Tuesday, April 28, 2009

Silver Wheaton has upside potential to as high as ____ 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 _____ calls, good through Friday.

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 _____ would signal the onset of a potentially much more powerful rally -- one that could hit _____ before mid-May.

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 ____, 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.

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 compress and decompress according to whether a stock is range bound or breaking out. The bands are quite constricted at the moment, suggesting that the Indoos may not continue to mark time for much longer. So which way will stocks break when they finally do? Our hunch is higher, even though that is not what we are feeling deep in our gut. However, when we are unable to come up with a single good reason for stocks to rally,  that's when we are most likely to assume a rally is coming. There is some technical evidence to support this, and we trotted out the bullish argument recently in the form of a paean to Goldman Sachs (GS).  The stock, which quite clearly has captured the hearts and minds of Wall Street these days, does not look like it wants to go down. To the contrary, it looks like it's fixing to rally to at least 144, a Hidden Pivot target we broached here the other day. That would represent an ascent of nearly 20% from these levels, but if GS were to fall to 107 in the meantime, we'd be ready to back up the truck and buy 'em at that price, since that's about as much of a

Nothing has altered the appeal of the ____ 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 ____ Hidden Pivot.

The bull trend begun in mid-February is still (mildly) dominant and could propel the futures to as high as ____. It may be starting to reassert itself today, since a corrective trend begun on April 17 that should have reached a downside target at ____ is having trouble bashing the midpoint support, ____, 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 chart.