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COMMENTARY for Thursday
TODAY'S ACTION for Thursday
Rick's Picks for Thursday
The futures did a little jig at 880.00 to create a bottom near the end of Wednesday’s session, but a Hidden Pivot support just below there at 878.50 is nonetheless worth bottom-fishing if you are a night owl looking for something to keep you awake. An 877.75 stop-loss is appropriate, implying that you could take partial profits, or implement a trailing stop for a single-contract position, if 881.25 is touched on the expected bounce. The pattern is so pretty that I’m surprised the futures did not hit 878.50 on the first try. I’ve reproduced it for your interest and will note that the ‘B’ low is about as unsausage-like as they get. The pattern also begins with a classic one-off ‘A’. Someone asked about “sausage B’s” in the chat room tonight, and this one illustrates the perfect ‘B’ — i.e., one that narrowly exceeds any prior lows that can be found to the left of it. ABC patterns that exhibit this trait seem to yield the most reliable and precise ‘D’ targets. _______UPDATE (9:29 a.m. EDT): The trade worked oh-so-nicely when the futures bottomed at 878.75 — a single tick from the target — then took a 9-point bounce. I’ll assume the pivot was front-run by subscribers and the recommendation traded, since the low fell so close to the target.
The Hidden Pivot at 936.60 shown in the chart was a logical place for yesterday’s rally to top, so we shouldn’t be overly optimistic coming in this morning now that the spiky high at 931.40 has missed our number on the first try by more than five points. The target itself remains viable nonetheless, and we can all breathe easier if it gets hit or exceeded today. Alternatively, the futures would need to fall to 915.90 by day’s end to turn the hourly chart bearish.
I’ve been tracking and forecasting the bonds higher since last Friday, when they turned from a low near an important Hidden Pivot support at 119^10. Now, having exceeded the first rally target subsequently given, 121^28, they are about to encounter another not far above at 123^15. If that resistance gets bulldozed within an hour of first being touch, it would lend weight to our hunch that this could be as good a rally as the bonds will see in 2009. I’ve reproduced an hourly chart that shows the ABC pattern, which, though somewhat unintuitive, looks technically appealing to me.
We continue to hold a modest short position, a September 270 put purchased a while back for 8.00. The position is no longer tied to any technical rationale, but rather to my gut feeling that the rally in this stock since we acquired the put has been seriously misguided (much like the rally in Microsoft, a stock in which we also hold a small short position). Yesterday’s $12 decline was therefore a breath of fresh air, but it would become even more telling if the selling were to take Gluggle below a Hidden Pivot support at 385.12 today. That would be the first sign since early March that traders understand that even this companywill have to cope with hard times in the months (years?) ahead. Incidentally, I can personally feel Google’s pain because the ads they have festooned like Burma Shave signs all over the Rick’s Picks web site each day have been producing about half the revenues of just six months ago. _______ UPDATE (10:10 a.m. EDT): The so-far 42-cent overshoot of the target should NOT be considered sufficient to have invalidated it. For whatever reason, this stocks tends to need a bit more room than most others.
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INTRADAY TRADING NOTES for Thursday
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Hidden Pivot Webinar & Tutorials
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Bull Tide Recedes with a Whoosh…
by Rick Ackerman on May 14, 2009 12:01 am GMT · 4 comments
Did the bear rally breathe its last with yesterday’s sharp reversal? We shall see. But we hesitate to call the hubris of the last ten weeks a sucker’s rally, since we do not personally know anyone who did not hate and revile it every step of the way. A “bull trap” is what the rally will come to be called if stocks now fall in the weeks and months ahead, since many who eagerly bought into it will drown as the bullish tide recedes. However, since March 6, when the rally commenced on news that Citi had actually made money, it is bears who have been trapped. It could be said in their defense that trying to pick a top in the current economic environment is an unavoidable » Read the full article