August 2012

Because the 150^05 midpoint support of the bearish pattern shown has been decisively breached, we should infer that more weakness impends, presumably to the 148^06 (148-6/32) D target. That Hidden Pivot lies within a thicket of structural support from lows made in June, and although it's possible their effect on the futures will overshadow our pivot, we can still try bottom-fishing there.  Accordingly, once this vehicle has come down to perhaps 148^09,  I'll suggest taking the entry trigger of the first northbound abc on the 5-minute chart.  [You can learn to trade via 'camouflage' yourself, a technique that will enable you to reduce the entry risk of a trade to a low threshold that you may not have believed possible. Click here for details concerning the upcoming Hidden Pivot Webinar in September (and a $50 discount coupon if you register now].

The futures slithered somewhat closer to a 1404.00 target, recording an intraday high at 1395.75.  Although the target remains valid, it has become too boring at this point to care about. Another at 1409.00 now looks downright tradable, however, and so I'll suggest shorting there either via camouflage or with a stop-loss no wider that 1410.25.  The chart shows how compelling this Hidden Pivot is, but also how it too, like 1404.00, would start to lose its appeal if the futures take too long getting there. For that reason, I am making this trade recommendation good for today only. If 1409.00 is achieved it would imply an approximately 150-point rally in the Dow.

[From sun-drenched Spain, here’s a dispatch from ‘Buster,’ an occasional contributor to the Rick’s Picks forum.  Much as Buster loves the warm climate of Spain, the economic and political climate have grown so frigid that he’s thinking about moving to…Iceland. The country is becoming a very appealing place to live, says Buster, because it has taken to heart lessons learned from the banking collapse of 2008. RA] Sunny Spain…or Iceland? Many may mistakenly think of Spain as a comparatively less developed nation, since it emerged from the Franco era only relatively recently. However, Spain could actually be seen as a more advanced model of where we are all heading. The story goes that, as part of Spain’s acceptance into the world order of things, her administrators spent some time visiting and learning from the dark tax overlords of various countries to get up to speed in the modern methods available for wealth extraction and bureaucratic empire building. Today, many of the consequences of their diligent hard work are abundantly clear. A quick scan of the news over the past year will supply a list of corruption allegations against many of the past administrators, with the burdens that they lay still continuing to stifle prosperity, and thousands losing their homes to the banks, and record numbers unable to pay their property taxes. Further, a visit to Spain may seem to some like entering a cross between the Third Reich and the People’s Republic of China, since nearly all activity will involve some bureaucrat demanding the equivalent of  “Papiere, bitte!” with a quick “No possible” or worse still, a fine or penalty when one is unable to supply the correct one;  plus seeing so many Spanish shops being turned into a Chinese bazaar. This is due to Spain’s government having given Chinese

Treasury bond futures are targeting an important support level at a time when many traders are watching for the final top of the long bull market.  The sharp bond selloff of July 27 completed an impressive impulse wave down from an all-time high, and subsequent trading gives us a 'D' target of 148^6.  Important prior lows in the range from 148 down to 146 constitute a support zone whose breach might signal that the bull-market top is in.  Traders expecting the support to hold can look to get long near the 'D' target or to buy the bond ETF with ticker TLT around the 125.49 level.  (Posted by Doug “harry” McLagan)

The gold price has spent two months within a $111 range and is positioned for a major impulse one way or the other.  The large bearish pattern shown on the attached chart must be taken seriously so long as the active December contract remains below 1646.40, which is the 'C' point of the pattern and the top of the aforementioned $111 range.  But a more recent bullish pattern is notable for having impulsed above a significant external prior high, as shown by the dotted line to the left of the green 'B' point on the chart.  We usually look for camouflage on lower timeframes, but this pattern is a classic example of it.  The pattern is active and is unfolding according to plan thus far. If the futures reach the bullish 'D' target of 1652.80, the large bearish pattern will be cancelled and the probability will increase that the correction from last year's all-time high has run its course.  Traders choosing to short the bullish midpoint at 1619.60 should place stops no lower than 1620.30.  (Posted by Doug “harry” McLagan) _______ UPDATE (12:55 p.m.):  The futures approached the midpoint of 1619.60 to within twelve ticks, and the chart now features three exposed prior highs ranging from 1618.40 to 1618.90.  The pivot is not "hidden" at this point and a tightly-stopped short sale would be very risky. _______ FURTHER UPDATE (2:05 p.m., August 7):  Risk-takers would have been rewarded for shorting the midpoint pivot after all, as the futures reversed at 1620.00 and declined more than five dollars before heading back up to 1621.30.

Index futures opened with little excitement Sunday night, to put it mildly.  Absent any titillating news, expect the week to begin with further consolidation of last week's rally in shares -- and more sloppy action in bullion.

The Dollar Index opened weak Sunday night, presumably for all of the usual wrong reasons, including perceptions that Europe's central bank is ready to do "whatever it takes" to keep the region from slipping into an economic depression.  Because the 82.56 midpoint support of the pattern shown has been decisively exceeded, we should infer that the weakness will continue to its 'D' sibling, 81.61.

Friday's wilding spree achieved 30 of the 40 points I'd projected, leaving an as-yet-unfulfilled rally target at 1404.00. The schizophrenic rampage has turned suspiciously quiet Sunday night, with index futures trading a hair from their most recent settlement price. Under the circumstances, I'll leave it to the discretion of night owls and camouflageurs to find an entry hook amidst the flux of ho-hum and hi-ho.

Greg Hunter: Hello. I’m Greg Hunter. Thank you for joining us today on USAWatchdog.com. The guest -- a bit of a contrarian -- is Rick Ackerman. He hails from the website Rick’s Picks. He’s a professional trader. Rick Ackerman, thank you for joining us here on USAWatchdog.com. Rick Ackerman: Thanks for inviting me, Greg. Greg: Rick, you’re a bit of a contrarian, as I was saying. You think the dollar could get pretty strong right in here. Tell us about your trades and why you think that way. Rick: I like to think of myself as being on the respectable edge of the lunatic fringe. As far as the dollar is concerned, I’ve been pretty bullish for a while, with a Dollar Index target in the mid 90s. We’re down in the low 80s now, so my projection allows for quite a rally. But I’m not fundamentally bullish on the dollar -- it is ultimately garbage, since every dollar is backed by debt, not metal. For now, though, the world’s hot money is clamoring for the supposed safety of the dollar. It certainly seems safer than European paper at this point. So the dollar is enjoying its status as the trader’s currency of choice. Greg: It looks like it’s going to be some sort of, other people probably feel the same way. But where do you go if you have a meltdown? You’re saying they’re going to run into the dollar. Rick: Exactly. The thinking is that if the financial system is hit with a real crisis, the euro is going to collapse before the dollar does. Although I tend to agree with that, I think that the time differential between the two collapses could be very short. Once the euro goes down, all who sought safety in dollars are