November 2012

As noted in today's Google tout, I'll be trying to get the range and the rhythm of the stock in the days and weeks ahead so that we can play with it intraday.  I've never traded weekly options myself, but they would seem to offer a promising vehicle for taming risk.  Also, because Google's highs and lows have a curious affinity for whole numbers, that could make things more interesting for us.

Let us say a prayer for Best Buy as the company attempts a daring overhaul. There is surprisingly good news on this front, and we’ll get to it in a moment. Suffice it to say, the stakes are extremely high, since failure could mean that ten years from now, quite a few of the things Americans buy other than food will necessarily come from Walmart, Costco and Amazon.  For USA shoppers used to limitless variety, this would be Bedford Falls without George Bailey. Bleak as that may sound, it hardly exaggerates the possible endgame of a trend that has seen vacated storefronts spread like a pox across America. Big-box operators in particular have been failing at an alarming rate, leaving gaping holes in strip malls and once-thriving city streets. The Great Indoors, Hollywood Video, Linens ’n Things,  K.B. Toys, Borders, Montgomery Ward and Woolworth’s were all household names that have vanished from the retail landscape if not yet from memory. Competition in the consumer electronics business in particular has been brutal, laying waste not only to CompUSA and Circuit City in recent years, but, before them, to Tweeter, Federated, The Wiz, Crazy Eddie, Incredible Universe, Musicland, The Good Guys and Computer City.  This is capitalism’s “creative destruction” at its most devastating, and it could continue to ravage the retail scene for years to come.  Just ponder the list of big-box survivors whose days could be numbered: Sears, Barnes & Noble, Bed Bath &  Beyond, JC Penney, Macy’s, Nordstrom, Office Depot, Office Max, Staples, Toys R Us, Blockbuster Video.  Sears, which has been dying since the 1980s, few will miss. But if two far better emporiums, Macy’s and Nordstrom, fail, we’ll all be buying pants the same way we now buy shirts: "One-size-fits-all-orangutans". The Good News… Now for the good news:

Although the post-Halloween rally failed by inches to surpass early August's 153^05 peak, it handily surpassed several others, attesting to the robust health of the long-term bull market. The correction begun in June could nonetheless continue for a while longer, but we should continue in any case to watch for the bull's resurgence, which would be signaled most obviously by a two-day close above the p midpoint of the pattern shown.  (Please note that that p could migrate lower if the futures dip beneath the current point C at 149^23.)

We recently logged a theoretical gain of $3000 in this stock by catching a tradable low very precisely and riding it until an exit was signaled using an impulse-leg stop-loss. Let's try to do it again using the pattern shown. I'll signal when to buy if an enticing entry opportunity presents itself following an impulsive thrust on the hourly chart.  I prefer trading shares rather than options in this case because spread-trading puts and calls on a $600 stock is much hairier than simply buying the stock outright with a penny-ante stop-loss.  If you want to receive trading alerts in real time, be sure to check 'E-Mail Notifications' on your 'My Account' page.  It’s easier than you might imagine to out-forecast gurus who do it for a living. Click here for a free trial subscription that can start you on the road to making your own trading and investment decisions.

The chart shows what the futures would have to do to turn currently "dueling" impulse legs in bulls' favor.  It is the equivalent of an uncorrected DJIA rally of about 200 points, so buyers will have their work cut out for them, even with seasonality heavily in their favor (December is the second most bullish month of the year, historically speaking.) Meanwhile, the best opportunity to bottom-fish a pullback would be on a drop to the 'p' midpoint shown. Please note that its location could change if a higher point 'C' is created.

Apple shares recovered some of their old mojo with last week’s 10% rally, lending buoyancy to a market that was already pumped full of helium for Wall Street’s traditional observance of the Thanksgiving holiday. Nearly all of the stock’s gains came on a gap-up opening last Monday, but it is important to note that AAPL held onto those gains, consolidating over several days for, presumably, yet another burst in the week ahead.  Our immediate target is 580.92, which would represent a gain of $10 over Friday’s closing price. However, if buyers are able to push even slightly past that price target, they’d become an odds-on bet to continue to the next, at least, at 607.25. Both numbers are derived from our proprietary method, Hidden Pivot Analysis, and they leave us somewhat upbeat about the holiday shopping season.  Although we’re not expecting any sales records to be broken, business should be upbeat if Apple and a couple of other retail bellwethers merely maintain the status quo. One of those bellwethers is Fedex, a stock we watch closely for clues about the actual state of the economy. Five weeks ago, FDX’s charts looked so strong that we inferred that the U.S. would finish the year on a strong upswing.  However, in the weeks since, FDX has receded somewhat, suggesting that business will continue at a moderate pace, at least through December. Bullish on Facebook In the meantime, we hold bullish tracking positions in Google (just exited) and Facebook.  The former was initiated on a purely technical signal -- a “Hidden Pivot” correction target that worked very precisely.  In Facebook, the recommendation was based not on technical factors alone, but also on a gut feeling that the company has finally come up with a great new way to make money. We had been

