August 2009

There's not much going on, really, but we could still take encouragement if the futures push past  the minor, _____ peak mentioned here yesterday. Otherwise, look for any weakness to hit _____, a midpoint support that is not recommended for bottom-fishing because of its close proximity to this week's lows.

A Hidden Pivot at 76.58 makes a compelling downside objective on the 180-minute chart, but if it fails to arrest the slide, the 72.93 'D' target of a larger pattern will be in play. Both patterns are shown in the accompanying chart. Alternatively, it would take a rally exceeding 80.30 to turn the intraday charts decisively bullish.

UNG's collapse yesterday brought it to within 11 cents of an 11.31 Hidden Pivot target that I flagged during the webinar demo.  I offer the target to all who have been picking bottoms the whole way down, encouraged perhaps by the very bullish outlook espoused a while back by Karim. The risk of bottom-fishing is arithmetically lower now, but surely there are more-opportune vehicles to trade? _______ UPDATE: UNG has bounced sharply this morning off an 11.30 low that lay just one tick from our target. If you bought the bottom, you're on you're on now.

The futures are down seven points at the moment, a tick off their evening lows. So far, it appears to be a routine shakedown to lower the price to more comfortable levels than obtained at Thursday's close. The selling would become more serious, however, if it were to exceed 991.50 to the downside, creating a bearish impulse leg on the lesser charts.  In a bigger picture, because the decline is following the creation earlier this month of a robustly bullish impulse leg on the weekly chart,  we should assume it is merely corrective. A major new leg up would be signaled by a 37.50-point "booster stage" rally from within the pullback range 923-978.

Here's ignorance all ablaze, high atop the front page of Wednesday's Wall Street Journal: "Reluctant Shoppers Hold Back Recovery".  So there you have it. If only we would all make a beeline for the mall and shop-till-we-drop, just like the good old days, then we would have the kind of recovery that warms economists' hearts. And it is evidently the economists, more than anyone else, who are clamoring for a return to the halcyon days of binge shopping in America. In a survey conducted by the Journal last month, 60 percent of  the dismal scientists who were polled felt that a substantial increase in consumer spending is needed for sustained growth. These guys must be smoking the same stuff that Alan Greenspan smoked when he celebrated the virtues of variable rate mortgages, assuring us around the same time that inflated home values constituted "wealth." The quotation marks around that word are ours, since we doubt the former Fed chairman was using it ironically. Nor, we surmise, was he being ironic when he spoke of a supposed boom in capital investment at a time when household savings growth was negative. I've repeated this point numerous times, since I still find it dumbfounding that a guy with his academic chops could have said stuff like that. What a tragedy for the world that he did not pursue his calling as a jazz musician. In 1943-44 he was a promising clarinetist studying at Juilliard -- playing with a young Stan Getz, no less!  Alleged Roast Beef The Wall Street Journal's steadfast support for rampant consumerism nicely complements the economists' desire to see us spending mindlessly again. The Journal doesn't much care what we buy, as long as it puts cash in someone's till. They once did a lengthy article on profitability problems that for

Afte a burst of short covering yesterday on news that I must have missed, the futures were straddling 1000 shortly after midnight, challenging bears to "make my day".  Are you feeling lucky, punk? Well are you?

Let's see if December Gold can make the modest leap to 950.70 today that is required to refresh the bullish trend on the intraday charts. Yesterday's rally reversed a bearish impulse leg on the 180-minute chart, so we should be encouraged about the outcome. As of 12:40 a.m., the 15-minute chart was promising 948.00, provided the 941.50 low made three hours ago holds. Any decisive progress above that first number, a midpoint resistance, would hint of more strength to as high as 954.40.

If the futures rally into a narrow window this morning, pulling back from an intraday high anywhere between 14.155 and 14.195, use the ABC pattern to get long at conventional point 'X', since you'd have pretty good camouflage. For your guidance, I've drawn in the coordinates and the hypothetical rally/pullback in the accompanying chart.

Viewed on the daily chart, the apparent swiftness of the recovery from the plunge begun last Friday looks, well, unseemly, especially considering the steepness of the rally it was presumed to have been correcting.  Couldn't the bulls have waited for another day or two before leaping anew?   Whatever the case, we can ill afford to ignore the fact that the futures  slightly exceeded  an  important peak recorded last November before they took a breather. That is of course bullish, and the implications thereof will remain intact as long as the S&Ps don't take a 50-point header next week.