June 2012

Nearing week's end, with an angst-ridden Eurosummit and a momentous Supreme Court decision on Obamacare looming, some might expect the markets to be pretty wild. If so, it'll be the same the usual bunch of OPM-mongering idiots flailing around for no good reason -- other than that there is Big News on the tape.  Trading implications aside, we can all breathe a sigh of relief if the entire, putrid health care bill is flushed down the toilet.  As for Europe, it is inconceivable that anything will come from the summit that is apt to surprise anyone (other than the clowns, cheats and charlatans who move the markets these days).

Those who have witnessed the epic fire in Colorado Springs’ Waldo Canyon say it looks like something out of a disaster films. “It’s  surreal,” said Gov. John Hickenlooper in an interview at-the-scene with NBC News. Behind him, monstrous flames leaped skyward, spreading through the hills at speeds that threatened to overwhelm firefighting crews at any moment. They are tasked with triaging rescue efforts, saving homes that look savable while letting others too far gone burn to the ground. Winds as high as 65 mph made their success unpredictable, and so far the fire is only 5% contained. Some who watched from lower elevations could see their homes burning, while others could only speculate. And pray.  So far, 32,000 people have been evacuated, including students and faculty at the Air Force Academy. Some popular tourist attractions are gone, including the Flying W Ranch, where millions of visitors, including your editor, enjoyed chuckwagon dinners and cowboy music since the early 1950s. Here in Boulder, a hundred miles to the north, the so-called Flagstaff fire threatened to inundate houses and forested hillsides, although only 28 dwellings are currently under evacuation orders. Pre-evacuation notices have gone out to hundreds more residents who will at least have time to pack up essentials and valuables if their worst fears should materialize. Thundershowers and light rain on Wednesday afternoon raised the humidity slightly, but they were accompanied by lightning that sparked some small fires. Fortunately, they were quickly extinguished, but winds were expected to persist and the sun to shine on Thursday. With record-breaking 100-degree heat as a backdrop and more of the same on the way, firefighters will have their work cut out for them as the weekend approaches. Meanwhile, heroic efforts were starting to pay off in the battle to contain the High Park fire

Even in bear markets there will be buying opportunities. This is so not only because bear markets produce spectacularly tradable rallies, but because they all end at some point. It was with this in mind that we pored over the charts of, for one, Silver Wheaton, a stock for which I’d written an epitaph of sorts in a recent Rick’s Picks tout. Lo, amidst a long dirge that by now will have frustrated many bulls, there is a buying opportunity taking shape just below current levels. Similarly, although the Aussie dollar looks bearish at the moment, 97 cents on the U.S. dollar may be as low as it wants to go. Check out this recording if you’re interested in either -- or in Comex Gold, which we looked at in exhaustive detail.

Last September, with Netflix shares in the $170s, down from a hysteria-driven blowoff to $305, I offered a commentary under the headline Netflix Plummets, and for Good Reason.  With the stock trading 40% off its highs at the time, I didn't see much value in it. I still don't -- and that's with NFLX currently hovering in the mid-$60s. Recall that the company was perceived as the hottest new idea in the business world just a year ago. Now it is just another dot-com has-been, trying to sell streaming movies at a time when big competitors like Amazon and Comcast have begun giving them away.  Netflix is headed to zero, isn't it obvious? Perhaps there'll be a lesson in it for all of the miserable dolts who still believe that Facebook shares offer good value.  From a technical standpoint, Netflix stock could fall to minus $46. Since we know that's impossible, I've settled on zero to be more realistic. Click here to sample Rick's Picks detailed trading 'touts' and the  chat room free for a week.

July Silver continues to hang on for dear life, having come within a single penny of the watershed low at 26.500 recorded on the penultimate trading say of 2011. If and when it is breached -- and it appears to be only a matter of time before this occurs -- the 25.230 'D' target of the pattern shown would become an odds-on bet.

The futures were being manipulated lower in after-hours trading, creating a duel on the lesser charts but also depleting the ranks of sellers in order to set up a potential short squeeze. Bulls hold a small edge at the moment, but it's not enough to offer a compelling trade, even one initiated with camouflage. Although a 1296.00 downside target noted here earlier remains valid in theory, it has been too long in coming to be worth much.  Looking at a bigger picture, as noted here earlier, a decisive penetration of that support would likely consign the futures to a test of support near 1260, where the E-Mini S&P made a technically significant low in early June.

Fires have erupted much closer to home this afternoon, whipped by gusts that scattered porch furniture onto the yard. Our neighborhood is all but unburnable because the public spaces are mostly ponds, shrubs and some strategically placed shade trees but no forests.  Unfortunately, many friends live in nearby canyons where fires seem to be everywhere. I will post touts for Wednesday later tonight, after I've checked in with the local volunteer corps.

So engrossed were we in dissing Facebook’s IPO that we almost failed to notice that the stock had recouped nearly 40 percent of the losses it suffered after mid-May’s abortive IPO.  FB opened that day at $42 and shot up to $45 momentarily before embarking on a three-week dirge down to 25.52.  That low was hit on June 6, but the shares have since perked up a tad, hitting a recovery high of 33.45 last week.  On Wall Street, where too much of a bad thing can hold perverse enticement for opportunity-starved investors, perhaps all that was needed to attract a new wave of buyers was a little bad publicity. That, the company has gottern in spades.  First came the fallout from the IPO itself.  Investors are claiming $500 million in losses caused by glitches in Nasdaq’s order system. Some who bought the stock that day may wish they hadn’t, but it’ll be interesting to see whether the size of their claims shrinks or grows as Facebook creeps back toward its IPO price, as seems possible. Other, recent news stories have reflected poorly on Facebook’s business model, which entails gathering as much intelligence as it can on 900 million users and selling said data to advertisers. Nothing wrong with that, of course -- asssuming that the fact-gathering is on the up-and-up and the information is not abused. Unfortunately, Facebook has flunked on both counts, and badly. A couple of weeks ago, there was the widely circulated story about a web surfer, Nick Bergus, who stumbled on a 55-gallon vat of sexual lubricant for sale on Amazon.  Bergus posted a link to the item’s Amazon Facebook page and jokingly inserted the caption: “For Valentine’s Day. And every day. For the rest of your life.”  Amazon took Bergus’s “endorsement” and ran with

Here's a story out on CNN and elsewhere this morning that dovetails perfectly with all that we might fear about Facebook: "Following a period of freak-out on the Internet on Monday, Facebook appears to have pulled a controversial feature that let the social network's users get a digital list of other Facebookers nearby. The 'Find Friends Nearby' feature was not accessible in a CNN test on Tuesday morning, and other media outlets, including CNET, reported that Facebook had pulled the service." For the full story, click here.