Commentary for the Week of March 8

As promised, here are my predictions for 2012. So many things could go horribly wrong that it's probably best that we simply try to live our lives to the fullest and not worry too much about the headlines.  Before I start listing away then, let me wish you all a happy New Year. Whatever the news brings in 2012, may you and yours enjoy good health, happiness and inner peace. Here they are: *  After taking a strong lead in the primaries, Ron Paul will be bludgeoned into defeat by the mainstream news media and its Evil Masters. The Establishment has far too much to lose if Paul becomes President, and it will fight him openly and shamelessly with every resource at its command. *  European borrowing rates will threaten to explode above 7%, pushing the PIIGS into bankruptcy (although it won't be called that). The euro's fall will be arrested at $1.08 nonetheless, buttressed by a Rube Goldberg "restructuring" plan that, fortunately for the global financial system, no one will be able to understand. *  'Mother' nature will continue to rampage with yet more earthquakes in places where earthquakes don't usually happen. *  Yields on U.S. Treasury Bonds will fall to 2% simply because there aren't enough mattresses to hold the world's money. *  Despite its intrinsic worthlessness, the U.S. dollar will soar, pushing the Dollar Index above 90. *  Toward the end of the year, deflation in the U.S. housing market will enter its climactic stage. Before the washout ends in late 2013, homes prices will have fallen 80% from their 2007 peaks. *  Gold will stage a powerful rally after bottoming at $1445 in January, but the buying spree will fall well short of $2000. Silver will fare relatively worse, falling to $18.35 before finding traction and

I hadn't intended to do a "Rick's Picks Predictions for 2012" because I'm skeptical that anyone could get it right. So many things could go wrong next year that it's difficult for me to imagine the world muddling through the month of February, let alone muddling along for another twelve months. Still, I'll give it my best shot in Friday's edition, since I've already skirted the topic in an interview yesterday morning with radio host Al Korelin. It's tempting to try to stand out from the pack, predicting things that few of my guru peers expect. However, I'll go out on a limb with this one here and now:  I expect Apple shares to be trading no higher than they are trading now, and perhaps significantly lower.  See you Friday!

If there's no one around to hear bad news, is it bad news?  Apparently not.  Amidst some less-than-believable sightings of green shoots come reports of a drop in home prices at a time when mortgage rates are at record lows.  Somewhat more credible, although perhaps only slightly so, is an Iranian threat to block the Strait of Hormuz, through which a fifth of the world's oil supply passes.  The Iranian president says the threat is in reaction to a piece of U.S. legislation that, once signed by Obama, would reduce Iran's oil revenues. The intent is to deter Iran from making a nuclear bomb, but who actually believes the mullahs will be so easily deterred? In any event, NYMEX crude rallied $2 intraday but has risen only a further six cents Tuesday evening.  Through it all, Rick's Picks has experienced a drop-off in holiday-week traffic that suggests its subscribers will not be the ones moving markets in the remaining days of 2011 no matter what the news. Still to come, on Thursday, is what will have to pass for economic news this week: initial claims for jobless benefits, the index of November pending home sales, and December's Chicago purchasing managers index. Will we be able to stand the suspense?

Regular coverage of popular trading vehicles, including index futures, commodities, gold & silver futures and widely watched stocks, will resume late Monday evening. Markets are scheduled to begin trading then in limited fashion, much as they do on Sunday nights.

My very best wishes to you all on this day of joyous celebration for Christians and Jews. May the festival lights of Chanukah and the Nativity Star shine brightly upon all the world.

My very best wishes to you on this day of joyous celebration for Christians and Jews.  May the festival lights of Chanukah and the Nativity Star shine brightly upon all the world...

