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COMMENTARY for Thursday
TODAY'S ACTION for Thursday
Rick's Picks for Thursday
The 822.50 target caught yesterday’s high within 1.25 points, but the nasty swoon that followed was not telegraphed by the chart I had used to project that target. The erratic price action will somewhat alter my projections for the near-term but it will not dampen my bullishness, especially considering the miraculous recovery of Goldman shares at day’s end. My upside target for the near term is now 848.25, subject to midpoint resistance at 817.75. That’s just a couple of points above Wednesday evening’s so far high, so night owls may have a chance to position themselves for a breakout.
Yesterday’s gratuitous spasms created a new point ‘C” for the uptrend begun last Wednesday, slightly lowering our bullish benchmark to 958.60 from 959.50. That’s a Hidden Pivot midpoint, and because the pattern that produced it is not a minor one, we should require a two-day close above it before we infer that the rally will complete to its 1001.10 target. Alternatively, if Gold gets hit today, we could look for a bounce from 913.40, or from 904.10 if any lower. The second number looks like the better place to try bottom-fishing, which could be done with a stop loss as tight as 903.30.
Last Wednesday’s amazingly steep rally was as impulsive as it gets, hence the nasty consolidation to disillusion all those who may have believed it would be easy get long and set the controls on “cruise”. From a mechanical point of view, it would take a thrust touching 128^31.5 to indicate that a second leg with potential to as high as 135^19.5 is under way. The pattern looks too pat, however, to use that as an entry price unless it can be done by working a smaller pattern in “camouflage” fashion.
Some wag in the chat room mentioned my $22 target in crude the other day, and I’d have to concede at this point that the futures are taking a devious route getting there. In any event, the 57.78 rally target broached here a while back remains valid as a minimum upside projection for the near term, and you could short that Hidden Pivot with a tight stop-loss. In this vehicle, targets that come from “nice” patterns on the hourly chart usually require about a 20-cent margin of error.
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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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Hysteria Drives Stocks Once Again
by Rick Ackerman on March 26, 2009 12:01 am GMT · 1 comment
There will always be days on Wall Street like yesterday, when even those who are barely aware of the stockmarket can understand that its activities are driven mainly by a bunch of yo-yos. To look at the dignified, neoclassical façade of the New York Stock Exchange, one would never guess that it is just a highfalutin’ nut-house. Take yesterday, for instance. The Dow Industrials began the day with an orderly 215-point rally, extending the bull run of the last few weeks. But luncheon remarks by our new Treasury secretary caused shares to swoon so precipitously that you might have thought the U.S. was under attack by the Martians. » Read the full article