Rick Ackerman

On a hunch that the stock has eyes for $1000, we've been working a lowball bid for some November 1000-1010 call spreads. The stock has weakened since, and although that could provide us with an even better opportunity, I'll suggest shifting the effort to the December calls. Accordingly, let's bid 0.70 for eight December 1000-1010 spreads -- about midway between the current bid/offer of 0.40/1.10 -- good till canceled.  The bid should be made contingent on the stock trading 875 or higher, but you can continue bidding if GOOG falls below that number, lowering your bid by 2 cents for each dollar the stock falls. That would imply a spread bid of 0.64 if the stock is trading around 872.00. Please note that GOOG could fall to as low as 861.96, the correction target of the pattern shown, before bottoming.  ______ UPDATE (8:32 p.m. EDT): With the stock moving higher, you can raise the spread bid to 0.80 if GOOG is trading above 885, and to 0.90 if above 890. If this gambit gets away from us, we'll try another approach: legging on the spread, doing the buy side first on weakness.

There is unfinished business in the pattern shown (see inset). Although I'd said a selloff to at least 1662.50 looked like a done deal, the futures in fact went no lower yesterday than 1666.75.  Moreover, the subsequent rally to 1681.00 would become very bullish if it goes just a bit higher, exceeding 1687.00 today without pausing for breath. That would be bullishly impulsive on the intraday charts, and bears had better step aside if it happens. However, since the rally has yet to decisively exceed the red line, the so-far flirtation with this Hidden Pivot midpoint should be regarded as an opportunity to get short via camouflage in advance of a relapse to 1662.50.  My suggestion is to find your entry spot on charts of 5-minute degree or less while at the same time remaining open-minded to the possibility that the next tradable, minor move will be higher rather than lower.

If you are reading this and the U.S. Government has in fact shut down, it might be tempting to think that it's morning in America again. Unfortunately, however, that indomitable and wickedly pernicious agent of Big Government and the Banksters --i.e., the Federal Reserve -- will still be operating full-bore, about as vulnerable to hardball budget tactics as a rhino to a pea shooter. As Rich Cash points out in the current forum discussion, there have been 17 previous attempts to shut down the government, each time turning out to have been a non-event. He further notes that stocks generally rose in the aftermath.  If you're wondering how high they might rebound this time once the current shakedown has run its course, check out today's DJIA tout.  For a humorous take on the whole, sordid mess, click here for Sultan Knish at his best.

The Indoos' broad undulations since April have offered little drama, only the sense that those who control the ebb and flow are able to move shares gently higher while consolidating them for a potentially spectacular blowoff.  None of this has altered my 15864 bull-market target, although the narrow failure to achieve that number on the last big push begs the question of why. We'll look to get short there in any case, albeit with tight stops, but my hunch is that DaBoyz have bigger things in mind.  This would be strongly implied if the current correction, now two weeks old, bottoms near 15000 rather than coming all the way down to the lower channel line (see inset). An impulsive rally thereafter would generate the strongest 'buy' signal we've seen in a long while, but there's no point getting interested, let alone excited, until such time as bulls tip their hand.

Index futures are getting shaken down Sunday night as DaBoyz feign fear over the impending government shutdown.  Gold, on the other hand, trading a dime above Friday's settlement price, is providing a calmer and probably more accurate, read on the likely outcome of Capitol Hill's Punch-and-Judy show -- i.e., nada.  For now, the benchmarks that I gave here earlier still obtain.  That means an impulsive thrust below 1272.50 would turn the weekly chart bearish, but that a print above 1353.7o would put bulls back in charge for a possible run-up to 1453.00.

The futures bottomed on Friday a single point from where expected, at 1680.00, then spent the rest of the day flailing around. Only one trader in the chat room reported having bought the low, but if you did, it would have been prudent to have exited before the bell.  Price action was ostensibly bullish as the week came to a close, but if you're keen to re-enter a long position ahead of whatever sausage Congress is about to extrude, I'd suggest using the very nice 'external' peak at 1687.75 (see inset) for leverage. Any shallow 'a-b' pullback from just above it could set up a low-risk entry opportunity for camouflageurs. _________ UPDATE (11:03 p.m. EDT, Sunday):  Sunday night's opening has produced a gap-down bar through 1680.00 that all but guarantees more downside over the near term to at least 1662.50.  Risk-takers can try bottom-fishing there with 'camouflage,' but the pattern has so many things going for it (see inset) that I'll also sanction a 1662.50 bid, stop 1661.75.

We veer well off the beaten path with this week’s Question of the Week:  What could conceivably reverse the U.S. economy’s decline of the last 40 years?  Although I’d initially considered limiting the dialogue to optimistic points of view to stretch readers' imaginations, a sunshine-and-lollipops requirement might prove to be a non-starter in this forum.  And so, if you truly believe that there is nothing you can think of that would reverse the implosion of America’s standard of living, feel free to vent your pessimism. Implosion?  Some will argue that the very word overstates the problem – or that the problem doesn’t exist. They will point out that the stock market is trading at all-time highs, that their next-door neighbor just spent $40,000 on a kitchen remodel, that another recently took his family on an Alaskan cruise, and that a 60-inch TV is well within the reach of every family that wants one. ‘Shop Till You Drop’ Is America great, then, or what?  It depends. If your credo is “Shop till you drop!” then yes, one could argue that we are indeed living in the very best of times. But others, including your editor, would say that although the easy availability of “stuff” is arguably at a civilizational high, some non-material things that matter a great deal more to our well-being have receded beyond the reach of the broad middle class.  Consider the following: Private-sector workers are no longer able to save enough to retire at 65 if at all. Stay-at-home mothers have become a luxury that fewer and fewer households can afford. Even double-income families are having to borrow heavily to put the kids through college. New graduates face a bleak job market for which the degree skills they acquired are ill-suited. Retirees who held good jobs during their

What passes for leadership on Capitol Hill will be working feverishly today to craft a compromise that avoids shutting down the government. Whatever happens, we should pray that it derails Obamacare, the most pernicious and economically destructive piece of legislation ever to be enacted by Congress. Although the markets are going to be unsettled as the House and Senate attempt to reconcile their differences, whatever phony compromise emerges seems bound to send shares higher.

The spectacle of two stocks that deserve our opprobrium launching into parabolic rallies cannot but help remind us of the sometimes crazed power of OPM.  Yahoo and LinkedIn shares appear headed into the wild blue yonder, but there are reasons to think that the exuberance driving their ascent is misplaced.  We've seen no evidence of genius in Marissa Mayer's stewardship of the Yahoo. To the contrary, her billion-dollar play in Tumblr should make shareholders queasy rather than ecstatic. As for LinkedIn, although Wall Street seems not to care, we take seriously a lawsuit that effectively accuses the company of acquiring subscribers through deceit and fraud. Not that that is necessarily bearish for a stock, given the level of deceit and fraud that permeates Wall Street itself. We shall see. For the moment, however, subscribers are short in YHOO! via some out-of-the-money puts, and on-notice to short LNKD as well when it hits a Hidden Pivot rally target at 268.50.