U.S. stocks showed unbridled enthusiasm yesterday for the changing of the guard in North Korea, tacking 337 points onto the Dow Industrial Average. Could heir apparent Kim Jong Eun be the Man of Peace the world has been waiting for?  It sure looked that way on Wall Street, where a wave of optimism about something fabulous swamped sellers from the opening bell. Even if the young Kim – reportedly a huge basketball fan like his dad --  merely slows North Korea’s mischievous transfer of nuclear weapons technology to Iran’s mullahs, jihadists and terrorists around the world, it would be the best Christmas present our crisis-fatigued planet could receive. Small wonder, then, that North Koreans were sobbing in the streets as they grieved the loss of their Dear Leader.  And very dear he must have been, to judge from the tens of thousands of mourners who lined up for hours to pay their respects as Kim Jong Il lay in state, ensconced in a glass-covered coffin. Was he smiling when he died?  We couldn’t tell looking at the picture below, although we won’t be surprised if a future biographer reveals that Kim, who’s name means “regal hill,” was a world-class kibitzer in private. A few churlish newscasters said the distraught mourners looked like they were putting on an act. But then, the network anchors have always had it in for the Kims, especially after Richard Nixon died in 1994 and left them with a large surplus of loathing and revulsion to expend. North Korea’s leaders were bound to be a target of their opprobrium, given the Kim dynasty’s well-known penchant for cute girls, Cuban cigars and Remy. Granted, most of North Korea’s citizens are lucky to get 500 calories of food in a given day. But is that any reason to

It’s getting a bit late for a Santa rally, but you can’t blame DaBoyz for trying – trying every night, actually, after most U.S. traders have gone to bed and there are almost no sellers to resist the stock market’s natural buoyancy in a time of unprecedented monetary easing.  We’ve lost track of how many times in the last month index futures hit their highs in the wee hours, only to fall into the red during the regular trading session. It happened yet again Sunday night when the E-Mini S&Ps wafted the equivalent of 90 Dow points higher on volume-less trading before dropping sharply to close off a hundred points. We’d held a long position in the March futures going into the weekend, and although the position showed a paper gain of $600 when we exited on a stop at 1210.75 Monday morning, we bailed out well off the overnight highs. This wouldn’t be the first time we got long with an ultra tight stop-loss using the Hidden Pivot “camouflage” technique, nor would it be the first time that the uptrend we boarded went nowhere.  Catching the occasional big wave is always our intention when we do “camo” trades, but given the choppy, go-nowhere, do-nothing price action in recent months, we’ve had to adjust our “long-term” horizon downward not to months, weeks, or days, but to hours. Santa’s Influence Nil Concerning Santa’s seasonal influence on Wall Street’s otherwise pointless, algorithm-driven histrionics, news from Europe has overshadowed so-so reports on holiday retail sales in the U.S. The last such report suggested that many shoppers had finished early this year and that there would not be much good news coming down the home stretch. Such “facts” seem impossible to determine, though, since it would require exit polls at the malls to say

Does the chart below of the Dow Industrial Average make you feel bullish? Bearish? Neutral?  We’re not sure ourselves. Although we’ve been using technical analysis for nearly 40 years, the chart doesn’t speak to us. At best, it leaves us with only a moderately bullish bias for the near term  -- and a vague feeling that the meaningless price swings that have ruled the markets in 2011 could continue for longer than we would care to imagine, let alone explain  This is hard to believe, especially with so many dreadnoughts bearing down on the global economy and banking system. The U.S. is re-entering a recession that never ended for most households. China has hit the brakes in preparation for a slowdown in global trade, and the country’s real estate bubble appears to be deflating with a vengeance. Jihadists are planning naval “maneuvers” in the Strait of Hormuz. Bird flu and the bubbling Yellowstone caldera threaten us with extinction. And there is of course Europe, faced with the impossible choice of either monetizing the debts of countries that will never be able to pay them, or letting those countries go bankrupt. We think it is the latter option that will forced on decision-makers, since rich-uncle Germany understands that throwing another two or three trillion euros of debt-money at the problem will not fix it.  In any event, the decision cannot be delayed for much longer, since interest rates for sovereign borrowers are becoming increasingly uppity. For Italy, most crucially, rates are edging back toward 7% -- the extreme end of the red zone politically and economically – within days of each new phony bailout scheme hatched in Belgium. A disaster is coming, and it is only a question of when. Like a Kite in a Gale And yet, U.S. stocks continue