Friday, May 8, 2009

The futures are within a day's weakness of a potentially very important Hidden Pivot support at _____. I have my doubts that it will end the bear market, but it could engender the kind of bounce that will make shorts doubt, at least for a short while, that

If yesterday was the reversal day it appeared to be, today could bring a tedious, temporary respite in the form of cat-and-mouse. We'll regroup in the chat room, since there's no percentage in calling trades ahead of this week's edition of Friday Follies.

We are attempting to short four ____ calls for 0.60 against four ____ calls we already hold with a cost basis of 0.69. Leave the order in for today, but check back during the day, since we may need to adjust on-the-fly. DaBoyz got a little piggish yesterday with the brutal head-fake opening, but

The Dollar Index continues to flirt with catastrophe, having exceeded a crucial midpoint support at 83.45 yesterday by 0.03 points. I''ve already predicted that DXY will fall to at least _____ if the support is breached

A Hidden Pivot support at _____is the best of an unappetizing lot, but it would become a realistic downside target for the near term if the futures bludgeon its sibling midpoint at 910.30 into submission. The support has already been exceeded by three ticks -- not quite enough for us to infer

The futures have gotten squeezed for 17 points since bottoming late Thursday afternoon, so there are obviously a few short-sellers left with more guts than brains. Night owls could take advantage by bottom-fishing at ____ , stop ____.

Are bears about to get a breather? It certainly looks that way, since two trading vehicles that we track and trade daily reversed sharply yesterday without reaching their respective Hidden Pivot rally targets. We were looking for Goldman Sachs to hit a minimum $144.19 to signal the end of the massive short-squeeze begun in November; the stock only reached $141.56 in the opening minutes of the session, however, and then it was downhill for the rest of the day. When the dust settled, the stock had fallen nearly $10, recouping some of those losses late in the day to finish at 136.50, down nearly $3. Meanwhile, another issue that we keep on top of, the E-Mini S&P, similarly climaxed minutes after the opening, hitting a high at 929.50 that fell four points shy of a rally target at 933.50 that we'd told subscribers about earlier in the week.   Ordinarily, we would regard such price action as disappointing but not necessarily fatal. In this case, however, there are aggravating factors that suggest the reversal from early-morning highs could be signaling serious trouble ahead.  For one, it was the second day in a row that buyers got sucker-punched on the opening bell. Stocks had opened on a gap on Wednesday as well, and most issues never traded above those highs for the rest of the day. Yesterday's short-squeeze opening was even nastier, since stocks fell steadily for the next six hours after gapping sharply above the previous day's highs on the opening bell. Short-sellers are unlikely to be fooled a third time, and that's why we'll be looking for a soft opening Friday morning. But don't expect much of a rally thereafter, since short-covering has been the only buying we've seen since early March with the power to lift the broad