A bearish target at 38.33 is equivalent to the 34.57 target given here earlier for the Janaury contract. The midpoint associated with the target lies at 45.58, and it is no coincidence that yesterday’s little head-fake died just six cents above it. Also, the fact that the midpoint figured so closely in the day’s price action suggests that the target itself, 38.33, will produce a relatively precise bounce. I typically advise stop-losses of at least 22 cents in this vehicle when playing for a reversal at a Hidden Pivot, but in this instance you could probably get away with a stop as tight as 12-14 cents.
COMMENTARY for Friday
Rick's Picks for Friday
March Silver looks bound for a minimum 10.680, but the provenance of this Hidden Pivot support looks a bit too vague to make it ideal for bottom-fishing. Alternatively, to effect a turnaround, the futures would need to push above 11.210, preferably in the early going.
In thin trading Thursday night, the February contract made a tentative stab below a minor midpoint support at 846.50, hinting of more downside over the near term to as low as 831.60. That’s a Hidden Pivot support, and it looks like a decent spot to attempt bottom-fishing if the midpoint has gotten crushed overnight. (The opportunity to bottom-fish the midpoint itself is already stale. It could have been be done with an initial stop-loss as tight as 845.90.) You’ll be on your own if you get long, but don’t hesitate to take a partial profit, at least, on a bounce of as little as $2.50-$3.00. If the midpoint holds, the rally would become doubly credible on a print at 866.00._______ UPDATE: You could have gotten long within $1.00 of the low, since Gold plummeted overnight to 830.10 before rebounding to as high as 842.70. My apologies for the error in my original instructions — a seemingly unavoidable byproduct of too many 14-hour workdays.
The Dow is trading exactly where it was two months ago, almost too tedious to watch. That of course means we should expect a “surprise” at any time, presumably one that holds rewards for neither bulls nor bears. The accompanying chart shows why it would not take much of a rally to create a powerful impulse leg on the daily chart. However, although this has been the case for more than a month, bulls have repeatedly failed to seize the opportunity. We’ll use a downside Hidden Pivot at 7923 as our minimum objective for now, subject to negation by a thrust exceeding 9654.
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Take any dozen good reasons for being bearish right now and they still don’t equal the bullishness of the chart shown. The undeniably compelling rally objective is 13085, a 4.8% move from current levels, and one can only surmise that the dusting the 12158 midpoint received on the last pullback (12/28) all but clinched a finishing stroke to the higher number. Moreover, it implies that bears shouldn’t get their hopes too high even if, in the next few days, the Dow plummets 324 points to retest the midpoint support. As of now, that would signal not weakness, but a screaming opportunity to get long. Hard to believe, really, but that’s what the charts say.
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‘Bad’ Recession Hard to Define
by Rick Ackerman on December 19, 2008 11:37 pm GMT
At what point does a recession become a depression? Our colleague Bob Bronson of Bronson Capital Markets Research notes that there doesn’t appear to be a hard set of rules to help answer this question. “As far as we know there is no theoretic or empirically defined gradient for quantifying the full range of economic declines from recession to depression,” Bronson notes in a recent e-mail. “Please advise if you have information otherwise.”
Anecdotally, a recession supposedly is signaled when your neighbor loses his job, a depression when you lose yours. There is a painful truth in this, since the economy, bad as it is, undoubtedly looks much worse right now to someone who has been unemployed for a few months. But when we consider the big picture, unemployment is nowhere near the levels of the 1930s. In fact, by 1933 slightly less than 27% of all wage earners - about 15 million workers – had been fired or laid off.
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