February 2009

The 1.70 overshoot yesterday of a longstanding target at 952.30 was not sufficient to justify breaking out the bubbly, at least not yet, but neither was it so subtle that we should infer bulls can’t muster another surge. If and when it comes, look for a move to 976.40. That’s a Hidden Pivot, and you should expect it to show precise stopping power. Accordingly, any longs held on the way up should be partially disgorged rather than held on the certitude of an instant follow-through to $1000. Alternatively, the futures would need to fall below 936.50 Thursday night or Friday to turn the hourly chart bearish. Thereafter, the c-d “follow-through” leg proceeding from A=953.10 has the potential to yield an opportune midpoint for bottom-fishing.

Since I’ve projected a spectacular decline to $29, we should be on the alert for good shorting opportunities in this stock. It is likely to be tricky, though, since any stock with $100 of “juice” left in it these days is going to be a very tempting target for bears. At the moment, the most promising place to attempt getting short is 99.74, the Hidden Pivot midpoint of the pattern shown in the chart. The pattern is far from ideal, so we’ll play it conservatively, bidding for a single July 80 put (GSSP). The option last settled at 12.20 and should be trading for around 11.10 with the underlying stock at or near the target. However, I plan to monitor this trade closely and will update my advice if it looks like we can do better. To stay apprised in real time, simply switch on the Bulletin Launcher on the Home Page. This will trigger a pop-up when I post an alert under Intraday Notes. Note: On the way up, we’ll also try to short 200 shares at 96.61, stop 96.81. That’s a promising Hidden Pivot associated with a lesser trend. _______ UPDATE: We were stopped out on the stock trade for a $40 loss about 30 minutes into the session. Today’s histrionics were pointing toward a Hidden Pivot at 99.23, with another, lesser one at 98.62. We’ll try to short 100 shares at each target just to stay limber and alert. A stop-loss of 7 cents is advised.

Crude is bearing down on a potentially important target at 32.93, a Hidden Pivot support that you can bottom-fish with a stop-loss as tight as 32.69. Since the trade would risk 24 cents on the initial stop-loss, any partial proft-taking or the implementation of a trailing stop would require a bounce of at least 72 cents from the entry price.

Yesterday’s whoopee-cushion thrust pushed the futures above Wednesday’s peak, creating a bullish impulse leg on the hourly chart. That means the pullback under way this evening will be a “buy”, albeit with such precautions as you can bring to the task by leveraging corrective a-b-c patterns. As of 7:40 p.m., the retracement had not developed sufficiently to yield a promising spot for bottom-fishing.

Let’s try shorting a 97.65 Hidden Pivot that turned up during yesterday’s real-time tutorial session. We’ll use March 90 puts (IBMOR), which should be trading for around 1.90, but I’ll put out an advisory if it looks like we can improve on that price. The order is good through Friday. _______ UPDATE: Cancel the order. Da Boyz flushed Big Blue on the opening, taking it down 75 cents on a gap to greet the day.

With precious metals trading well off their night-session lows, March Silver appeared bound for 13.910 over the near term. The midpoint resistance associated with that target lies at 13.680, a hair above Wednesday’s 13.670 peak. There is one other hidden resistance that should be monitored for signs of a stumble: 13.770.

Rangebound tedium is about to enter its second month, and as long as it continues, any opportunities will likely come from charts comprising 15-minute bars or less. Yesterday’s price action was especially unappetizing, consisting as it did of “dueling” impulse legs on the 15-minute chart. There are times when we should look for other vehicles to trade, and this is one of them.