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COMMENTARY for Tuesday
TODAY'S ACTION for Tuesday
Rick's Picks for Tuesday
The bull trend begun in mid-February is still (mildly) dominant and could propel the futures to as high as 56.87. It may be starting to reassert itself today, since a corrective trend begun on April 17 that should have reached a downside target at 45.26 is having trouble bashing the midpoint support, 48.50, into submission. At the moment, you could say that the bearish correction is struggling for its life as it oscillates violently around 48.50. The bullish and bearish patterns referred to above are shown in the accompanying chart.
Nothing has altered the appeal of the 892.75 rally target broached here earlier, and it should be held as our minimum upside target as long as support at 823.00 is not breached. In the meantime, expect bulls and bears to continue to duke it out above and below 857.00, the midpoint sibling of the 892.75 Hidden Pivot. _______ UPDATE (11:20 p.m. EDT): Moderately weak in after-hours trading, the futures looked bound for 844.00, a minor Hidden Pivot support that can be bottom-fished with a stop-loss at 842.75. You’ll be on your own if this one fills, but keep in mind that it’ll take a rally of at least 3.75 points to put you in a position to take partial profits or implement a trailing stop. ________ FURTHER UPDATE (10:25 a.m. EDT): With the futures on their way down to an overnight low at 838.50, the trade was stopped out for a $63 loss after bouncing 3.00 points.
Gold played touch-sies with our target yesterday, only to retreat timidly thereafter. The selloff did no technical damage, even on the 15-minute chart, so we shouldn’t read too much into it. However, if the futures are to get back in bullish gear, we should ask that they demonstrate their intentions with a leap exceeding 938.80, a small but significant peak made on the way down in late March. That would create the kind of bullish impulse leg on the hourly chart that would not be easily reversed. _______ UPDATE (10:10 p.m. EDT): The futures went silly shortly after 8 p.m., creating in just a few blinks some price bars that probed as low as 885.70. For the next few hours, at least, the markets will test the rationality of this inscrutable print, guided (or perhaps misguided) by whatever rumors find their way onto our favorite gold sites.
The bullish action of the last week has not negated those nettlesome targets down around $11 – that would take a pop above 13.885 – but it has reduced the likelihood of their being reached over the near term to a very low order of probability. More immediately, a thrust of at least 37 cents originating from anywhere north of 12.335 would signal the onset of a potentially much more powerful rally — one that could hit 14.02 before mid-May.
Silver Wheaton has upside potential to as high as 10.22 on the next thrust. Let’s try to leverage this possibility by legging into some calendar spreads at the $10 strike. As long as the stock is trading $8 or higher, bid 0.74 for four September 10 calls (SLWIB), good through Friday. _______ UPDATE (12:20 p.m.): The stock opened below $8 and has weakened since, so let’s lower our bid to 0.60 and leave it in for the remainder of the day.
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Hidden Pivot Webinar & Tutorials
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Thinking of Shorting a Quiet Tape?
by Rick Ackerman on April 28, 2009 12:01 am GMT · 2 comments
Stocks came crawling out of the gate Monday, ushering in the new week with a display of heart-corroding tedium unseen since….last week. Or the week before that, come to think of it. Look at the graph if you think we’ve exaggerated. It shows the Dow Industrials in a relentless dither that extends back to early April. The range from highs to lows is about 300 points, an unnatural compression that we might expect to give way to an explosive move at some point. Oftentimes such moves are telegraphed by Bollinger Bands, which » Read the full article