inflation and high taxes? You and I don't propose a federal budget.  The president does.. You and I don't have the  Constitutional authority to vote on appropriations. The House of  Representatives does. You and I don't write the tax code, Congress  does. You and I don't set fiscal policy, Congress does. You  and I don't control monetary policy, the Federal Reserve  Bank does. One hundred senators, 435 congressmen, one  president, and nine Supreme Court justices equates to 545 human  beings out of the 300 million are directly, legally, morally,  and individually responsible for the domestic problems that plague  this country. I excluded the members of the Federal Reserve  Board because that problem was created by the  Congress. In 1913, Congress delegated its Constitutional duty  to provide a sound currency to a federally chartered, but private, central bank. I excluded all the special interests and lobbyists for a  sound reason.. They have no legal authority.  They have no  ability to coerce a senator, a congressman, or a president to do one cotton-picking thing. I don't care if they offer a politician $1 million dollars in cash.  The  politician has the power to accept or reject it. No matter what  the lobbyist promises, it is the legislator's responsibility  to determine  how he votes. Those 545 human beings spend much of their energy  convincing you that what they did is not their fault.    They cooperate in this common con regardless of party.

We can use 9158 as an upside target, although a pullback to the 8622 midpoint associated with that Hidden Pivot may be necessary before the Indoos can mount an assault on early June's high at 8875.

We were unable to roll our calendar spread because the August 10 calls we'd needed to short for 0.35 traded no higher than 0.22. Since we covered the short July 10 calls for 0.05, we now hold four September 10 calls effectively for a CREDIT of 0.55 apiece. That means the worst we can do, no matter where the stock is trading at expiration in September, is make $220 on our position.  Let's continue trying to build more edge into it by offering four August 10 calls short for 0.35, good-till-canceled.  _______ UPDATE (July 23):  With SLW trading as high today as 9.47, our order to short four August 10 calls for 0.35 filled easily.  That means we now hold the September 10-August 10 calendar spead effectively for a 0.90 CREDIT, plus its current value (around 0.25 at the moment).  Do nothing further for now. 

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 "eyeing" changes in the work week, but the workers themselves. And what they have in mind is nothing so onerous as unpaid work days;  rather, they have envisioned for themselves four-day work weeks - let's be candid and call it three-day weekends -- as a supposed way to close the budget gap. Thus, instead of shuffling paper for eight hours a day, Monday through Friday, they are proposing to do their paper-shuffling in four ten-hour workdays, presumably Monday through Thursday. Talk about chutzpah!   And where, you might ask, are the savings supposed to come from?  According to the workers, the city's energy costs would drop, since certain municipal buildings would be closed one day a week. However, any taxpayer hoping to reap a savings bonanza is bound to be disappointed, since the sums involved are laughably small in comparison to Boulder's $5 million problem. In fact, by having the Boulder Municipal Building go dark one day per week, the city would save a paltry $11,000 per year. We can think of a much easier way to save five or six times that amount -- i.e., by eliminating one, presumably superfluous, paper-shuffler from the payroll. Long-term, the savings would be even greater, actually, since there would be one less pension plan to fund.  A Feudal System We would surmise that most

The most useful benchmark I can cite right now is ____, a midpoint resistance derived from the pattern shown in the accompanying chart. It's not very compelling because the larger pattern has experienced so many disruptions, but we can use it as a minimum upside objective for the near term (meaning two weeks or less) nonetheless. It's sibling 'D' target lies at _____, a number mentioned here earlier.  As noted here before, the most powerfully bullish signal we could ask for would be an impulsive rally that exceeds both of the numbered peaks without taking a corrective breather.