January 2012

With trading in 2012 having begun, the futures are up nearly $14.  However, this hasn't recouped losses sustained when they dove late in Friday's session, let alone created a bullish impulse leg on the hourly chart. I am wary of a bull trap under the circumstances, but putting aside my gut feeling, the surge will need to go a further $15, surpassing a small peak at 1594.40 recorded last Wednesday, to demonstrate buyers' resolve.  The bigger picture would still be bearish, however, since the rally from Thursday's low at 1523.90 is taking place in the wake of a breach of an important midpoint support at 1544.70 associated with a correction target (broached here earlier) at 1445.70.  Camouflageurs working the night shift should take note of the fact that a b-c pullback from anywhere between 1594.50 and 1601.50 could provide excellent cover for initiating a long position with relatively little stress.

It has been a little more than three days since the futures last traded -- about as long an interval as I might have thought permissible, legally speaking. When the E-Mini's come back to life, however, it seems doubtful they'll continue Friday's sauntering pace. More likely is that they will leap up or down, impelled by some news headline.  Trouble is, the dim bulbs who bring us the news have not yet sprung back to life themselves -- are more likely nursing hangovers or gazing at their own navels -- and so the top stories of the hour are focused on sordid local or national events incapable of moving markets: i.e., the Iowa caucus, and the arrest of a suspect in the L.A. arsons.  Under the circumstances, the best I can do with this vehicle, analytically speaking, is to pick up with where things left off on Friday. That would imply immediate upside potential to as high as 1284.50, subject to midpoint resistance at 1263.75.  Both of these Hidden Pivots are shown in the chart, and if you determine to use either of them bullishly or bearishly, you'll be calling the shots, since I cannot foresee how DaBoyz will manipulate the New Year's opening hour. _______ UPDATE (10:21 a.m. EST): DaScumbags' algorithms have short-squeezed the opening for 250 Dow points, locking out all traders except those who were foolhardy enough to be on board at Friday's close. The so-far high has fallen a few points short of the 1284.50 target, which remains valid.

I received the following from an old and dear friend from the hedge fund world who will be spending the next few New Years in a federal prison -- penance for his having promiscuously mingled personal and business funds and overstated his profits. Happy New Year to all. May your  health be better than you have any right to expect. May you be treated with courtesy frequently. May the young of the species defer from their iPhones to nod in your direction. May you always have two and even three ply unscented toilet paper. May you lose all your cynicism and disgust at the present state of politics (uh, this IS a real wish). And, may you not show your age by grumbling at the news!

Happy New Year! Securities markets will be closed on Monday, a synthetic holiday created to avert, heaven forbid, a two-day New Year's weekend.  Touts for Tuesday will be out Monday night, when I will also announce scholarship winners for the January Hidden Pivot Webinar.

As promised, here are my predictions for 2012. So many things could go horribly wrong that it's probably best that we simply try to live our lives to the fullest and not worry too much about the headlines.  Before I start listing away then, let me wish you all a happy New Year. Whatever the news brings in 2012, may you and yours enjoy good health, happiness and inner peace. Here they are: *  After taking a strong lead in the primaries, Ron Paul will be bludgeoned into defeat by the mainstream news media and its Evil Masters. The Establishment has far too much to lose if Paul becomes President, and it will fight him openly and shamelessly with every resource at its command. *  European borrowing rates will threaten to explode above 7%, pushing the PIIGS into bankruptcy (although it won't be called that). The euro's fall will be arrested at $1.08 nonetheless, buttressed by a Rube Goldberg "restructuring" plan that, fortunately for the global financial system, no one will be able to understand. *  'Mother' nature will continue to rampage with yet more earthquakes in places where earthquakes don't usually happen. *  Yields on U.S. Treasury Bonds will fall to 2% simply because there aren't enough mattresses to hold the world's money. *  Despite its intrinsic worthlessness, the U.S. dollar will soar, pushing the Dollar Index above 90. *  Toward the end of the year, deflation in the U.S. housing market will enter its climactic stage. Before the washout ends in late 2013, homes prices will have fallen 80% from their 2007 peaks. *  Gold will stage a powerful rally after bottoming at $1445 in January, but the buying spree will fall well short of $2000. Silver will fare relatively worse, falling to $18.35 before finding traction and