December 2012

It's bullish that the futures reversed strongly enough yesterday to generate a bullish impulse leg on the hourly chart without have reached the 32.115 downside target flagged here. Moreover, the rally is just shy of triggering a buy signal at 33.180. If that price is hit today, I'd suggest using an ABCD pattern on the one-minute chart to get aboard via camouflage.  This set-up looks quite promising in that it seems likely to lift the nimble camouflageur at least to the 'p' midpoint of the traded pattern.  Night owls will need to be alert, however, since the opportunity could come before morning. _______ UPDATE (2:20 a.m. EST): The futures first touched 33.180 exactly two hours and 42 minutes ago, but they are only now generating the first tradable 'camouflage' pattern with the potential to conform to our rules. On the three-minute chart, here are the coordinates you might use to get long: A=33.110 at 2:03 a.m.; B=33.150 at 2:12 a.m.; and C=?  So far, at exactly 2:21:46, C is a double-bar low at 33.120, making the pattern untradable if played strictly by-the-book.  If you can follow this update up to this point, you don't need me to tell you what to do. _______ FURTHER UPDATE (2:26 a.m. EST): The futures seem heavy, and not just a little nasty. Under the circumstances, you should initiate the trade using camouflage only if all of our rules are perfectly met. As of 2:51 a.m., that would imply a rally on the 3-minute that is unpaused between 31.150 and 33.205.  These prices points correspond to 'external' peaks. Click here if you want to learn more about ‘camouflage’ trading, a technique developed to reduce entry risk very significantly.

Yesterday's deftly engineered, whoopee-cushion short-squeeze will put a floor under the stock, at least for a while, but it won't change the fact that the resulting swoon breached a 521.07 midpoint support associated with a downside target at 447.55. That will be our minimum downside price objective as long as the point 'C' high of the pattern, 594.59, endures. More immediately, bulls will strengthen their hand for the short term if they can push today above 555.45, an external peak highlighted in the accompanying chart. _______ UPDATE (12:36 a.m. EST):  This the bulls failed to do, since AAPL went no higher than 555.20 before collapsing anew. _______ UPDATE (December 11, 2:01 a.m. EST):  Since Apple is overdue for a bounce, I'll suggest using the two labeled peaks to extrapolate a low-risk buy signal for camouflage entry.  Ideally, the B-C pullback would begin from a high that exceeds 534.67 by no more than a few cents. For your further guidance, I've sketched this hypothetically on the new chart._______ UPDATE (December 14, 2:57 a.m. EST): The overdue bounce we were expecting produced a B-grade trading opportunity with an A-B impulse leg that was stronger, and therefore more enticing to the herd, than we might have preferred.  I've refreshed the chart to show where entry at 'x' could have been attempted without much subsequent stress.

If you’re a market-watcher who has grown as bored as we have with this month's tedious ups-and-downs, here’s a black magic forecast for the Dow Industrials that you can track in real time to help make the time pass. Besides the entertainment value of watching this prediction play out, you’ll also be able to trade it if you desire. The predicted rally is nothing spectacular -- just a modest, 185.58-point upthrust in the Indoos.  How could we be so brashly certain that the impending surge will be exactly 185.58 points?  Hidden Pivot Analysis, is how. That’s our propietary technical method, and if you use it to analyze the chart below, the price pattern on display looks too pretty to fail, even by an inch. We employ a simple ABCD wave form to predict these moves, and although this pattern in particular looks somewhat gnarly, it becomes a perfect “ten” when subjected to just a few simple rules. Okay, it's at least conceivable the rally will miss our 13259.62 target by a hair. Even so, we can all but guarantee that the target will be reached, and without an intervening correction. Both of these outcomes are confidently predictable because of the way in which yesterday’s surge moved so easily through 13,012, a  “Hidden Pivot midpoint.”  Notice how the steep, uptrending bar circled in red smashed through this price point without pause.  According to our proprietary technical method, this kind of price action at a Hidden Pivot all but guarantees that the target with which it is associated will be reached. As for the precision of the “hit” that we are predicting with such confidence, it comes from certain features of the ABCD pattern itself that trained “Pivoteers” are taught to recognize. You Can Learn You could learn to do these tricks

It is with great sorrow that we note the recent passing of our dear friend Jonathan Auerbach, whose investment dispatches from around the world were as entertaining as they were enlightening.  He was an ebullient optimist in these troubled times, and it was this quality, along with his extraordinary generosity and kindness, that we will recall most fondly. Jon was given to doing business deals on a handshake, sometimes in places where you or I wouldn’t dare travel without an armed escort or a letter of introduction from the local chieftain.  A photo in his midtown NYC office showed a fledging stock exchange in a place so remote that it shared space with a café.  And yet, never once did he pay a bribe in any of these backwaters, nor was he ever threatened by some Banana Republic dictator to come to terms.  Some men are easy to like and to trust, and Jon was one of them. He was a gentleman’s gentleman and one of the classiest guys we've had the pleasure to know.  The Yiddish word for men like Jonathan Auerbach is “mensch,” and he stood out even among them. Global Reach He departed this world supposedly owing us dinner at Peter Lugar’s.  Jon had always insisted that our daily forecasts made him “tons of money.”  This was surely a kind exaggeration, since his investment style -- wholly unlike ours, which is to trade for relatively small gains -- was to swing for the fences. Few stockbrokers with global reach have done this more successfully than Auerbach, Grayson & Co.  The firm operates in 130 markets around the world and was among the first foreign brokers to do business in Iraq, Egypt, South Africa and Russia.  “Even when they’re bombing in Gaza, they’re trading in Ramallah,” Auerbach told

Call options or stock: I've provided two ways to go if you're keen on bottom-fishing in Newmont, which looks correctively bound for either of two closely spaced Hidden Pivot supports. .

