If the Dow Industrials fail to hold above 7995, we’re projecting a whopping 1800 points more downside over the near term, to at least 6195. The target comes from a forecast that went out to subscribers on October 22, when the blue chip average was trading above 8500. At the time, we projected downside to at least 7995, a Hidden Pivot “midpoint” associated with the lower target at 6195. According to the Hidden Pivot Method, a decisive breach of the midpoint implies that the target itself will be reached, as it was yesterday. Moreover, if support comes precisely at the midpoint, its subsequent breach would imply that the lower target is likely to be reached with equal precision. (Click on chart to enlarge) Under the circumstances, and using a very tight stop-loss, we would be aggressive buyers of shares if the Dow were to fall to 6195. That may seem like a promising opportunity for someone currently holding no position, but it would be scant consolation to those who plan on sticking with their existing portfolios come hell or high water. (Of course, the forecast could go awry, and the Dow could rally strongly without getting anywhere near the target. But even if that were to occur we would not necessarily be caught unawares, since subtle signs of a turn would be evident on the intraday charts before a significant rally could develop.) *** Free Hidden Pivot Demo If you’d like to see Hidden Pivot analysis in real time, during market hours, there will be a free 45-minute demonstration online today at 1 p.m. MST. Seats are limited, so if you want to attend this demonstration you will need to register soon. You can do so by clicking here and following the instructions.
Thursday, November 20, 2008
E-Mini S&P (803.00)
– Posted in: Current Touts Free Rick's PicksThe two Hidden Pivot targets given here yesterday -- 772.25 and 766.50 -- still look like done deals, even if consummated sooner than I had expected. As noted here earlier, either number can be bottom-fished with a stop-loss as tight as 1.00-point. If you attempt it at the higher pivot, I'd suggest taking a partial profit on a bounce of as little as 6-8 points, since the lower target will still be in play and could coax the futures into a relapse.
E-Mini Dow (7949)
– Posted in: Current Touts Free Rick's PicksOur 7649 target corresponds to the 772.25 target given for the E-Mini S&P. However, there is none equivalent to ES 766.50, since no true A-B impulse leg was created.(See chart: the would-be 'B' did not exceed the 10/10 low). If the futures were to close for two consecutive days below 7649, though, they'd become an odds-on bet to continue down to at least 7224.
December Gold (738.30)
– Posted in: Current Touts Free Rick's PicksI've set some daunting benchmarks so that we don't get fooled by pernicious noise like yesterday's. For starters, a print at 782.30 is still needed to signal a resurgent bull. There are no compelling targets immediately below, although the decisive breach of a midpoint support at 729.40 could spell more weakness over the near term to as low as 694.10.
December Silver (9.260)
– Posted in: Current Touts Free Rick's PicksSilver's intraday charts are as uninteresting as gold's right now, although a midpoint support at 8.970 needs to be mentioned, since its breach could portend further weakness over the near term to as low as 8.085. Alternatively, a print today at 9.545 would be encouraging news on the 5-minute chart, but the leap it would take to create some positive energy on the hourly is beyond imagining, at least for the moment.
C Citigroup (6.42)
– Posted in: Current Touts Free Rick's PicksWe hold four Jan 7.50 calls purchased yesterday for 1.75, but I'll raise the cost basis if I hear from any subscribers who paid more. The stock's collapse yesterday was stunning, since it steam-rollered two Hidden Pivot supports and just kept on going. Both of the pivots worked, although not for long. The first engendered the biggest bounce of the day -- a 58 cent-er precisely from the 7.75 pivot -- but it gave way about 75 minutes later. The second, at 7.09, was breached by 7 cents initially, creating a low at 7.02 that held for about 80 minutes. Now, there is immediate jeopardy to 6.10; or to 5.86 if any lower; or to 3.58 if trumpets sound from on high. Accordingly, I'll recommend stopping yourself out of the calls if Citi exceeds 5.92 to the downside. I am suggesting this mainly because the firm's share price feels like it is skirting the vortex of bankruptcy. Incidentally, if it goes, as I mentioned here earlier, so, probably, will UBS. _______ UPDATE: With Citi looking bound for oblivion, we exited the calls for 1.22. The trading loss per contract was $53.
