If yesterday’s low at 84.71 holds, DXY could recover to as high as 87.03 by week’s end or early next. However, the index would need to close above that Hidden Pivot for two consecutive days to hint of a resurgence to new highs. The target is derived from a “reverse” abcd pattern like the one used in the gold chart that accompanied yesterday’s commentary.
COMMENTARY for Friday
Rick's Picks for Wednesday
The 877.70 target billboarded in Thursday’s commentary will remain our lodestone, but more immediately the futures will need to clear a minor midpoint resistance at 822.10 to build some thrust. If they are holding above it halfway into today’s session, assume that a finishing stroke to at least 837.50 is imminent.
The pattern shown in the chart points to 612.75, a 28% decline from these levels. Although the overall pattern is pretty easy on the eyes and therefore moderately compelling, the C-D follow-through leg is taking longer to develop than we might have expected. Is this mild buoyancy a sign of accumulation? Perhaps. But we’d need to see a thrust that impales both of the labeled peaks in a single bound before we’d infer that ‘C’ is likely to be exceeded by a rally, and with it our downright reasonable target at 612.
A Hidden Pivot at 1534.30 flagged here earlier is pulling the futures lower, along with a secondary target (shown) at 1532.70. Camouflage is called for if bottom-fishing, so start looking for the turn on the 5-minute (or less) chart from 1535.80 on down. If these supports give way easily and, heaven forbid, the futures close below them, the next stop would likely be 1500.00, the ‘D’ target of the large pattern shown. Night owls could also use a 1520.30 target to bottom-fish — without camouflage. A four-tick stop-loss should suffice. Want to learn how to do this stuff yourself? Click here for information about the upcoming Hidden Pivot Webinar on June 6-7.
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There are numerous bearish patterns we can use to project a potentially important low, but the one that I like most has three single-bar coordinates, all sharply etched. They produce a 358.38 ‘D’ target, and although I cannot guarantee that will be where the carnage ends, it would most surely be worth bottom-fishing with a tight stop-loss. My best-case scenario implies that the low was made yesterday at 390.63, just 0.59 points from the ‘D’ target shown in lavender. To take the offensive, bulls would need to push this vehicle to 422.47 by Thursday.
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Rally So Far Is Just Noise
by Rick Ackerman on November 28, 2008 6:20 pm GMT
It’s hard to know what’s on Wall Street’s pea-sized brain, but we can safely rule out the CNBC point of view that the Dow Industrials have rallied 1200 points because investors are pleased with Obama’s appointments. It is a short-squeeze, pure and simple. Moreover, and for the record, the rally has yet to surpass even a single prior peak on the daily chart, let alone the two peaks we require before the rally would begin to earn our bemused attention. Here’s a graph the shows why the supposed monster rally amounts to little more than noise so far:
How far can it go? We’ll eschew guesswork and say only that it can continue until the last drop of blood has been wrung from the last bear. But with consumer spending in a freefall, business investment dropping and recession tightening its grip on the global economy, we don’t see any urgency about buying stocks at the moment.