Coincident downside targets that lie at, respectively, 42.72 and 42.52 suggest there could be an edge for us in bottom-fishing there.  Accordingly, I'll recommend buying four January 42 calls if and when the stock hits 42.62.  They would be a good deal for around 1.60, but whatever you pay, be ready to stop yourself out if the stock trades 42.39 or lower. Practically speaking, and assuming you stay alert to the stop-loss, your risk on this one would be around $30-$40 plus commissions.  If you'd prefer to simplify the trade by using stock alone, bid 42.55 for 400 shares, stop 42.41. If either order fills, please let me know in the chat room so that I can provide further guidance. _______ UPDATE (December 10, 2:07 a.m. EST): The presumptive C-D leg is taking its sweet old time to develop, but the trade suggested above remains viable nonetheless, so we'll continue to watch and wait.  Please note, though, that a 45.45 print today would tip the short-term outlook in bulls' favor. _______ UPDATE (December 11, 2:16 a.m. EST): For reasons that I explained during yesterday's impromptu session online, I'm not a big believer in this short-squeeze rally (see inset, a new chart).  We should remain open to the possibility of an impulsive rally on the hourly chart nonetheless, but yesterday's surge did not quite achieve that threshold, and so the targets below $43 should still be held in mind. _______ UPDATE (December 24, 11:50 a.m. EST): The stock has taken a ferocious bounce from 42.96, denying us the easy entry opportunity we'd sought (although camouflageurs would have had opportunities a-plenty on the one-minute chart).  The move was bullishly impulsive. However, because I don't trust it, we'll do nothing further for now.

The modest promise of the short-term chart displayed here the other day has given way to a more tired reality, and so it's appropriate to look at a bigger picture that shows what has been weighing Silver down. Notice that yesterday's swoon breached the midpoint support of a very clear bearish pattern that projects to at least 32.115. That Hidden Pivot is my minimum downside projection for the near term, and because it closely coincides with a low recorded in mid-November, you'll need to use 'camouflage' if you attempt bottom-fishing there, as I am suggesting.

The experts seemed stumped by Apple's wicked plunge yesterday, although MarketWatch came up with a list of five possible reasons that, taken together, might explain the $40 drop. Missing from the list was the possibility that the stock's institutional sponsors, after goosing it nearly 20% since mid-November, have elected to bring AAPL back down to relative bargain levels before running it up again into year's end. Whatever the case, from a technical standpoint Apple seems fated to fall to at least 522.66 over the near term if the 539.05 midpoint support associated with that number fails. It was exceeded by 28 cents yesterday, but that's probably not enough for us to infer that 522.66 is a done deal.  Let's plan on buying down there if AAPL continues to fall. Camouflage is advised, so you should set a screen alert somewhere around 523.30 to warn when the opportunity ripens.  If you'd rather try this trade the easy way, use a 522.73 bid, stop 522.49, 200 shares. _______ UPDATE (9:47 a.m. EST):  For the third day in a row, Apple has opened on a bearish gap. This one made short work of  bids other than those down near the so-far low,  518.63. The move was so precipitous that even on the one-minute chart there are no camouflage opportunities to be found. Current projections call for 447.55 (!) now that this Hidden Pivot's midpoint sibling at 521.07 has been shredded. Alternatively, it would take an impulsive thrust exceeding 603.00 on the daily chart to at least temporarily neutralize the bear. Click here if you want to learn more about ‘camouflage’ trading, a technique developed to reduce entry risk very significantly.

[All the government subsidies in the world will not revive the construction industry - only demand from increasing wealth will.  The guest commentary below offers a vivid picture of the economic and regulatory factors weighing on homebuilders these days. The author is Wayne Siggard, who builds mansions for the super-rich.  A UCLA law graduate, Wayne worked for Bechtel Financing Services and was self-employed as an investment banker doing private placements in oil and gas and alternative energy project financing.  When oil hit $10/bbl in 1985, he went into the homebuilding business, turning an avocation into an occupation. His real estate operations, including land development, have primarily been in California and Utah.  Wayne lived for several years in Italy and Switzerland and speaks many languages. RA] Large estates are what I build.  Nobody needs what I produce any more than they need a $70 million dollar Van Gogh painting.  You can spend over $1million just on a theater, or hardscape and landscape.  I spend more on appliances and lighting figures than the construction cost of a 2000-square-foot tract house.  To ask what a house costs to build is akin to asking how much a car costs. Are we talking Yugo, Kia, Chevy, Cadillac, BMW, Rolls Royce or Bugatti? The bottom line is this: There has been a demand for mansions and palaces since the beginning of recorded history, and there always will be. In the Roaring 20’s and 1974-2005, people bought big mansions because they anticipated making a million dollar profit on a $1.5 million dollar investment.  Ego and prestige have always been factors for me, along with being a fanatic about architecture.  Despite going to a top law school and working for ten years as an investment banker, I was one of those fanatics and made my passion my business.