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COMMENTARY for Monday
TODAY'S ACTION for Monday
Rick's Picks for Monday
The minor downtrend from Friday’s high pointed as low as 864.75, but as of 1 a.m. EDT sellers had not even achieved the Hidden Pivot midpoint, 874.00 This hinted of a firm opening Monday morning even though the futures were trading below last week’s settlement price as the night wore on. In any event, bears would be wise to run for the hills if the futures pop above 897.00 today, since that would turn the hourly chart unambiguously bullish. A subtler bullish signal would occur on the 15-minute chart at 885.00.
Our bullish benchmark is still 935.90 a tick above an unimposing but nonetheless important peak that was created April 1 on the way down. However, if a test of resistance at $1000 lies shortly ahead for the bull cycle begun in mid-April, the futures should be able to do a bit better, surpassing a second “external” peak at 948.50 recorded on March 26. Both price points are shown in the accompanying chart
A key rally target that has been four months in coming lies just above, at 361.53 If this number is achieved, slightly exceeding a very important peak at 359.79 recorded last September, that would be the most bullish price action we’ve seen on the daily chart since December. That is when HUI created the impulse leg for which 361.53 was to become the ‘D’ target. The target itself is both clear andcompelling, so any progress above it, especially on a closing basis, and most especially within a day or two of its first being achieved, would suggest that bulls are just starting to warm up.
Goldman’s narrow failure to surpass an autumn peak at 142.00 on the last rally spike suggests that the bear rally’s days are numbered. Getting short could prove tricky, however, since we want to avoid doing so if the stock still has one last lunge left, as it well may. One way we’ll be able to judge for ourselves whether this is likely is by observing the price action on a modest decline to 131.10 That is the midpoint support of an abc downtrend begun on the hourly chart from last Tuesday’s peak, 138.05. We can even try bottom-fishing there with a tight stop, since, if we catch a rally, the profit would give us some ammo to cushion a stop-loss when we subsequently short the nasty little s.o.b. Accordingly, I’ll recommend bidding 131.14, stop 131.02, for a hundred shares. If the stock fails to accommodate with a pullback, we could also try a “camouflage” entry following a print above the 138.96 peak-let recorded a week ago.
There’s an unachieved target down at 80.05 but we should monitor the Dollar Index closely right now, since just a little more upside would generate a bullish impulse leg on the hourly chart that could delay or eventually negate the target. Specifically, if DXY pops above 83.46 today or tomorrow, the short-term picture would turn positive.
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INTRADAY TRADING NOTES for Monday
Speaking of Goldman's "attitude" today, which someone in the chat room mentioned, it's time to nibble on FAZ, which mimics the Russell Financial 1000 in reverse, 3x. Option implied volatilities are beyond stratospheric, but we can try to get around this by calendar ...
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This Just In... for Monday
Posted by Rick for Don Cephus, here’s a good list of housing crash links from patrick.net:
- More high-end properties sitting on the market (sfgate.com)
- Multimillion Dollar House Price Cuts (finance.yahoo.com)
- No sign of foreclosures slowing (nctimes.com)
- Silicon Valley Foreclosures To Accelerate (viewfromsiliconvalley.com)
- Las Vegas house prices plummet toward ZIP (lasvegassun.com)
- Mass auctions of foreclosed houses not as successful as billed (tampabay.com)
- Deep Property Depreciation Still Ahead (seekingalpha.com)
- States like California, Arizona and Florida still have far to fall (businesswire.com)
- Worst Is Yet To Come (finance.yahoo.com)
- Personal Credit Crisis Of NY Times Economics Reporter (nytimes.com)
- Who, Me? Yes You, Greenspan! (lewrockwell.com)
- $8000 tax credit not actually for downpayment (boston.com)
- Real Estate Developer Sues Banks That Loaned It Money (businessinsider.com)
- Mortgage modifications make housing dead asset class for years (fieldcheckgroup.com)
- TARP is a “sham” and a ripoff to taxpayers (huffingtonpost.com)
- 99 Years in Prison for Mortgage Fraud. Not a Typo (nationalmortgagenews.com)
- America Forgot Lessons It Taught China (nytimes.com)
- China’s yuan ’set to usurp US dollar’ as world reserve currency (telegraph.co.uk)
- Anatomy of an economic meltdown (sfgate.com)
- Jeff Walser, FDIC Economist, Charged With Attempted Bank Robbery (huffingtonpost.com)
If you come across other good housing stories, please mail the link to p@patrick.net.
Hidden Pivot Webinar & Tutorials
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Gloomy Picture Perhaps Worse Than It Seems
by Rick Ackerman on May 18, 2009 4:31 am GMT · 9 comments
Gloomy forecasts have generally held sway at the Committee for Monetary Research and Education’s annual spring dinner, but this is the only time we can recall when there were no optimists on the dais bold enough to challenge a consensus now gloomier, probably, than at any time since the 1930s. Jim Grant’s off-the-cuff talk was about as sunny as the evening’s presentations got, and even he was unwilling to allow much more than a ray of hope that everything would somehow turn out all right. Bob Hoye, on the other hand, was » Read the full article