July 2011

Because there is evidently still some chat-room interest in this stock, I took a look at a bigger-picture chart to see what's going on.  Lo, the 2.75 bottom recorded just before the rumor mill shifted into high gear early in May fell just two ticks from a major Hidden Pivot 'midpoint' support. Since I don't have a crystal ball, I won't speculate on whether that support will contain the current dive. However, I can assure you that if the pivot is decisively breached, Kodak is headed down to at least 1.47, the midpoint's 'D' sibling. It's all in the chart, as you can see for yourself.

Gold and silver showed some spunk yesterday, extending for a third day their steepest rally in nearly ten weeks.  Relative to Friday’s gut-churning lows, August Gold was up $40 yesterday while July Silver has risen $2.22.  The latter was the better performer percentage-wise, gaining 6.6% compared to gold’s still-impressive 2.7%.  Does this portend an end, at last, to the tiresome correction from early May’s summit? We’ll likely know soon, since both metals are an easy rally’s distance from achieving crucial benchmarks identified by Hidden Pivot analysis. (Want the precise, proprietary numbers? Click here for a free trial-subscription, including access to a chat room that hums with trading activity 24/7.)  If our benchmarks are hit, it would generate bullish “impulse legs” on the respective hourly charts of both gold and silver, increasing the likelihood of a sustained move higher. We should note, however, that false starts have plagued bullion since they put in correction lows, respectively, on May 5 and May 12. Those lows came within a whisker of “midpoint pivots” we’d flagged here in timely fashion.  A basic tenet of the Hidden Pivot Method is that corrections in bull markets typically fail to reach the ‘d’ targets of abcd downtrends (see chart above). Bullion’s price action since early May has precisely conformed to this rule, although the lengthiness of the correction is starting to induce the sort of tedium that can send futures quotes soaring or plummeting on a given day for no particular reason. One might infer that bullion traders have grown so bored and frustrated that they will do the kinds of crazy things we all do when tedium tries to wriggle through the narrows of life’s Bollinger Bands. However, there’s a problem with that theory, since it is not humans who are doing most of the trading,

No change. Silver continues to hang on for dear life, and it would take quite an upthrust to ameliorate its immediate distress. Specifically, the futures would need to pop above prior peaks at 36.770 and  37.860 without taking a breather to turn the daily chart bullish. Alternatively, the big picture would take a significant turn for the worse on a printdown to 31.775 — $1.635 beneath the June 27 low. That would create a new, bearish impulse leg on the daily chart and set up a test of a major midpoint support at 31.205.

A Hidden Pivot at 1382.25 flagged here earlier is equivalent to the one at 13182 that I've proffered for the Dow.  Like the Dow, the futures have easily surmounted, and now closed above, a key midpoint resistance, 1317.25. However, within the next 2-3 days, buyers will need to handle two 'external' peaks that lie respectively at 1342.50 (May  31) and 1352.75 (May 11) to ensure that the thrust to 1382.25 is swift and easy.

Share valuations ahead of Dot-Com Bust II have been crazy-stupid, demonstrating yet again, to borrow Mencken’s line, that no firm in the IPO business will ever go broke underestimating the intelligence of the American investor.  Witness the huge markups paid last May for IPO shares of the still profit-less LinkedIn, a company that purports to network business contacts between individual users. Instead, and as far as we can surmise, LinkedIn has grown its subscriber base using viral techniques, mailing out link “requests” to people like your editor, who thus far has failed to throttle such e-mails. The result is that, although LinkedIn has collected a zillion names, e-mail addresses and personal data from registrants, the registrants themselves are only tenuously tied, a vast nervous system unconnected to a brain.  Of course, this didn’t stop investors from trampling each other to pay ridiculous prices for LNKD stock when the company went public last May.  Shares expected to fetch around $35 soared to $122.70 on opening day and currently trade for around $94. This is notwithstanding the fact that LinkedIn, like Facebook, has yet to develop a revenue model even remotely capable of vindicating the outlandish multiples speculators seem willing to pay for an equity stake. Meanwhile, even as the thimble-riggers and confidence men at Goldman and other Wall Street firms salivate over the prospect of retailing insider shares of Facebook to the rubes at superheated premiums, Google is threatening to eat Facebook’s lunch and perhaps make Mark Zuckerberg’s Great New Idea the next Internet has-been. How scared is Facebook?  Some bloggers have accused the company of hiring moles to churn out hostile comments on Google+, a new social networking service that has generated such hot demand that Google had to suspend invitations to try the beta version.  And the reviewer at

Not only did Friday's short-squeeze rally close above an important midpoint resistance at 12523 identified here earlier, it also exceeded a prior peak from June 1, refreshing the bullish impulse on the daily chart. Taken together, these accomplishments will shorten the odds of an eventual move to a 13182 target previously noted.  Also, because three more 'external' peaks lie within 200 points of here, any strong rally as the new week gets under way could make the move to 13182 all but unstoppable.

As of around 3:40 p.m EDT Monday, holiday trading has generated a bullish impulse leg on August Gold's hourly chart. However, as I've noted in today's tout, it will take a quite a bit more than that for bulls to gain traction against the corrective downtrend from early May's highs.

Friday's slide to 1478.30 was telegraphed by the failure of a key support I'd noted at 1496.90.  The low I predicted lay at 1479.10, so the forecast missed by just 80 cents. Does the overshoot portend still more weakness over the near term?  Not necessarily, since it was so small. However, neither is it a bullish sign, and the futures would need in any event to thrust above 1526.50 within the next couple of days for bulls to regain the upper hand.  Otherwise, minimum downside to at least 1446.90 looms for the near-term, with a presumably unsuccessful test of May's lows in the 1470s in the interim.

Today's Silver tout includes a chart intended to prepare bulls for weakness over the near term that could push the July contract as low as 31.205.  That's a midpoint Hidden Pivot, and it looks pretty compelling as displayed.