I recently attended the Hard Asset Conference in San Francisco.  The meeting concluded with a panel discussion that featured Rick Rule, Paul Van Eeden, Ian McAvity, James Dines, Jay Taylor and Adrian Day.  Two of them named as their top mining-sector pick the same company, a firm that is focused on prospect generation and the creation and acquistion of royalties and investments.  For the identity of this company, along with some timely Hidden Pivot analysis of its shares, drop by the chat room and check out my posts from November 26, starting at 17:57. (Don't subscribe? Click here for a free trial that will allow you to join the chat room discussion for a week and to access trading 'touts' behind the subscriber wall.) I'll also mention a James Dines recommendation that surprised me: Bank of America (BAC).  I rolled my eyes when he mentioned this one, but when I looked at BAC's daily chart for the first time in months, I realized that Dines is clearly onto something. BAC is currently trading for around 9.84, but it will be an odds-on bet to reach 15.90 once it has exceeded a Hidden Pivot 'midpoint resistance' at 11.31.

[Following is the video and an edited transcript of an interview Rick did recently with the BBC’s Max Keiser. The discussion ranged from Apple’s plunging share price, to hyperinflation vs. deflation, to fraud in the international banking system, to Switzerland’s untraditional embrace of currency devaluations to cheapen its exports.] Max Keiser: Hi.  I’m Max Keiser.  Welcome to “On the Edge.”  It’s time now to go to Boulder, CO to speak with Rick Ackerman of rickackerman.com.  Rick, welcome back to “On the Edge.” Rick Ackerman: Thanks, Max. Max: Rick Ackerman, Barack Obama has been re-elected.  What impact do you expect on equities and commodity markets going forward, if any? Rick: I think they’re going lower.  But I never saw Romney as the answer, since our economic problems are bigger than politics.  I still see a deflationary end.  We’ve had quite a debate over the inflation/deflation conundrum. My take is that, at some point, we’ll have a hyperinflationary eruption, but in the end, assets all will be deflated. The stock market could enjoy a brief resurgence in the meantime.  Stocks are coming off lows this morning at what I call “midpoint pivots.”  They’ve all held.  But if they should slip next week, the market could go a lot lower. Max: It’s confusing for most people, because you have economists talking about deflation.  At the same time, you have news reports of thieves stealing roofs off of churches to sell the copper or to sell various metal components, drain pipes, et cetera, because the price of commodities are going so high, which of course sounds like inflation.  How do those two reconcile? Rick: It’s like trying to square the circle.  At a theoretical level, I don’t have any problem with the hyperinflation argument.  There’s a monetary blowout going on globally now, and eventually

[The following turned up in the Rick's Picks forum. However, it was unrelated to the discussion concerning White Gates Farm, and so I am reposting it below: 1) to give it greater visibility; and 2) because I share the author's skepticism that the gold price will achieve the stratospheric heights that Jim Sinclair has predicted (even if I am not so confident that government will not someday confiscate bullion or curtail its free exchange).  The author, who goes by the handle 'Doc,' blogs at silverdoctors.com RA] Well, Thanksgiving is over and so if I may I would like to begin a new conversation on the issue of Gold demand and Central Banks. Jim Sinclair has recently stated in response to one of his readers that Gold confiscation is not an issue of concern; that it is an unlikely scenario. He has strong views on the subject. More specifically, he wrote: “There was much to be gained by gold confiscation in the 1930s because we were on a gold standard. Gold in the 1930s was the only instrument of QE. It is not now nor will it be again in the future. There is no reason except some sort of fear of revenge to consider confiscation of gold, gold shares or the gold ETFs now. Those that worry so much about this do not really understand what gold was under a gold standard”. I beg to differ. I think Jim’s argument is not well thought out as he fails to consider the varied number of reasons for Central Bank accumulations that we are now witnessing across the globe. So I have penned a response to him that I will repost here at Ricks Picks for the benefit of others who may want to weigh in with their own views on this