March 2010

Gold would need to pop for nearly $25 today to put bears seriously on the ropes. That's not impossible, but we could see a nice bottom-fishing opportunity in the meantime on a pullback from relatively modest heights.

Apple not only has a hot story, it's got some great products, and the company's shares continue to earn their lofty multiple the old-fashioned way -- i.e., with a fabulous run of genuine earnings growth.  That said, we should pay close attention to the rally at these heights, since it's about to encounter a Hidden Pivot resistance on the monthly chart at 231.00,  exactly $6 above the so-far record high. There are no targets beyond that number that are particularly appealing, although an easy move past it would portend more upside of at least $15-$20.

Yesterday's rally, heartwarming as it may have seemed, has given us only dueling impulse legs on the intraday charts so far. The bias is bullish nonetheless and projects to at least 18.075, but we should like to see the targeted thrust go a penny higher, exceeding the look-to-the-left peak shown in the chart, before we get excited.

The futures passed up a chance to savage bulls yesterday, bouncing back sharply after having failed to achieve the target of a minor downtrend. That's bullish as far as it goes, but a decisive confirmation today seems mildly unlikely, since it would require a print exceeding 1148.00.  In the meantime, I've sketched out a price pattern that would yield an enticing buy at a midpoint support. Specific numbers would be premature t this point, since the futures were groping for a point 'C' high when we went to press around 1 a.m. EST.

Take a good look at the chart alongside if you think it's time for bears to take a stand.  If ever a price pattern reeked of upwardliness, this is it. The futures showed no hesitation last week maneuvering into position to head-butt  January's highs, and so we shouldn't look for them to resist the onslaught for long. Let's hope the broad averages are not predicting the political resurgence of Barack Obama and his whacky ideas. That would be quite a price to pay for fostering the egregiously misguided impression that Mr. Obama has turned out to be a guy that Wall Street can live with.

So, are we now supposed to believe that every Toyota that runs off the road, or plows into another car, or leaps a concrete berm in a Safeway parking lot, is a runaway?  The latest report of a Toyota wilding spree – supposedly caused by a faulty Prius gas pedal -- surfaced the other day in California. The driver said the car reached 94 mph, although we’d never have imagined the tortoise-shaped vehicle was capable of exceeding the speed limit, even on steep downhill stretches. Another Prius crashed into a stone wall in New York, but we’re awaiting the accident report before we blame Japanese engineers. The automaker said it was going to look into both incidents, as well as some others, and we hope they do. The investigation would not come a moment too soon, since every Toyota driver who gets stopped for speeding these days could tell the cop that his car, apparently possessed by demons, had simply willed itself to violate the law. Toyota’s competitors must be breathing a sigh of relief. BMW, for one, has engineered such unnecessary complexity into the car’s driver controls that one practically needs an engineering degree to activate the heater/defroster. If BMW’s throttle linkage were to experience a congenital problem with sticking, determining the cause would be like trying to trace the source of an intermittent humming sound in a NASA space shuttle. A hundred guys with stethoscopes would probably drive themselves crazy after a few weeks of fruitless listening, tapping, plinking and toggling. The Bimmer Myth Full disclosure: I’ve been driving Japanese cars myself for the last 35 years, having lost my fondness for BMWs while a charter member of the BMW Car Club of America. (Old-timers may recall that BMW drivers used to flash their headlights at each other

We happened to be looking at gold and silver charts at precisely the same time DaBoyz decided to shake them down. Ironically, this proved educational mainly because the nasty price action left the larger, bullish picture in bullion undisturbed. We discussed camouflage entry strategies predicated on recovery rallies that were still speculative at the time of this lesson. We also delved into some of the technical reasons why the bear rally in the broad averages appears to be unstoppable, at least for the moment.

WE''ve just received the latest report from Auerbach & Grayson from our friend and longtime subscriber Jonathan Aauerbach. It covers the S&P 500,  Gold, Palladium, Crude, VIX, Nordic 30, EURO, GBP, DXY, MS Emerging Index, Dubai, FTSE 100, Russell 2000, CSCO, Retail ETF, NYSE A/D and % of stocks >200 day MA.  Click here to access the pdf file.

As of midnight EST, the futures had drifted below Monday's intraday low, but without producing the snap-back rally we should expect when a key support is breached on such thin volume. This would appear to hint of weakness to come.