March 2011

We looked at Cameco during yesterday's impromptu session and the news was bad.  A Hidden Pivot at 19.42 is the most compelling target I can find on the daily chart (see inset), although it implies that the stock will have an opportunity to reverse off its sibling midpoint at 26.14.

We happened on a 35.67 correction target during last week's impromptu webinar, so I'll suggest bidding down there for 400 shares, good-till-canceled, with a stop-loss at 35.49. If you can capture some profits on the short side as SLW falls (assuming it does), that will help cushion the stop.  We'd try again at 34.61, since that's where SLW will likely fall if the first Hidden Pivot gets trounced. ______ UPDATE (March 21, 1:43 a.m. EDT):  Odds of a fill have diminished somewhat with Silver now trading higher, but we'll leave the stink bid in anyway, since the downside target itself remains valid. ______ UPDATE (March 21):  The stock has gapped higher for two consecutive days, so we can forget about buying it on-the-cheap.

The 400 shares we hold from 50.40 survived the 50.18 stop-loss I'd advised yesterday, but I have little confidence in the so-far feeble rally that has ensued.  It kept the stock hovering just above yesterday's lows, but that's about all.  For now, maintain the stop-loss as advised and note as well that NEM would need to touch 51.13 to get out of immediate jeopardy.

Silver looks heavier than gold at the moment, but if its demeanor improves, it will still take a pop above the 35.340 peak shown in the chart to put the bad guys on the run. There are a couple of minor rally patterns (all from Thursday) that point moderately higher, but none shows much promise for producing a possible entry point.  If the rally should fail, however, and the futures head south, look for the selling to bring them down to at least 32.365, or perhaps 32.140 if any lower.

As of around 8:20 p.m., the futures have been as high as 1412.00, three ticks above a Hidden Pivot resistance found on the 30-minute chart. This is moderately bullish for the very near-term, but even more encouraging is that the high slightly exceeded the look-to-the-left peak at 1411.40 labeled in the chart. A pullback that resembles the one shown could provide an excellent camouflage opportunity to get long at the still unformed  'x'.  ______ UPDATE (3:54 a.m. EDT):  The futures are up nearly $10 at the moment, and for once bullion will not have to do any heavy lifting, since explosive potential in crude oil is going to pull gold and silver higher no matter what the bad guys have in mind.  Since the rally almost precisely matched the hypothetical pattern shown in the chart (see inset), I'll establish a two-contract position for your guidance. Entry would have come at 1408.50, based on A=1402.20, B=1412.00 (as shown), and C=1406.10.  Use a 1415.90 target for one of the contracts and let the other ride with a very generous stop. ______ UPDATE (2:51 p.m. EDT):  The futures handily exceeded the target, giving us a paper profit that will reduce to 1401.20 the cost basis of the contract  we still hold. For now, use a 1402.10 stop-loss, raising it to 1410.60 if and when the futures hit the next Hidden Pivot objective, 1426.00.

The rally lost momentum by mid-session yesterday, although stocks did not subsequently fall apart.  Night owls can risk three ticks bottom-fishing the 1259.50 target shown, but please note that the too-obvious structural low at 1257.75 makes this gambit less than ideal.  ________ UPDATE (8:08 p.m. EDT):  Just as we were about to publish this tout, the lunatic fringe goosed the futures to a so-far high at 1272.50 -- equal to point 'C' of the pattern shown in the chart. Assuming the hysteria is driven by good news concerning Japan that has not yet hit the tape, and that the rally continues, we should look for it to continue to at least 1278.25, a Hidden Pivot resistance that can be shorted with a 1.00-point stop-loss.  Camouflaged "longs" can also be attempted on a marginal breakout above 1272.50.  _______ FURTHER UPDATE (3:44 a.m. EDT):  Driven by short-squeeze hysteria tonight, the futures have shredded every minor Hidden Pivot on the intraday charts, even as they proved too gutless thus far to take out Tuesday's 1283.50 high. Let's try shorting again at 1294.75, stop 1295.25, but if the trade fails, keep trying using targets from the hourly chart.

The U.S. stock market's strong upward bias at this moment is the sickest, stupidest, most recklessly suicidal behavior I have witnessed in nearly 40 years of trading.   Odds of a nuclear catastrophe are mounting by the hour, and if that weren't worrisome enough, the world has backed Libya's paranoid dictator into a corner.  And yet, here is the E-Mini Dow trading as much as 110 points higher late Thursday night. Any speculator who goes home long stocks or short oil on Friday is going to get his head handed to him on Monday.  Rick's Picks subscribers should look to fade this evening's hubris on Friday in any way possible -- and damn-the-torpedoes.

[With debt spinning wildly out of control and the States threatening to revolt against the tyranny of Washington, we asked some frequent contributors to the Rick’s Picks forum how they thought the economy would look five years from now.  In the essay below, Tom Waldenfels asserts that it wouldn’t take as much as a “black swan” event to tip an already destabilized economic system into chaos. In the meatime. he finds it baffling that so many people evidently cannot see this disaster coming. RA] A smoldering ruin. What’s that you say?  Well, Rick asked me to give my outlook for how the world might look in five years from an economic standpoint.   That’s easy.  A smoldering ruin.  I mean that figuratively … I think.  The whole world?  Maybe, but I’m thinking primarily of the U.S., Europe, and Japan. Look, the readers of these missives are very smart and well-informed, so I don’t feel the need to catalog all the problems we face. You know what they are.  The biggest are the ocean of debt we’re floating on that has gone bad or is going bad; the extreme amounts of leverage still in the system; the mountain of derivative contracts extant that can’t possible be honored when the SHTF (Think AIG); a corrupt and insane government that does precisely the wrong things; and the uberputzen at the Fed, who are hell bent on destroying the clownbuck.  The problem underlying all of this?  Phony money.  They’ve managed to maintain the fiat money scam for decades now, and what a party we’ve had.  But when the money goes bad, look out.  And it’s starting to go bad in a big way. My view, for what it’s worth, is that we’re looking at unimaginable systemic disorder once the patches being administered by the Fed,

We hold 400 shares purchased overnight Tuesday at 50.40. Since the stock could fall to as low as 48.10 if it breaks down here, set a stop-loss at 49.94.  You should plan on re-buying at 48.15, no stop, good-till-canceled.  I've included a chart that shows night-session price bars on the 5-minute chart.  ______ UPDATE (11:56 a.m EDT): Raise the stop-loss to 50.18.